<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 23, 1998
(Date of earliest event reported)
Commission File No. 333-40113
Bombardier Capital Mortgage Securitization Corporation
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(Exact name of registrant as specified in its charter)
Vermont 03-0355080
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(State of Incorporation) (I.R.S. Employer
Identification No.)
1600 Mountain View Drive, Colchester, VT 05446
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Address of principal executive offices (Zip Code)
(802) 654-7200
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Registrant's Telephone Number, including area code
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Page 1 of __
Index to Exhibits is on Page 5
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ITEM 2. Acquisition or Disposition of Assets; General
On January 23, 1998, Bombardier Capital Mortgage Securitization
Corporation issued its Senior/Subordinated Pass-Through Certificates, Series
1998-A, such series representing interests in a pool of fixed rate manufactured
housing sales contracts deposited in the BCMSC Trust 1998-A. Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to them
in the prospectus dated January 16, 1998, as supplemented by the prospectus
supplement dated January 16, 1998 (together, the "Prospectus").
The Class A Certificates consist of the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates
and the Class A-5 Certificates. The Class M Certificates consist of the Class M
Certificates. The Class B Certificates consist of the Class B-1 Certificates and
the Class B-2 Certificates. The Class X Certificates consist of the Class X
Certificates. The Class R Certificates consist of the Class R Certificates.
The Class M Certificates, the Class B Certificates, the Class X
Certificates and the Class R Certificates are subordinated to the rights of the
Class A Certificates to the extent described in the Prospectus. The Class B-1
Certificates are subordinated to the Class A Certificates and the Class M
Certificates to the extent described in the Prospectus.
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ITEM 7. Financial Statements and Exhibits
(c) Exhibits
<TABLE>
<CAPTION>
Item 601(a)
of Regulation S-K
Exhibit No. Description
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<S> <C>
4.1 Series 1998-A Pooling and
Servicing Agreement, dated as
of January 1, 1998, among
Bombardier Capital Mortgage
Securitization Corporation,
as Depositor, Bombardier
Capital Inc., as Servicer and
Harris Trust and Savings
Bank, as Trustee.
4.2 Standard Terms to Pooling and
Servicing Agreement (January
1998 Edition).
99 Form of Underwriting Agreement.
</TABLE>
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BOMBARDIER CAPITAL MORTGAGE
SECURITIZATION CORPORATION
January 23, 1998
By: /s/ James Dolan
------------------------------------
Name: James Dolan
Title: Assistant Treasurer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
4.1 Series 1998-A Pooling and Servicing Agreement,
dated as of January 1, 1998, among Bombardier
Capital Mortgage Securitization Corporation, as
Depositor, Bombardier Capital Inc., as Servicer and
Harris Trust and Savings Bank, as Trustee.
4.2 Standard Terms to Pooling and
Servicing Agreement (January
1998 Edition).
99 Form of Underwriting Agreement.
</TABLE>
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<PAGE> 1
=====================================================================
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
DEPOSITOR,
BOMBARDIER CAPITAL INC.,
SERVICER
AND
HARRIS TRUST AND SAVINGS BANK,
TRUSTEE
-----------
SERIES 1998-A POOLING AND SERVICING AGREEMENT
DATED AS OF JANUARY 1, 1998
-----------
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
=====================================================================
<PAGE> 2
THIS SERIES 1998-A POOLING AND SERVICING AGREEMENT, dated as of January
1, 1998, is made with respect to the formation of BCMSC Securitization Trust
1998-A (the "Trust") among BOMBARDIER CAPITAL MORTGAGE SECURITIZATION
CORPORATION, a Vermont corporation, as depositor (the "Company"), BOMBARDIER
CAPITAL INC., a Massachusetts corporation, as servicer (the "Servicer"), and
Harris Trust and Savings Bank, an Illinois banking corporation, as trustee (the
"Trustee"), under this Agreement and the Standard Terms to Pooling and Servicing
Agreement, January 1998 Edition (the "Standard Terms"), all the provisions of
which are incorporated herein as modified hereby and shall be a part of this
Agreement as if set forth herein in full (this Agreement with the Standard Terms
so incorporated, the "Pooling and Servicing Agreement"). Capitalized terms used
and not otherwise defined herein shall have the respective meanings given them
in the Standard Terms.
PRELIMINARY STATEMENT
The Company has duly authorized the formation of the Trust to issue a
Series of Certificates with an aggregate initial principal amount of
$194,306,447, to be known as the Senior/Subordinated Pass-Through Certificates,
Series 1998-A (the "Certificates"). The Certificates consist of 10 Classes that
in the aggregate evidence the entire beneficial ownership interest in the Trust.
In accordance with Section 10.01 of the Standard Terms, the Trustee
will make elections to treat all of the assets of the Trust as two real estate
mortgage investment conduits (each, a "REMIC" and, individually, the "Pooling
REMIC" and the "Issuing REMIC") for federal income tax purposes. The Pooling
REMIC will consist of the Distribution Account and the Assets listed on the
Asset Schedule attached as Schedule I (as defined below) hereto. The Issuing
REMIC will consist of the eight Subaccounts designated as provided herein. The
"startup day" of each REMIC for purposes of the REMIC Provisions is the Closing
Date.
GRANTING CLAUSES
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
the Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
the Company hereby bargains, sells, conveys, assigns and transfers to the Trust,
in trust and as provided in this Pooling and Servicing Agreement, without
recourse and for the exclusive benefit of the Holders of the Certificates, all
of the Company's right, title and interest in and to, and any and all benefits
accruing to the Company from, (a) the Contracts listed in Schedule I hereto,
together with the related Contract Documents, and all payments thereon and
proceeds of the conversion, voluntary or involuntary, of the foregoing,
including, without limitation, all rights to receive all principal and interest
payments due on the Contracts on and after the Cut-off Date, including such
scheduled payments received by the Company or Seller prior to the Cut-off Date,
and Principal Prepayments, Net Insurance Proceeds, Net Liquidation Proceeds,
Repurchase Prices and
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other unscheduled collections received on the Contracts on and after the Cut-off
Date; (b) the security interests in the Manufactured Homes granted by the
Obligors pursuant to the related Contracts; (c) all funds, other than investment
earnings, relating to the Contracts on deposit in the Certificate Account, the
Reserve Fund or the Distribution Account for the Certificates and all proceeds
thereof, whether in the form of cash, instruments, securities or other
properties; (d) any and all rights, privileges and benefits accruing to the
Company under the Sales Agreement with respect to the Contracts (provided that
the Company shall retain its rights to indemnification from the Seller under
such Sales Agreement, but also hereby conveys its 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 Agreement; and (e) proceeds of all the foregoing (including,
but not by way of limitation, all proceeds of any Standard Hazard Insurance
Policy or FHA Insurance, or any other insurance policy relating to any of the
Contracts, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables that at any time
constitute all or part or are included in the proceeds of any of the foregoing)
to make distributions on the Certificates as specified herein (the items
referred to in clauses (a) through (e) above shall be collectively referred to
herein as the "Trust Estate").
The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform, subject to the Standard Terms, the duties herein or therein required to
the best of its ability to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
SECTION 1. STANDARD TERMS.
The Company, the Servicer and the Trustee acknowledge that the Standard
Terms prescribe certain obligations of the Company, the Servicer and the Trustee
with respect to the Certificates. The Company, the Servicer and the Trustee
agree to observe and perform such prescribed duties, responsibilities and
obligations, and acknowledge that, except to the extent inconsistent with the
provisions of this Pooling and Servicing Agreement, the Standard Terms are and
shall be a part of this Pooling and Servicing Agreement to the same extent as if
set forth herein in full.
SECTION 2. DEFINED TERMS.
With respect to the Certificates and in addition to or in replacement
for the definitions set forth in Section 1.01 of the Standard Terms, the
following definitions shall be assigned to the defined terms set forth below:
"Accelerated Principal Distribution Amount": With respect to any
Distribution Date, the positive difference, if any, between the Target
Overcollateralization Amount and the Current Overcollateralization Amount.
"Accrual Date": The Accrual Date shall be January 1, 1998.
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<PAGE> 4
"Adjusted Certificate Principal Balance": With respect to each Class of
Subordinated Certificates on any date of determination, its Certificate
Principal Balance immediately following the most recently preceding Distribution
Date reduced by all Writedown Amounts allocated to such Class on such
Distribution Date.
"Adjusted Subaccount Principal Balance": With respect to each of the
Corresponding Subaccounts relating to the Subordinated Certificates, on any date
of determination, its Subaccount Principal Balance immediately following the
most recently preceding Distribution Date reduced by all Writedown Amounts
allocated to such Subaccount on such Distribution Date.
"Average Sixty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Sixty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Contracts (including
Contracts in respect of which the related Manufactured Home has been repossessed
but not yet disposed of) as to which a Monthly Payment thereon is delinquent 60
days or more as of the end of the related Collection Period, and the denominator
of which is the Pool Scheduled Principal Balance for such Distribution Date.
"Average Thirty-Day Delinquency Ratio": With respect to any
Distribution Date, the arithmetic average of the Thirty-Day Delinquency Ratios
for such Distribution Date and the two preceding Distribution Dates. The
"Thirty-Day Delinquency Ratio" for a Distribution Date is the percentage derived
from the fraction, the numerator of which is the aggregate Scheduled Principal
Balance (as of the end of the preceding Prepayment Period) of all Contracts
(including Contracts in respect of which the related Manufactured Home has been
repossessed but not yet disposed of) as to which a Monthly Payment thereon is
delinquent 30 days or more as of the end of the related Collection Period, and
the denominator of which is the Pool Scheduled Principal Balance for such
Distribution Date.
"Book-Entry Certificates": The Class A, Class M and Class B-1
Certificates.
"Carryover Interest Distribution Amount": With respect to each Class of
Certificates, except the Class X Certificates and the Residual Certificates, and
each Distribution Date, all amounts that were distributable on such Class as
Interest Distribution Amounts and as Carryover Interest Distribution Amounts on
the previous Distribution Date but not previously distributed, together with
interest accrued on such amount at the Pass-Through Rate in effect for such
Class during the related Interest Accrual Period. With respect to each
Subaccount on each Distribution Date, all amounts that were allocable to such
Subaccount as Priority Interest Distribution Amounts and as Carryover Interest
Distribution Amounts on the previous Distribution Date but not previously
distributed, together with interest accrued on any such amount at the
Pass-Through Rate in effect for the Corresponding Certificates with respect to
such Subaccount during the related Interest Accrual Period.
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<PAGE> 5
"Carryover Non-Priority Interest Distribution Amount": For any
Subaccount, on any Distribution Date, all amounts that were distributable on
such Subaccount as Non-Priority Interest Distribution Amounts on previous
Distribution Dates that remain unpaid.
"Carryover Writedown Interest Distribution Amount": With respect to
each Distribution Date and each related Class of Subordinated Certificates or
Subaccount relating to a Class of Subordinated Certificates, all amounts that
were distributable on such Class or Subaccount as Writedown Interest
Distribution Amounts and Carryover Writedown Interest Distribution Amounts on
the previous Distribution Date but not previously distributed, plus interest
accrued on any such amount during the related Interest Accrual Period at the
then applicable Pass-Through Rate.
"Class A Certificates": The Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates and Class A-5
Certificates.
"Class A Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date and the denominator of
which is the sum of the Class A Certificate Principal Balance, the Class M
Adjusted Certificate Principal Balance, the Class B-1 Adjusted Certificate
Principal Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class A Principal Distribution Amount": For any Distribution Date,
will equal (i) prior to the Cross-over Date, the entire Principal Distribution
Amount, (ii) on any Distribution Date as to which the Principal Distribution
Tests are not met, the entire Principal Distribution Amount, or (iii) on any
other Distribution Date, the Class A Percentage of the Principal Distribution
Amount. For any Distribution Date, if the Class A Principal Distribution Amount
exceeds the Class A Certificate Principal Balance less the Principal
Distribution Shortfall Carryover Amount with respect to such Class and
Distribution Date, then such amounts shall be allocated to the Class M Principal
Distribution Amount.
"Class A Subaccounts": Any or all, as appropriate, of the Class A-1,
Class A-2, Class A-3, Class A-4 or Class A-5 Subaccounts.
"Class B Certificates": The Class B-1 Certificates and Class B-2
Certificates.
"Class B Subaccounts": Either or all, as appropriate, of the Class B-1
or Class B-2 Subaccounts.
"Class B-1 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Adjusted Certificate Principal Balance of the Class
B-1 Certificates immediately prior to such Distribution Date and the denominator
of which is the sum of the Class A Certificate Principal Balance, the Class M
Adjusted
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<PAGE> 6
Certificate Principal Balance, the Class B-1 Adjusted Certificate Principal
Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class B-1 Principal Distribution Amount": For any Distribution Date
will equal (i) as long as the Class A Certificate Principal Balance and the
Class M Certificate Principal Balance have not been reduced to zero and prior to
the Cross-over Date, zero, (ii) on any Distribution Date as to which the
Principal Distribution Tests are not met and the Class A Certificate Principal
Balance and the Class M Certificate Principal Balance have not been reduced to
zero, zero, (iii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance and
the Class M Certificate Principal Balance each have been reduced to zero, the
Principal Distribution Amount, or (iv) on any other Distribution Date, the Class
B-1 Percentage of the Principal Distribution Amount. For any Distribution Date,
if the Class B-1 Principal Distribution Amount exceeds the Class B-1 Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and Distribution Date, then such amounts shall be
allocated to the Class B-2 Principal Distribution Amount.
"Class B-2 Floor Amount": With respect to any Distribution Date, either
(a) 2.96% of the Pool Scheduled Principal Balance as of the Cut-off Date, if the
Class A Certificate Principal Balance, the Class M Certificate Principal Balance
and the Class B-1 Certificate Principal Balance have not been reduced to zero
immediately prior to such Distribution Date, and (b) zero, if the Class A
Certificate Principal Balance, the Class M Certificate Principal Balance and the
Class B-1 Certificate Principal Balance have been reduced to zero immediately
prior to such Distribution Date.
"Class B-2 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class B-2 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M Adjusted
Certificate Principal Balance, the Class B-1 Adjusted Certificate Principal
Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class B-2 Principal Distribution Amount": For any Distribution Date
will equal (i) as long as the Class A Certificate Principal Balance, the Class M
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
have not been reduced to zero and prior to the Crossover Date, zero, (ii) on any
Distribution Date as to which the Principal Distribution Tests are not met and
the Class A Certificate Principal Balance, the Class M Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have not been reduced to
zero, zero, (iii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance,
the Class M Certificate Principal Balance and the Class B-1 Certificate
Principal Balance each have been reduced to zero, the Principal Distribution
Amount, or (iv) on any other Distribution Date, the Class B-2 Percentage of the
Principal Distribution Amount. If the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have not been reduced to zero on or before a Distribution Date, then
amounts otherwise allocable as Class B-2 Principal Distribution Amounts shall be
allocated first to the Class B-1 Principal
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Distribution Amount, next to the Class M Principal Distribution Amount, and
finally to the Class A Principal Distribution Amount, to the extent that
allocation of such amounts to the Class B-2 Principal Distribution Amount would
reduce the Class B-2 Certificate Principal Balance below the Class B-2 Floor
Amount. On any Distribution Date, the Class B-2 Principal Distribution Amount
shall not exceed the Class B-2 Certificate Principal Balance less the Principal
Distribution Shortfall Carryover Amount with respect to such Class and such
Distribution Date.
"Class M Certificates": The Class M Certificates.
"Class M Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class M Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M Adjusted
Certificate Principal Balance, the Class B-1 Adjusted Certificate Principal
Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class M Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance has not been
reduced to zero and prior to the Cross-over Date, zero, (ii) on any Distribution
Date as to which the Principal Distribution Tests are not met and the Class A
Certificate Principal Balance has not been reduced to zero, zero, (iii) on any
Distribution Date as to which the Principal Distribution Tests are not met and
the Class A Certificate Principal Balance has been reduced to zero, the
Principal Distribution Amount, or (iv) on any other Distribution Date, the Class
M Percentage of the Principal Distribution Amount. For any Distribution Date, if
the Class M Principal Distribution Amount exceeds the Class M Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and Distribution Date, then such amounts shall be
allocated to the Class B-1 Principal Distribution Amount.
"Class M Subaccount": The Class M Subaccount.
"Class R Certificates": The Class R Certificates, which comprise both
the Pooling REMIC Residual Interest and the Issuing REMIC Residual Interest.
"Class R-1 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-1 Certificates,
which will represent the Issuing REMIC Residual Interest.
"Class R-2 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-2 Certificates,
which will represent the Pooling REMIC Residual Interest.
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"Class X Carryover Strip Amount": With respect to the Class X
Certificates on each Distribution Date, all amounts that were distributable on
such Class as Class X Strip Amounts on previous Distribution Dates that remain
unpaid.
"Class X Certificates": The Class X Certificates created pursuant to
Section 3 hereof.
"Class X Strip Amount": With respect to any Distribution Date, 30 days'
interest on the Subaccount Principal Balance of the Class A, Class B and Class M
Subaccounts, at a rate equal to the difference, if any, between the Weighted
Average Net Contract Rate and the weighted average of the Pass-Through Rates on
the Class A, Class M and Class B Subaccounts.
"Closing Date": January 23, 1998.
"Corporate Trust Office": The address set forth below under "Trustee".
"Corresponding Certificates": For any Subaccount, the Class of
Certificates bearing the same letter and numerical designation as that borne by
such Subaccount.
"Corresponding Subaccount": For any Class of Certificates, the
Subaccount bearing the same letter and numerical designation as that borne by
such Class.
"Cross-over Date": The later to occur of (a) the Distribution Date
occurring in February 2003 or (b) the first Distribution Date on which the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the aggregate Adjusted Certificate Principal Balance of
the Subordinated Certificates plus the Current Overcollateralization Amount for
such Distribution Date and the denominator of which is the Pool Scheduled
Principal Balance on such Distribution Date as of the first day of the related
Collection Period, equals or exceeds 1.75 times the percentage equivalent of a
fraction (which shall not be greater than 1) the numerator of which is the
initial aggregate Adjusted Certificate Principal Balance of the Subordinated
Certificates and the denominator of which is the Pool Scheduled Principal
Balance as of the Cut-off Date.
"Cumulative Realized Losses": With respect to any Distribution Date,
the aggregate Realized Losses incurred on Liquidated Assets during the period
from the Cut-off Date through the end of the related Prepayment Period.
"Current Overcollateralization Amount": As of any Distribution Date,
the positive difference, if any, between the Scheduled Principal Balance of the
Contracts and the Certificate Principal Balance of all then outstanding Classes
of Certificates.
"Current Realized Loss Ratio": With respect to any Distribution Date,
the annualized percentage derived from the fraction, the numerator of which is
the sum of the aggregate Realized Losses for the three preceding Prepayment
Periods and the denominator of which is the arithmetic
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average of the Pool Scheduled Principal Balances for such Distribution Date and
the preceding two Distribution Dates.
"Cut-off Date": January 1, 1998.
"ERISA Restricted Certificates": The Class M, Class B-1, Class B-2,
Class X and Class R Certificates.
"Institutional Holder": An insurance company whose long-term debt is
rated at least A- by a Rating Agency, or an equivalent rating from any other
nationally recognized statistical rating organization.
"Interest Distribution Amount": On each Distribution Date, an amount
equal to interest accrued at the applicable Pass-Through Rate during the related
Interest Accrual Period on (i) in the case of the Class A Certificates or the
Class A Subaccounts, the Certificate Principal Balance of such Class or the
Subaccount Principal Balance of such Subaccount, respectively, immediately prior
to that Distribution Date and (ii) in the case of the Subordinated Certificates
or the Corresponding Subaccounts, on the Adjusted Certificate Principal Balance
of such Class or the Subaccount Principal Balance of such Subaccount,
respectively, immediately prior to that Distribution Date.
"Issuing REMIC": The Trust REMIC consisting of the Subaccounts.
"Issuing REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Issuing REMIC.
"Non-Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the positive difference, if any, between
(i) the related Interest Distribution Amount for such Subaccount and (ii) the
related Priority Interest Distribution Amount for such Subaccount.
"Offered Subordinated Certificates": The Class M and Class B-1
Certificates.
"Overcollateralization Reduction Amount": For any Distribution Date,
the positive difference, if any, between the Current Overcollateralization
Amount and the Target Overcollateralization Amount.
"Pass-Through Rate": With respect to each Class of Certificates (except
the Class X Certificates and the Residual Certificates) on any Distribution
Date, the per annum rate for such Class set forth in the table in Section 3
hereof. With respect to any Subaccount on any Distribution Date, the then
applicable Weighted Average Net Asset Rate.
"Pooling REMIC": The Trust REMIC consisting of the Contracts and the
Distribution Account.
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"Pooling REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Pooling REMIC.
"Principal Distribution Amount": On any Distribution Date other than
the Distribution Date that is the Termination Date, the sum of the following
amounts: (a) the sum of the principal components of all Monthly Payments
scheduled to be made during the related Collection Period on the related
Contracts that were Outstanding at the start of such Collection Period
(regardless of whether such Monthly Payments were received by the Servicer from
the related Obligors), not including any Monthly Payments due on Liquidated
Assets or repurchased Contracts; (b) the sum of the amounts of all Principal
Prepayments received by the Servicer on the related Contracts during the related
Prepayment Period; (c) with respect to any related Contract that became a
Liquidated Asset during the related Prepayment Period, the Scheduled Principal
Balance thereof on the date of liquidation thereof (determined without giving
effect to such liquidation); (d) with respect to any related Contract that was
purchased or repurchased by the Servicer, the Seller or the Company pursuant to
Section 2.06 of the Standard Terms during the related Prepayment Period, the
Scheduled Principal Balance thereof on the date of purchase or repurchase
thereof (determined without giving effect to such purchase or repurchase) less
(e) the Overcollateralization Reduction Amount.
On the Distribution Date that is the Termination Date, the Principal
Distribution Amount shall be the Pool Scheduled Principal Balance for such
Distribution Date.
"Principal Distribution Shortfall Carryover Amount": With respect to
each Distribution Date and each Class of Certificates, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Certificates. With respect to each Distribution Date and each Corresponding
Subaccount, an amount equal to all Principal Distribution Amounts distributable
on the Corresponding Certificates from previous Distribution Dates that have not
yet been distributed on such Corresponding Certificates.
"Principal Distribution Tests": With respect to each Distribution Date:
(a) the Average Sixty-Day Delinquency Ratio as of such Distribution Date does
not exceed 5.00%; (b) the Average Thirty-Day Delinquency Ratio as of such
Distribution Date does not exceed 7.00%; (c) the Cumulative Realized Losses as
of such Distribution Date do not exceed an amount equal to the percentage set
forth below of the initial aggregate Certificate Principal Balance of all the
Certificates:
<TABLE>
<CAPTION>
Distribution Dates Percentage
------------------ ----------
<S> <C>
February 2003 through January 2004 7.00%
February 2004 through January 2005 8.00%
February 2005 and after 9.00%;
</TABLE>
and (d) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 2.75%.
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"Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the Interest Distribution Amount for the
Corresponding Certificates.
"Private Certificates": The Class B-2 Certificates, Class X
Certificates and Residual Certificates.
"Qualified Bidders": Firms and institutions that are engaged in the
business of buying and selling manufactured housing paper.
"Rating Agency": Each of Fitch IBCA, Inc. (One State Street Plaza, New
York, New York 10004, and Moody's Investors Service, Inc. (99 Church Street, New
York, New York 10004).
"Regular Certificates": The Class A Certificates, Class M Certificates,
Class B Certificates and Class X Certificates.
"Reserve Fund": Shall mean the account established pursuant to Section
11 of this Agreement.
"Reserve Fund Draw Amount": On any Remittance Date, an amount equal to
the lesser of (i) amounts on deposit in the Reserve Fund and (ii) the excess of
(A) the amounts payable on the related Distribution Date pursuant to Section
5(b)(i) through (xvi) hereunder over (B) the amount on deposit in the
Distribution Account after giving effect to all deposits to be made into the
Distribution Account on such Remittance Date, exclusive of any amounts deposited
therein pursuant to Section 11 hereunder.
"Residual Certificates": The Class R Certificates or, following the
division of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 9(b)
hereof, the Class R-1 Certificates and Class R-2 Certificates.
"Responsible Officer": Shall mean when used with respect to the Trustee
any officer within the Corporate Trust Office including any Managing Director,
Vice President, Assistant Vice President, Secretary, Assistant Secretary of
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with the
particular subject.
"Rule 144A Certificates": The Class B-2, Class X and Residual
Certificates.
"Servicing Fee Rate": 1.00% per annum.
"Subaccount": Each of the following nine subaccounts established solely
for purposes of the REMIC Provisions by the Trustee, which have the Pass-Through
Rates and initial Subaccount Principal Balances set forth below:
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<PAGE> 12
<TABLE>
<CAPTION>
INITIAL
PASS-THROUGH SUBACCOUNT
SUBACCOUNT RATE PRINCIPAL BALANCE
---------- ---- -----------------
<S> <C> <C>
A-1 (1) $41,940,000
A-2 (1) $28,750,000
A-3 (1) $26,150,000
A-4 (1) $25,720,000
A-5 (1) $27,055,000
M (1) $16,517,000
B-1 (1) $19,430,000
B-2 (1) $ 8,744,447
</TABLE>
(1) The Pass-Through Rate on each Subaccount for any
Distribution Date shall be equal to the Weighted Average Net Asset
Rate.
The final scheduled Distribution Date for each Subaccount is the April
2028 Distribution Date. For purposes of Treasury Regulation ss.1.860G-l(a)(4),
the latest possible maturity date for each of the Subaccounts shall be the
September 2027 Distribution Date.
"Subaccount Principal Balance": With respect to each Subaccount, on any
date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such Subaccount in the definition of "Subaccount" above,
minus all amounts allocated to such Subaccount in reduction of its Subaccount
Principal Balance pursuant to Sections 5(a) and 6 hereof.
"Subordinated Certificates": The Class M, Class B-1, Class B-2, Class X
and Residual Certificates.
"Target Credit Enhancement Amount": Shall mean (i) for any Distribution
Date prior to the Cross-over Date, 4.25% of the Pool Scheduled Principal Balance
as of the Cut-off Date, and (ii) for any other Distribution Date, the lesser of
(x) 4.25% of the Pool Scheduled Principal Balance as of the Cut-off Date and (y)
7.44% of the Pool Scheduled Principal Balance for the next succeeding
Distribution Date; provided, however, that in no event shall the Target Credit
Enhancement Amount be less than 1.00% of the Pool Scheduled Principal Balance as
of the Cut-off Date; provided further, however, that if a Servicing Fee Event
shall not have occurred and be continuing, the Target Credit Enhancement Amount
shall equal the Target Overcollateralization Amount.
"Target Overcollateralization Amount": Shall mean (i) for any
Distribution Date prior to the Cross-over Date, 2.00% of the Pool Scheduled
Principal Balance as of the Cut-off Date, and (ii) for any other Distribution
Date, the lesser of (x) 2.00% of the Pool Scheduled Principal Balance as of the
Cut-off Date and (y) 3.50% of the Pool Scheduled Principal Balance for the next
succeeding Distribution Date; provided, however, that in no event shall the
Target Overcollateralization Amount be less than 1.00% of the Pool Scheduled
Principal Balance as of the Cut-off Date.
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<PAGE> 13
"Target Reserve Fund Balance" shall mean the excess, if any, of the
Target Credit Enhancement Amount over the Target Overcollateralization Amount.
"Trustee": Harris Trust and Savings Bank, not in its individual
capacity but solely as Trustee under this Pooling and Servicing Agreement, or
any successor trustee appointed as herein provided. Notices to the Trustee shall
be sent to 311 West Monroe, 12th Floor, Chicago, Illinois 60606, Attention:
Indenture Trust Administration, Facsimile No. 312-461-3525 (the "Corporate Trust
Office"), or the address specified by its successor in interest.
"Trust REMIC": Each of the Pooling REMIC and the Issuing REMIC.
"Underwriter": Each of Credit Suisse First Boston Corporation (whose
address is 11 Madison Avenue, New York, New York 10010) and First Chicago
Capital Markets, Inc. (whose address is 1 First National Plaza, Mail Suite 0596,
Chicago, Illinois 60670).
"Weighted Average Net Asset Rate": With respect to any Distribution
Date, the weighted average of the Contract Rates applicable to the Monthly
Payments that were due during the related Collection Period on Contracts that
were Outstanding at the beginning of the related Prepayment Period, less the
Servicing Fee Rate.
"Writedown Amount": With respect to each Distribution Date, the amount,
if any, by which (i) the aggregate Certificate Principal Balance of all the
Certificates, after all distributions have been made on the Certificates on such
Distribution Date pursuant to Section 5(b) hereof, exceeds (ii) the Pool
Scheduled Principal Balance of the Contracts for the next Distribution Date.
"Writedown Interest Distribution Amount": With respect to each
Distribution Date and each Class of Subordinated Certificates, interest accrued
during the related Interest Accrual Period at the applicable Pass-Through Rate
on any related Writedown Amount. With respect to each Distribution Date and each
Corresponding Subaccount, interest accrued during the related Interest Accrual
Period on any related Writedown Amount at the Pass-Through Rate applicable to
the Corresponding Certificates.
SECTION 3. CERTIFICATES.
The aggregate initial principal amount of Certificates that may be
executed and delivered under this Pooling and Servicing Agreement is limited to
$194,306,447, except for Certificates executed and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued
in ten Classes having the designations, initial Certificate Principal Balances,
Pass-Through Rates and Final Scheduled Distribution Dates set forth or described
below:
13
<PAGE> 14
<TABLE>
<CAPTION>
INITIAL FINAL
CERTIFICATE PASS SCHEDULED
PRINCIPAL THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(7)
- ----------- ------- ---- -------
<S> <C> <C> <C>
A-1 $41,940,000 6.19% April 15, 2028
A-2 $28,750,000 6.13% April 15, 2028
A-3 $26,150,000 6.23% April 15, 2028
A-4 $25,720,000 6.65% April 15, 2028
A-5 $27,055,000 (1) April 15, 2028
M $16,517,000 (2) April 15, 2028
B-1 $19,430,000 (3) April 15, 2028
B-2 $ 8,744,447 (4) April 15, 2028
X (5) (5) April 15, 2028
R (6) (6) April 15, 2028
</TABLE>
(1) The Pass-Through Rate on the Class A-5 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.85% per annum or (ii)
the Weighted Average Net Asset Rate.
(2) The Pass-Through Rate on the Class M Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.90% per annum or (ii)
the Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.43% per annum or (ii)
the Weighted Average Net Asset Rate.
(4) The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.70% per annum or (ii)
the Weighted Average Net Asset Rate.
(5) The Class X Certificates shall have no Certificate Principal
Balance and no Pass- Through Rate. The Class X Certificates will represent the
right to receive, on each Distribution Date, the applicable Class X Strip Amount
and any Class X Carryover Strip Amount.
(6) The Class R Certificates shall have no Certificate Principal
Balance and no Pass- Through Rate, and shall represent the residual interest in
both the Pooling REMIC and the Issuing REMIC. Following the division of the
Class R Certificates into two separately transferable, certificated and fully
registered certificates in accordance with Section 9(b) hereof, the Class R-1
and Class R-2 Certificates shall have no Certificate Principal Balances and no
Pass-Through Rates and shall represent the residual interest in the Issuing
REMIC and the Pooling REMIC, respectively.
(7) For purposes of Treasury Regulation ss.1.860G-1(a)(4), the latest
possible maturity date of each Class of Certificates shall be the Final
Scheduled Distribution Date.
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<PAGE> 15
SECTION 4. DENOMINATIONS.
The Book-Entry Certificates will be registered as one or more
certificates in the name of the Clearing Agency or its nominee. Beneficial
interests in the Book-Entry Certificates will be held by the Beneficial Owners
through the book-entry facilities of the Clearing Agency, in minimum
denominations of $1,000 and integral multiples of $1 in excess thereof in the
case of the Class A Certificates and minimum denominations of $25,000 and
integral multiples of $1 in excess thereof in the case of the Class M and Class
B-1 Certificates.
The Class B-2 Certificates, the Class X Certificates and the Residual
Certificates will be issued in certificated, fully registered form. The Class
B-2 Certificates will be issued in minimum denominations of $25,000 and integral
multiples of $1 in excess thereof, except that one Certificate may be issued in
a different denomination that evidences the remainder of the aggregate initial
Certificate Principal Balance of such Class. The Class X Certificates and the
Residual Certificates will be issued in minimum Percentage Interests equal to
10%.
SECTION 5. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate the Available Distribution Amount to the
various Subaccounts, and, where applicable, the Servicer, to the extent of the
amount thereof remaining after application pursuant to clauses (1) through (4)
of Section 4.03 of the Standard Terms, in the following manner and in the
following order of priority all in accordance with related Remittance Report:
(i) First, concurrently, to each Class A Subaccount, (A)
first, its Priority Interest Distribution Amount for such Distribution
Date, with the Available Distribution Amount being allocated among the
Class A Subaccounts pro rata based on their respective Priority
Interest Distribution Amounts, and (B) second, the related Carryover
Interest Distribution Amount for such Distribution Date, if any, in
each case with the Available Distribution Amount being allocated among
the Class A Subaccounts pro rata based on their respective Carryover
Interest Distribution Amounts;
(ii) Second, to the Class M Subaccount, (A) first, the related
Priority Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iii) Third, to the Class B-1 Subaccount, (A) first, the
related Priority Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Interest Distribution
Amount for such Distribution Date;
(iv) Fourth, to the Class B-2 Subaccount, (A) first, the
related Priority Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Interest Distribution
Amount for such Distribution Date;
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<PAGE> 16
(v) Fifth, concurrently, to each Class A Subaccount, the
related Principal Distribution Shortfall Carryover Amount for the Class
A Subaccounts, if any, for such Distribution Date, allocated among the
Class A Subaccounts pro rata based on the Certificate Principal
Balances of their respective Corresponding Certificates;
(vi) Sixth, to the Class A Subaccounts, the Class A Principal
Distribution Amount allocated sequentially to the Class A Certificates
in the order of their numerical designations in reduction of the
Subaccount Principal Balance of such Classes, until the Certificate
Principal Balance of each Class of Corresponding Certificates is
reduced to zero; provided, however, that on any Distribution Date on
which the Pool Scheduled Principal Balance is less than the aggregate
Certificate Principal Balance of the Class A Certificates immediately
prior to such Distribution Date, the Class A Principal Distribution
Amount will be allocated among the Class A Subaccounts pro rata based
upon the Certificate Principal Balances of their respective
Corresponding Certificates;
(vii) Seventh, to the Class M Subaccount, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such Distribution Date;
(viii) Eighth, to the Class M Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class M
Subaccount, if any, for such Distribution Date;
(ix) Ninth, to the Class M Subaccount, the Class M Principal
Distribution Amount, in reduction of the Subaccount Principal Balance
of such Class, until it is reduced to zero;
(x) Tenth, to the Class B-1 Subaccount, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Writedown Interest Distribution
Amount for such Distribution Date;
(xi) Eleventh, to the Class B-1 Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class B-1
Subaccount, if any, for such Distribution Date;
(xii) Twelfth, to the Class B-1 Subaccount, the Class B-1
Principal Distribution Amount, in reduction of the Subaccount Principal
Balance of such Class, until it is reduced to zero;
(xiii) Thirteenth, to the Class B-2 Subaccount, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such Distribution Date;
(xiv) Fourteenth, to the Class B-2 Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class B-2
Subaccount, if any, for such Distribution Date;
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<PAGE> 17
(xv) Fifteenth, to the Class B-2 Subaccount, the Class B-2
Principal Distribution Amount, in reduction of the Subaccount Principal
Balance of such Class, until it is reduced to zero;
(xvi) Sixteenth, if Bombardier Capital Inc. is the Servicer
and a Servicing Fee Event has not occurred and is continuing, to the
Servicer in the following sequential order: (A) the Servicing Fee with
respect to such Distribution Date; and (B) any Servicing Fees from
previous Distribution Dates remaining unpaid;
(xvii) Seventeenth, to each Subaccount, (i) first, its
Carryover Non-Priority Interest Distribution Amount for such
Distribution Date, (ii) second, its Non-Priority Interest Distribution
Amount for such Distribution Date, and (iii) its remaining Subaccount
Principal Balance in each case with the Available Distribution Amount
being allocated among the Subaccounts pro rata based upon the total
amount remaining to be paid with respect to each Subaccount under each
clause of this provision; and
(xviii) Finally, any remainder to Holders of the Pooling REMIC
Residual Interest.
(b) On each Distribution Date, after all Subaccount allocations have
been made as described in Section 5(a) above, the Trustee (or the Paying Agent
on behalf of the Trustee) shall withdraw all amounts allocated to the various
Subaccounts, and shall distribute such amounts in the following manner and in
the following order of priority all in accordance with the related Remittance
Report:
(i) First, concurrently, to each Class of Class A
Certificates, (A) first, its Interest Distribution Amount for such
Distribution Date, with the Available Distribution Amount being
allocated among such Classes pro rata based on their respective
Interest Distribution Amounts, and (B) second, the related Carryover
Interest Distribution Amount, if any, for such Distribution Date, in
each case with the Available Distribution Amount being allocated among
the Classes of Class A Certificates pro rata based on their respective
Carryover Interest Distribution Amounts;
(ii) Second, to the Class M Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iii) Third, to the Class B-1 Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iv) Fourth, to the Class B-2 Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date and (B)
second, any related Carryover Interest Distribution Amount for such
Distribution Date;
17
<PAGE> 18
(v) Fifth, concurrently, to each Class of Class A
Certificates, the related Principal Distribution Shortfall Carryover
Amount for the Class A Certificates, if any, for such Distribution
Date, allocated among the Class A Certificates pro rata based on their
respective Certificate Principal Balances;
(vi) Sixth, to the Class A Certificates, the Class A Principal
Distribution Amount allocated sequentially to the Class A Certificates
in the order of their numerical designations, in reduction of the
Certificate Principal Balance of such Classes, until reduced to zero;
provided, however, that on any Distribution Date on which the Pool
Scheduled Principal Balance is less than the aggregate Certificate
Principal Balance of the Class A Certificates, immediately prior to
such Distribution Date, the Class A Principal Distribution Amount will
be allocated among the Class A Certificates pro rata based upon their
respective Certificate Principal Balances;
(vii) Seventh, to the Class M Certificates, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such Distribution Date;
(viii) Eighth, to the Class M Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class M
Certificates, if any, for such Distribution Date;
(ix) Ninth, to the Class M Certificates, the Class M Principal
Distribution Amount, in reduction of the Certificate Principal Balance
of such Class, until it is reduced to zero;
(x) Tenth, to the Class B-1 Certificates, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such Distribution Date;
(xi) Eleventh, to the Class B-1 Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class B-1
Certificates, if any, for such Distribution Date;
(xii) Twelfth, to the Class B-1 Certificates, the Class B-l
Principal Distribution Amount, in reduction of the Certificate
Principal Balance of such Class, until it is reduced to zero;
(xiii) Thirteenth, to the Class B-2 Certificates, (A) first,
any related Writedown Interest Distribution Amount for such
Distribution Date, and (B) second, any related Carryover Writedown
Interest Distribution Amount for such Distribution Date;
(xiv) Fourteenth, to the Class B-2 Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class B-2
Certificates, if any, for such Distribution Date;
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<PAGE> 19
(xv) Fifteenth, to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount, in reduction of the Certificate
Principal Balance of such Class, until it is reduced to zero;
(xvi) Sixteenth, to each Class of the Class A Certificates
sequentially in the order of their numerical designations, the
Accelerated Principal Distribution Amount for such Distribution Date,
in reduction of the Certificate Principal Balance of such Classes,
until reduced to zero;
(xvii) Seventeenth, to the Reserve Fund, the excess, if any,
of the Target Reserve Fund Balance for such Distribution Date over the
amount on deposit in the Reserve Fund on such Distribution Date;
(xviii) Eighteenth, to the Class X Certificates in the
following sequential order:
(A) the current Class X Strip Amount; and
(B) any Class X Carryover Strip Amount; and
(xix) Finally, any remainder to the holders of the Issuing
REMIC Residual Interest.
(c) All distributions or allocations made with respect to each Class on
each Distribution Date shall be allocated pro rata among the outstanding
Certificates of such Class based on their respective Percentage Interests. So
long as the Book-Entry Certificates are registered in the name of a Clearing
Agency or its nominee, the Trustee shall make all distributions or allocations
on such Certificates by wire transfers of immediately available funds to the
Clearing Agency or its nominee. In the case of Certificates issued in
fully-registered, certificated form, payment shall be made either (i) by check
mailed to the address of each Certificateholder as it appears in the Certificate
Register on the Record Date immediately prior to such Distribution Date or (ii)
by wire transfer of immediately available funds to the account of a Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and such Holder
is (A) with respect to any Class A or Class B Certificates issued after the
Closing Date in certificated, fully-registered form, the registered owner of
Class A or Class B Certificates with an aggregate initial Certificate Principal
Balance of at least $1,000,000, and (B) with respect to the Residual
Certificates or Class X Certificates, the registered owner of the Residual
Certificates or Class X Certificates evidencing an aggregate Percentage Interest
of at least 50%. The Trustee may charge any Holder its standard wire transfer
fee for any payment made by wire transfer. Final distribution on the
Certificates will be made only upon surrender of the Certificates at the offices
of the Trustee set forth in the notice of such final distribution sent by the
Trustee to all Certificateholders pursuant to Section 9.01 of the Standard
Terms.
19
<PAGE> 20
(d) (1) Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.
(2) Any amounts remaining in the Subaccounts on any
Distribution Date after all distributions required to be made by this Pooling
and Servicing Agreement have been made, and any amounts remaining in the Issuing
REMIC after payment in full of the Regular Interests therein and any
administrative expenses associated with the Trust, will be distributed to the
Holders of the Issuing REMIC Residual Interest.
SECTION 6. ALLOCATION OF WRITEDOWN AMOUNTS.
On each Distribution Date, after all required distributions have been
made on the Certificates pursuant to Section 5 above, the Writedown Amount, if
any, shall be allocated on such Distribution Date by the Trustee in the
following manner and in the following order of priority all in accordance with
the related Remittance Report:
(a) First, to the Class B-2 Subaccount, to be applied in
reduction of the Adjusted Subaccount Principal Balance of such
Subaccount, until the Adjusted Subaccount Principal Balance has been
reduced to zero;
(b) Second, to the Class B-1 Subaccount, to be applied in
reduction of the Adjusted Subaccount Principal Balance of such
Subaccount, until the Adjusted Subaccount Principal Balance has been
reduced to zero; and
(c) Finally, to the Class M Subaccount, to be applied in
reduction of the Adjusted Subaccount Principal Balance of such
Subaccount, until the Adjusted Subaccount Principal Balance has been
reduced to zero.
Writedown Amounts allocated to the Class B-2, Class B-1 and Class M
Subaccounts pursuant to this Section 6 shall be allocated to the Class B-2,
Class B-1 and Class M Certificates, respectively, until the Adjusted Certificate
Principal Balance of each such Class has been reduced to zero.
SECTION 7. REMITTANCE REPORTS.
(a) The Remittance Report for each Distribution Date shall identify the
following items, in addition to the items specified in Section 4.01 of the
Standard Terms:
(1) the Interest Distribution Amount for each Class of the
Certificates for such Distribution Date (which shall equal the Priority
Interest Distribution Amount for the Corresponding Subaccount) and the
Carryover Interest Distribution Amount, as well as any
20
<PAGE> 21
Writedown Interest Distribution Amount and any Carryover Writedown
Interest Distribution Amount, for each Class of the Certificates for
such Distribution Date, and the amount of interest of each such
category to be distributed on each such Class based upon the Available
Distribution Amount for such Distribution Date;
(2) the amount to be distributed on such Distribution Date on
each Class of the Certificates to be applied to reduce the Certificate
Principal Balance of such Class (which will be equal to the amount to
be allocated on such Distribution Date on the Corresponding Subaccount
to be applied to reduce the Subaccount Principal Balance of such
Subaccount), separately identifying any portion of such amount
attributable to any prepayments, the amount to be distributed to reduce
the Principal Distribution Shortfall Carryover Amount on each such
Class based upon the Available Distribution Amount for such
Distribution Date and separately identifying any Accelerated Principal
Distribution Amount to be distributed on the Class A Certificates or
any Overcollateralization Reduction Amount;
(3) the aggregate amount, if any, to be distributed on the
Residual Certificates;
(4) the amount of any Writedown Amounts to be allocated to
reduce the Certificate Principal Balance of any Class of Subordinated
Certificates (which will be equal to the amount of any Writedown Amount
to be allocated to the Corresponding Subaccount) on such Distribution
Date;
(5) the Certificate Principal Balance of each Class of the
Certificates (which will be equal to the Subaccount Principal Balance
of the Corresponding Subaccount) and the Adjusted Certificate Principal
Balance of each Class of the Subordinated Certificates (which will be
equal to the Adjusted Subaccount Principal Balance of the Corresponding
Subaccount) after giving effect to the distributions to be made (and
any Writedown Amounts to be allocated) on such Distribution Date;
(6) the aggregate Interest Distribution Amount remaining
unpaid, if any, and the aggregate Carryover Interest Distribution
Amount remaining unpaid, if any, for each Class of Certificates (which
will be equal to the Priority Interest Distribution Amount and
Carryover Interest Distribution Amount remaining unpaid on the
Corresponding Subaccount), after giving effect to all distributions to
be made on such Distribution Date;
(7) the aggregate Writedown Interest Distribution Amount
remaining unpaid, if any, and the aggregate Carryover Writedown
Interest Distribution Amount remaining unpaid, if any, for each Class
of Certificates (which will be equal to such amounts remaining unpaid
on the Corresponding Subaccount), after giving effect to all
distributions to be made on such Distribution Date; and
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<PAGE> 22
(8) the aggregate Principal Distribution Shortfall Carryover
Amount remaining unpaid, if any, for each Class of Certificates, after
giving effect to the distributions to be made on such Distribution
Date.
In the case of information furnished pursuant to clauses (1), (2) and
(3) above, the amounts shall be expressed, with respect to any Class A, Class M
or Class B Certificate, as a dollar amount per $1,000 denomination.
(b) In addition to mailing a copy of the related Remittance Report to
each Certificateholder on each Distribution Date in accordance with Section 4.01
of the Standard Terms, on each Distribution Date, the Trustee shall mail a copy
of the related Remittance Report to each Underwriter (to the attention of the
person, if any, reported to the Trustee by the applicable Underwriter), to the
Seller and to The Bloomberg (to the address and to the person, if any, specified
to the Trustee by Credit Suisse First Boston Corporation). The Trustee shall not
be obligated to mail any Remittance Report to The Bloomberg unless and until
Credit Suisse First Boston Corporation shall have notified the Trustee in
writing of the name and address to which such reports are to be mailed, which
notice, once delivered, will be effective for all Distribution Dates after the
date such notice is received by the Trustee unless and until superseded by a
subsequent notice.
SECTION 8. LIMITED RIGHT OF SERVICER TO RETAIN SERVICING FEES FROM COLLECTIONS.
The Servicer may retain its Servicing Fee and any other servicing
compensation provided for herein and in the Standard Terms from gross interest
collections on the Assets prior to depositing such collections into the
Certificate Account; provided, however, that Bombardier Capital Inc. as Servicer
may only so retain its Servicing Fee if a Servicing Fee Event has not occurred
and is continuing in respect of a Distribution Date from gross interest
collections on the Assets to the extent that 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 allocated and
distributed on such Distribution Date pursuant to clauses (i) through (xvi)
under Section 5(b) hereof. On the Closing Date, a Servicing Fee Event shall be
deemed to have occurred and be continuing.
SECTION 9. REMIC ADMINISTRATION.
(a) For purposes of the REMIC Provisions, all of the Certificates
(except the Residual Certificates) will be designated as the "regular interests"
in the Issuing REMIC, the nine Subaccounts will be designated as the "regular
interests" in the Pooling REMIC, the Class R Certificates will be designated as
the "residual interest" in each of the Issuing REMIC and the Pooling REMIC and,
following the division of the Class R Certificates into two separately
transferable, certificated and fully registered certificates in accordance with
Section 9(b) below, the Class R-1 Certificates will be designated as the
"residual interest" in the Issuing REMIC and the Class R-2 Certificates will be
designated as the "residual interest" in the Pooling REMIC.
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<PAGE> 23
(b) Upon the request of any registered Holder of a Class R Certificate,
the Trustee on behalf of the Trust shall issue to such Holder two separately
transferable, certificated and fully registered Certificates (a Class R-1
Certificate and a Class R-2 Certificate), in substantially the forms of Exhibit
R-1 and Exhibit R-2 attached hereto. In the event that the Class R Certificates
are exchanged for separately transferrable Class R-1 and Class R-2 Certificates:
(1) the Class R-1 Certificates will be designated as the residual interest in
the Issuing REMIC, (2) the Class R-2 Certificates will be designated as the
residual interest in the Pooling REMIC, (3) the Holders of a majority of the
Percentage Interest in the Class R-1 Certificates together with the Holders of a
majority of the Percentage Interest in the Class R-2 Certificates will have the
option to make a Terminating Purchase given to the Holders of a majority of the
Percentage Interest in the Residual Certificates pursuant to Section 9.01 of the
Standard Terms, and (4) the restrictions on the transfer of a Residual
Certificate provided in the Standard Terms will apply to both the Class R-1 and
the Class R-2 Certificates.
SECTION 10. AUCTION CALL.
(a) If neither the Servicer nor the Residual Majority exercises its
optional termination right as described in Section 9.01 of the Standard Terms
within 90 days after it first becomes entitled to do so, the Trustee shall use
commercially reasonable efforts to solicit bids for the purchase of all Assets,
REO Properties and Repo Properties remaining in the Trust from no fewer than two
prospective purchasers that it believes to be Qualified Bidders.
(b) If the Trustee receives bids from at least two Qualified Bidders
and the net proceeds of the highest bid are equal to or greater than the
Termination Price, the Trustee shall promptly advise the Servicer of the highest
bid and the terms of purchase, and the Servicer shall have three Business Days,
at its option, to match the terms of such bid. The Trustee shall thereafter sell
or cause the sale of the Assets, REO Properties and Repo Properties either (i)
to the Servicer, if it shall so elect, or (ii) to the highest bidder, and in
either case the Trustee shall distribute the net proceeds of such sale in
redemption of the Certificates in compliance with Article IX of the Standard
Terms and Section 5 hereof. Any such sale must also comply with the requirements
applicable to a Terminating Purchase set forth in Section 9.02 of the Standard
Terms.
(c) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by Section
9.02 of the Standard Terms) shall be deducted from the bid price of the Assets,
REO Properties and Repo Properties in determining the net proceeds therefrom.
(d) If the Trustee does not obtain bids from at least two Qualified
Bidders, or does not receive a bid such that the net proceeds therefrom would at
least equal the Termination Price, it shall not sell the Assets, REO Properties
and Repo Properties, and shall thereafter have no obligation to attempt to sell
same.
23
<PAGE> 24
(e) The Servicer shall cooperate with and provide necessary information
to the Trustee in connection with any auction sale as described herein.
(f) The Trustee shall have no liability in respect of any bids it
receives and such amounts shall be conclusive and binding upon the parties
hereto and the Certificateholders.
SECTION 11. RESERVE FUND.
(a) The Trustee shall establish and maintain or cause to be established
and maintained a Reserve Fund which is an Eligible Account, in the form of a
non-interest-bearing trust account, titled "Reserve Fund for Harris Bank and
Trust Company, as trustee for the benefit of the holders of Bombardier Capital
Mortgage Securitization Corporation, Series 1998-A." Amounts shall be withdrawn
from the Reserve Fund in accordance with this Section 11. Any additional
deposits to or withdrawals from the Reserve Fund pursuant to Sections 11(b) or
11(c) shall be made or shall be caused to be made by the Trustee only upon
receipt by the Trustee of written directions from the Servicer directing such
deposits or withdrawals and specifying the reason therefor.
(b) If on any Remittance Date on which the Reserve Fund Draw Amount is
more than zero, the Trustee shall withdraw or cause to be withdrawn from the
Reserve Fund, and deposit or cause to be deposited, in the Distribution Account
an amount equal to the Reserve Fund Draw Amount. If on any Distribution Date,
after giving effect to all distributions to be made on such date, the amount on
deposit in the Reserve Fund exceeds the Target Reserve Fund Balance, the excess
of the amount on deposit in the Reserve Fund over the Target Reserve Fund
Balance shall be withdrawn from the Reserve Fund and paid to the Class R
Certificateholder.
(c) On each Distribution Date the Trustee shall make deposits, if any,
into the Reserve Account in the amount specified, and in accordance with,
Section 5(a)(xvii).
(d) Amounts on deposit in the Reserve Account may be invested at the
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 deposited in the Reserve Account by the Servicer out of its own funds
immediately upon realization of any such losses.
(e) The Reserve Fund shall not be considered to be within the Pooling
REMIC or the Issuing REMIC.
SECTION 12. VOTING RIGHTS.
24
<PAGE> 25
The Voting Rights applicable to the Certificates shall be allocated
0.5% to the Class R Certificates, 0.5% to the Class X Certificates and 99% to
the other Certificates in proportion with their respective Certificate Principal
Balance.
SECTION 13. GOVERNING LAW.
The Pooling and Servicing Agreement shall be construed in accordance
with and governed by the laws of the State of New York applicable to agreements
made and to be performed therein. The parties hereto agree to submit to the
personal jurisdiction of all federal and state courts sitting in the State of
New York and hereby irrevocably waive any objection to such jurisdiction. In
addition, the parties hereto hereby irrevocably waive any objection that they
may have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement in any federal or state court sitting in the State
of New York, and further irrevocably waive any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
SECTION 14. FORMS OF CERTIFICATES.
Each of the Schedules and Exhibits attached hereto or referenced herein
are incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.
SECTION 15. COUNTERPARTS.
The Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, and
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 16. ENTIRE AGREEMENT.
The Pooling and Servicing Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.
25
<PAGE> 26
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers thereunto duly authorized and their respective signatures
duly attested all as of the day and year first above written.
BOMBARDIER CAPITAL MORTGAGE
SECURITIZATION CORPORATION
By: /s/ Blaine Filthaut
----------------------------------------
Name: Blaine Filthaut
Title: Vice President and Treasurer
By: /s/ James Dolan
----------------------------------------
Name: James Dolan
Title: Assistant Treasurer
BOMBARDIER CAPITAL INC.
By: /s/ Blaine Filthaut
----------------------------------------
Name: Blaine Filthaut
Title: Vice President and Treasurer
By: /s/ James Dolan
----------------------------------------
Name: James Dolan
Title: Assistant Treasurer
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
By: /s/ Patricia Kelly Acker
----------------------------------------
Name: Patricia Kelly Acker
Title: Vice President
26
<PAGE> 27
INDEX TO EXHIBITS AND SCHEDULES
Exhibit A Form of Class A Certificate
Exhibit B Form of Class M Certificate
Exhibit C Form of Class B Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Class R Certificate
Exhibit R-1 Form of Class R-1 Certificate
Exhibit R-2 Form of Class R-2 Certificate
Schedule I Asset Schedule
<PAGE> 28
Exhibit A
Form of Class A Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS A-1 PASS-THROUGH CERTIFICATE
THIS CLASS A-1 CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST UNDER
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, FOR FEDERAL INCOME TAX
PURPOSES.
THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO
TIME WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET
FORTH BELOW, AND MAY BE ZERO. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE.
PASS-THROUGH RATE: 6.19% CERTIFICATE PRINCIPAL BALANCE OF
THE CLASS A-1 CERTIFICATES AS OF
DENOMINATION: $41,940,000 THE CLOSING DATE: $41,940,000
DATE OF POOLING AND SERVICER: BOMBARDIER CAPITAL
SERVICING AGREEMENT: INC.
AS OF January 1, 1998
CLOSING DATE: January 23, 1998
FIRST DISTRIBUTION DATE: TRUSTEE: HARRIS TRUST AND
February 17, 1998 SAVINGS BANK
NO. 1 CUSIP NO.: 09774X AA0
<PAGE> 29
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS A-1 PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured housing
(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: CEDE & CO.
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class A-1 Certificates issued by BCMSC Trust 1998-A (the "Trust") , which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation, (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer," which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement"). The Trust consists Primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
Distributions of principal of and interest on this Certificate
(including the final distribution on this certificate) will be made out of the
Available Distribution Amount, to the extent and subject to the limitations set
forth in the Pooling and Servicing Agreement, on the 15th day of each month
commencing in February 1998 or, if such 15th day
<PAGE> 30
is not a Business Day, the Business Day immediately following (a "Distribution
Date"), to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month immediately preceding the
month of such distribution (the related "Record Date"). All sums distributed on
this Certificate are payable in the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
The Pass-Through Rate on the Class A-1 Certificates for any
Distribution Date will be equal to 6.19% per annum. Principal and interest will
be distributed on this Certificate on any Distribution Date in the manner
specified in the Pooling and Servicing Agreement. Distributions allocated to the
Class A-1 Certificates will be allocated among the Certificates of such Class
pro rata based upon their respective Percentage Interests, with a final
distribution to be made upon retirement of this Certificate as set forth in the
Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein called the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof equal to the quotient, expressed as a
percentage, obtained by dividing the denomination of this Certificate specified
on the face hereof by the initial aggregate Certificate Principal Balance of the
Class A-1 Certificates. The Certificates are issued in ten classes as
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
Certain Realized Losses on and certain other shortfalls in respect of
the Assets will be allocated on any Distribution Date to Holders of Subordinated
Certificates by allocation to the related Certificates of a Writedown Amount in
the manner set forth in the Pooling and Servicing Agreement. Writedown Amounts
will be allocated on each Distribution Date first to the Class B-2 Certificates,
next to the Class B-1 Certificates, and finally to the Class M Certificates, in
each case to reduce the Adjusted Certificate Principal Balance of such Class
until it has been reduced to zero. All Writedown Amounts allocated to any Class
of Certificates will be allocated pro rata among the outstanding Certificates of
such Class in proportion with their respective Percentage Interests.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time
<PAGE> 31
for purposes other than distributions to Holders, such purposes including
reimbursement of Advances made by the Servicer, or certain expenses incurred,
with respect to the Assets and administration of the Trust.
So long as this Certificate is registered in the name of a Clearing
Agency or its nominee, the Trustee will make payments of principal and interest
on this Certificate by wire transfers of immediately available funds to the
Clearing Agency or its nominee. Otherwise, all distributions made on any
Certificate pursuant to the Pooling and Servicing Agreement will be made by or
on behalf of the Trustee on each Distribution Date to the Holder of such
Certificate as of the related Record Date (i) by check mailed to such Holder at
its address reflected in the Certificate Register as of the related Record Date
or (ii) if such Holder is the Holder of Certificates of this Class with
aggregate initial denominations of at least $1,000,000, by wire transfer of
immediately available funds to the account of such Holder, upon receipt by the
Trustee of a written request of such Holder accompanied by the appropriate
wiring instructions at or before the Closing Date or, in the case of any wire
instructions delivered after the Closing Date, at least five Business Days prior
to the related Record Date. A fee may be charged by the Trustee to a Holder of
Certificates for any distribution made to such Holder by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in the final distribution notice to Certificateholders.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to any
limitations on transfer of this Certificate by a Clearing Agency or its nominee
and certain limitations set forth in the Pooling and
<PAGE> 32
Servicing Agreement, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the principal Corporate Trust Office of the Trustee or such other
offices or agencies appointed by the Trustee for that purpose or such other
locations, if any, provided in the Pooling and Servicing Agreement, duly
endorsed by, or accompanied by an assignment in the form attached hereto or
other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations will be issued to the designated
transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the
Certificates of this Class will be registered as one or more certificates held
by a Clearing Agency or its nominee and beneficial interests will be held by
Beneficial Owners through the book-entry facilities of such Clearing Agency or
its nominee in minimum denominations of $1,000 and integral multiples of $1 in
excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner thereof for all purposes, and neither the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the
<PAGE> 33
Certificates is less than 10% of the sum of the original Certificate Principal
Balances of the Certificates, or (ii) the Servicer may, at its option, make a
Terminating Purchase or cause a Terminating Purchase to be made if the Servicer
determines, based upon an Opinion of Counsel, that the REMIC status of either
REMIC has been lost or that a substantial risk exists that such REMIC status
will be lost for the then-current taxable year. After a Terminating Purchase,
the Termination Price shall be applied to pay previously unreimbursed Advances
and administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by Harris
Trust and Savings Bank, but are made and intended for the purposes of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Harris Trust and Savings Bank, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the holder hereto and by any person
claiming by, through or under such holder, and (d) under no circumstances shall
Harris Trust and Savings Bank be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Certificate.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1998-A.
Dated: January 23, 1998 BCMSC TRUST 1998-A
<PAGE> 34
BY: HARRIS TRUST AND SAVINGS BANK, NOT
IN ITS INDIVIDUAL CAPACITY, BUT SOLELY
AS TRUSTEE
BY: __________________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A-1 CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________________
AUTHORIZED OFFICER
<PAGE> 35
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of assignee)
the within Certificate and does hereby irrevocably constitute and appoint
_____________________________________________________________________ (Attorney)
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated: ___________ _____ ______________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or enlargement
or any change whatever.
______________________________________
SIGNATURE GUARANTEED: The signature must
be guaranteed by a commercial bank or
trust company or by a member firm of the
New York Stock Exchange or another
national securities exchange. Notarized
or witnessed signatures are not
acceptable.
<PAGE> 36
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds, to _______________________________________
____________________________________________________, for the account of
________________________________________, account number _____________, or, if
mailed by check, to ________________________________________. Applicable reports
and statements should be mailed to _______________________. This information is
provided by ____________________________________, the assignee named above, or
__________________________________________________, as its agent.
<PAGE> 37
Exhibit B
Form of Class M Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BECAUSE THE CLASS M CERTIFICATES ARE SUBORDINATED SECURITIES, THEY WILL NOT
SATISFY THE REQUIREMENTS OF CERTAIN PROHIBITED TRANSACTION EXEMPTIONS. AS A
RESULT, THE PURCHASE OR HOLDING OF ANY OF THE CLASS M CERTIFICATES BY A PLAN
INVESTOR MAY CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION OR RESULT IN THE
IMPOSITION OF EXCISE TAXES OR CIVIL PENALTIES. ACCORDINGLY, NONE OF THE CLASS M
CERTIFICATES ARE OFFERED FOR SALE, AND ARE NOT TRANSFERABLE, TO PLAN INVESTORS,
AND EACH PURCHASER OF A CLASS M CERTIFICATE, BY VIRTUE OF ITS PURCHASE OF SUCH
CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT A PLAN INVESTOR.
THE CLASS M CERTIFICATES ARE SUBORDINATED TO THE CLASS A-1, CLASS A-2, CLASS
A-3, CLASS A-4 AND CLASS A-5 CERTIFICATES ISSUED BY THE TRUST DESCRIBED HEREIN
TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS M PASS-THROUGH CERTIFICATE
THIS CLASS M CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST UNDER
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, FOR FEDERAL INCOME TAX
PURPOSES.
THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO
TIME WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET
FORTH BELOW, AND MAY BE ZERO. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE.
<PAGE> 38
PASS-THROUGH RATE: CALCULATED AS CERTIFICATE PRINCIPAL BALANCE OF THE
DESCRIBED HEREIN CLASS M CERTIFICATES AS OF THE
CLOSING DATE: $16,517,000
DENOMINATION: $16,517,000 SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND SERVICING TRUSTEE: HARRIS TRUST AND SAVINGS
AGREEMENT: AS OF JANUARY 1, 1998 BANK
CLOSING DATE: January 23, 1998
FIRST DISTRIBUTION DATE:
FEBRUARY 17, 1998
NO. 1 CUSIP NO.: 09774X AF9
<PAGE> 39
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS M PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured housing
(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: CEDE & CO.
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class M Certificates issued by BCMSC Trust 1998-A (the "Trust"), which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer", which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement"). The Trust consists primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
Distributions of principal of and interest on this Certificate
(including the final distribution on this Certificate) will be made out of the
Available Distribution Amount, to the extent and subject to the limitations set
forth in the Pooling and Servicing Agreement, on the 15th day of each month
commencing in February 1998 or, if such 15th day is not
<PAGE> 40
a Business Day, the Business Day immediately following (a "Distribution Date"),
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month immediately preceding the month
of such distribution (the related "Record Date"). All sums distributed on this
Certificate are payable in the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
The Pass-Through Rate on the Class M Certificates for any Distribution
Date will be equal to the lesser of 6.90% per annum or the Weighted Average Net
Asset Rate. Principal and interest will be distributed on this Certificate on
any Distribution Date in the manner specified in the Pooling and Servicing
Agreement. Distributions allocated to the Class M Certificates will be allocated
among the Certificates of such Class pro rata based upon their respective
Percentage Interests, with a final distribution to be made upon retirement of
this Certificate as set forth in the Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein called the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof equal to the quotient, expressed as a
percentage, obtained by dividing the denomination of this Certificate specified
on the face hereof by the initial aggregate Certificate Principal Balance of the
Class M Certificates. The Certificates are issued in ten classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
The Class M Certificates will be subordinated to the Class A-l, Class
A-2, Class A-3, Class A-4 and Class A-5 Certificates, and the Class B-1, Class
B-2, Class X and Class R Certificates will be subordinated to the Class M
Certificates, in each case to the extent provided in the Pooling and Servicing
Agreement.
Certain Realized Losses on and certain other shortfalls in respect of
the Assets will be allocated on any Distribution Date to Holders of Subordinated
Certificates by allocation to the related Certificates of a Writedown Amount in
the manner set forth in the Pooling and Servicing Agreement. Writedown Amounts
will be allocated on each Distribution Date first to the Class B-2 Certificates,
next to the Class B-1 Certificates, and finally to the Class M Certificates, in
each case to reduce the Adjusted Certificate Principal Balance of such Class
until it has been reduced to zero. All Writedown Amounts allocated to any Class
of Certificates will be allocated pro rata among the outstanding
<PAGE> 41
Certificates of such Class in proportion with their respective Percentage
Interests.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time for purposes other than distributions to Holders, such
purposes including reimbursement of Advances made by the Servicer, or certain
expenses incurred, with respect to the Assets and administration of the Trust.
So long as this Certificate is registered in the name of a Clearing
Agency or its nominee, the Trustee will make payments of principal and interest
on this Certificate by wire transfers of immediately available funds to the
Clearing Agency or its nominee. Otherwise, all distributions made on any
Certificate pursuant to the Pooling and Servicing Agreement will be made by or
on behalf of the Trustee on each Distribution Date to the Holder of such
Certificate as of the related Record Date (i) by check mailed to Such Holder at
its address reflected in the Certificate Register as of the related Record Date
or (ii) if such Holder is the Holder of Certificates of this Class with
aggregate initial denominations of at least $1,000,000, by wire transfer of
immediately available funds to the account of such Holder, upon receipt by the
Trustee of a written request of such Holder accompanied by the appropriate
wiring instructions at or before the Closing Date or, in the case of any wire
instructions delivered after the Closing Date, at least five Business Days prior
to the related Record Date. A fee may be charged by the Trustee to a Holder of
Certificates for any distribution made to such Holder by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in the final distribution notice to Certificateholders.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu
<PAGE> 42
herefor, regardless of whether notation of such consent is made upon this
Certificate. The Pooling and Servicing Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to any
limitations on transfer of this Certificate by a Clearing Agency or its nominee
and certain limitations set forth in the Pooling and Servicing Agreement and
below, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
principal Corporate Trust Office of the Trustee or such other offices or
agencies appointed by the Trustee for that purpose or such other locations, if
any, provided in the Pooling and Servicing Agreement, duly endorsed by, or
accompanied by an assignment in the form attached hereto or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations will be issued to the designated transferee or
transferees.
No transfer of all or any portion of the Class M Certificates may be
made to a proposed transferee that is a Plan Investor. Each Beneficial Owner of
this Certificate will be deemed to have represented to the Trustee and the
Servicer, by virtue of its acquisition of a beneficial interest in this
Certificate, that it is not a Plan Investor.
Subject to the terms of the Pooling and Servicing Agreement, the
Certificates of this Class will be registered as one or more certificates held
by a Clearing Agency or its nominee and beneficial interests will be held by
Beneficial Owners through the book-entry facilities of such Clearing Agency or
its nominee in minimum denominations of $25,000 and integral multiples of $1 in
excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and
<PAGE> 43
neither the Depositor, the Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates, or (ii) the Servicer may, at its option, make a Terminating
Purchase or cause a Terminating Purchase to be made if the Servicer determines,
based upon an Opinion of Counsel, that the REMIC status of either REMIC has been
lost or that a substantial risk exists that such REMIC status will be lost for
the then-current taxable year. After a Terminating Purchase, the Termination
Price shall be applied to pay previously unreimbursed Advances and
administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by Harris
Trust and Savings Bank, but are made and intended for the purposes of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Harris
<PAGE> 44
Trust and Savings Bank, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the holder hereto and by any person claiming by, through or
under such holder, and (d) under no circumstances shall Harris Trust and Savings
Bank be personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Certificate.
<PAGE> 45
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1998-A.
Dated: JANUARY 23, 1998 BCMSC TRUST 1998-A
By:HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
BY: _____________________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS M CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________________
AUTHORIZED OFFICER
<PAGE> 46
Exhibit C
Form of Class B Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BECAUSE THE CLASS B-1 CERTIFICATES ARE SUBORDINATED SECURITIES, THEY WILL NOT
SATISFY THE REQUIREMENTS OF CERTAIN PROHIBITED TRANSACTION EXEMPTIONS. AS A
RESULT, THE PURCHASE OR HOLDING OF ANY OF THE CLASS B-1 CERTIFICATES BY A PLAN
INVESTOR MAY CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION OR RESULT IN THE
IMPOSITION OF EXCISE TAXES OR CIVIL PENALTIES. ACCORDINGLY, NONE OF THE CLASS
B-1 CERTIFICATES ARE OFFERED FOR SALE, AND ARE NOT TRANSFERABLE, TO PLAN
INVESTORS, AND EACH PURCHASER OF A CLASS B-1 CERTIFICATE, BY VIRTUE OF ITS
PURCHASE OF SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT
A PLAN INVESTOR.
THE CLASS B-1 CERTIFICATES ARE SUBORDINATED TO THE CLASS A-1, CLASS A-2, CLASS
A-3, CLASS A-4, CLASS A-5 AND CLASS M CERTIFICATES ISSUED BY THE TRUST DESCRIBED
HEREIN TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS B-1 PASS-THROUGH CERTIFICATE
THIS CLASS B-1 CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST UNDER
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, FOR FEDERAL INCOME TAX
PURPOSES.
THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO
TIME WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET
FORTH BELOW, AND MAY BE ZERO. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE.
<PAGE> 47
PASS-THROUGH RATE: CALCULATED AS CERTIFICATE PRINCIPAL BALANCE OF THE
DESCRIBED HEREIN CLASS B-1 CERTIFICATES AS OF THE
CLOSING DATE: $19,430,000
DENOMINATION: $19,430,000 SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND SERVICING TRUSTEE: HARRIS TRUST AND SAVINGS
AGREEMENT: AS OF JANUARY 1, 1998 BANK
CLOSING DATE: JANUARY 23, 1998
FIRST DISTRIBUTION DATE:
FEBRUARY 17, 1998
NO. 1 CUSIP NO.: 09774X AG7
<PAGE> 48
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS B-1 PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured housing
(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: CEDE & CO.
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class B-1 Certificates issued by BCMSC Trust 1998-A (the "Trust"), which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer", which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement") . The Trust consists primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
Distributions of principal of and interest on this Certificate
(including the final distribution on this Certificate) will be made out of the
Available Distribution Amount, to the extent and subject to the limitations set
forth in the Pooling and Servicing Agreement, on the 15th day of each month
commencing in February 1998 or, if such 15th day is not
<PAGE> 49
a Business Day, the Business Day immediately following (a "Distribution Date"),
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month immediately preceding the month
of such distribution (the related "Record Date"). All sums distributed on this
Certificate are payable in the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date will be equal to the lesser of 7.43% per annum or the Weighted
Average Net Asset Rate. Principal and interest will be distributed on this
Certificate on any Distribution Date in the manner specified in the Pooling and
Servicing Agreement. Distributions allocated to the Class B-1 Certificates will
be allocated among the Certificates of such Class pro rata based upon their
respective Percentage Interests, with a final distribution to be made upon
retirement of this Certificate as set forth in the Pooling and Servicing
Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein called the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof equal to the quotient, expressed as a
percentage, obtained by dividing the denomination of this Certificate specified
on the face hereof by the initial aggregate Certificate Principal Balance of the
Class B-1 Certificates. The Certificates are issued in ten classes as
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
The Class B-1 Certificates will be subordinated to the Class A-l, Class
A-2, Class A-3, Class A-4, Class A-5 and Class M Certificates, and the Class
B-2, Class X and Class R Certificates will be subordinated to the Class B-1
Certificates, in each case to the extent provided in the Pooling and Servicing
Agreement.
Certain Realized Losses on and certain other shortfalls in respect of
the Assets will be allocated on any Distribution Date to Holders of Subordinated
Certificates by allocation to the related Certificates of a Writedown Amount in
the manner set forth in the Pooling and Servicing Agreement. Writedown Amounts
will be allocated on each Distribution Date first to the Class B-2 Certificates,
next to the Class B-1 Certificates, and finally to the Class M Certificates, in
each case to reduce the Adjusted Certificate Principal Balance of such Class
until it has been reduced to zero. All Writedown Amounts allocated to any Class
of Certificates will be allocated pro rata among the outstanding
<PAGE> 50
Certificates of such Class in proportion with their respective Percentage
Interests.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time for purposes other than distributions to Holders, such
purposes including reimbursement of Advances made by the Servicer, or certain
expenses incurred, with respect to the Assets and administration of the Trust.
So long as this Certificate is registered in the name of a Clearing
Agency or its nominee, the Trustee will make payments of principal and interest
on this Certificate by wire transfers of immediately available funds to the
Clearing Agency or its nominee. Otherwise, all distributions made on any
Certificate pursuant to the Pooling and Servicing Agreement will be made by or
on behalf of the Trustee on each Distribution Date to the Holder of such
Certificate as of the related Record Date (i) by check mailed to Such Holder at
its address reflected in the Certificate Register as of the related Record Date
or (ii) if such Holder is the Holder of Certificates of this Class with
aggregate initial denominations of at least $1,000,000, by wire transfer of
immediately available funds to the account of such Holder, upon receipt by the
Trustee of a written request of such Holder accompanied by the appropriate
wiring instructions at or before the Closing Date or, in the case of any wire
instructions delivered after the Closing Date, at least five Business Days prior
to the related Record Date. A fee may be charged by the Trustee to a Holder of
Certificates for any distribution made to such Holder by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in the final distribution notice to Certificateholders.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu
<PAGE> 51
herefor, regardless of whether notation of such consent is made upon this
Certificate. The Pooling and Servicing Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to any
limitations on transfer of this Certificate by a Clearing Agency or its nominee
and certain limitations set forth in the Pooling and Servicing Agreement and
below, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
principal Corporate Trust Office of the Trustee or such other offices or
agencies appointed by the Trustee for that purpose or such other locations, if
any, provided in the Pooling and Servicing Agreement, duly endorsed by, or
accompanied by an assignment in the form attached hereto or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations will be issued to the designated transferee or
transferees.
No transfer of all or any portion of the Class B-1 Certificates may be
made to a proposed transferee that is a Plan Investor. Each Beneficial Owner of
this Certificate will be deemed to have represented to the Trustee and the
Servicer, by virtue of its acquisition of a beneficial interest in this
Certificate, that it is not a Plan Investor.
Subject to the terms of the Pooling and Servicing Agreement, the
Certificates of this Class will be registered as one or more certificates held
by a Clearing Agency or its nominee and beneficial interests will be held by
Beneficial Owners through the book-entry facilities of such Clearing Agency or
its nominee in minimum denominations of $25,000 and integral multiples of $1 in
excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and
<PAGE> 52
neither the Depositor, the Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates, or (ii) the Servicer may, at its option, make a Terminating
Purchase or cause a Terminating Purchase to be made if the Servicer determines,
based upon an Opinion of Counsel, that the REMIC status of either REMIC has been
lost or that a substantial risk exists that such REMIC status will be lost for
the then-current taxable year. After a Terminating Purchase, the Termination
Price shall be applied to pay previously unreimbursed Advances and
administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by Harris
Trust and Savings Bank, but are made and intended for the purposes of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Harris Trust and Savings Bank, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the holder hereto and by any person
claiming by, through or under such holder, and (d) under no circumstances shall
Harris Trust and Savings Bank be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Certificate.
<PAGE> 53
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1998-A.
Dated: JANUARY 23, 1998 BCMSC TRUST 1998-A
By: HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
BY: _____________________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS B-1 CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________________
AUTHORIZED OFFICER
<PAGE> 54
Exhibit D
Form of Class X Certificate
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS X PASS-THROUGH CERTIFICATE
THE CLASS X CERTIFICATES ARE SUBORDINATED TO THE OTHER CLASSES OF THE
CERTIFICATES ISSUED BY THE TRUST DESCRIBED HEREIN (OTHER THAN THE CLASS R
CERTIFICATES) TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION
UNDER SUCH LAWS OR QUALIFICATION FOR AN EXEMPTION FROM SUCH REGISTRATION. THE
TRUSTEE SHALL REQUIRE A CERTIFICATE FROM ANY TRANSFEROR AND TRANSFEREE HEREOF
DEMONSTRATING COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND, UNDER CERTAIN
CIRCUMSTANCES, THE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL WITH RESPECT TO
SUCH REGISTRATION OR QUALIFICATION. ANY TRANSFEREE OF THIS CERTIFICATE MUST
DELIVER TO THE TRUSTEE, THE SELLER AND THE SERVICER A TRANSFEREE AGREEMENT
CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS AND AN AFFIDAVIT OF THE
TRANSFEREE OF TRANSFEREE AS TO VARIOUS ERISA MATTERS (AND AN OPINION OF COUNSEL
AS TO ERISA MATTERS IF REQUIRED UNDER SUCH AFFIDAVIT). RESTRICTIONS ON TRANSFER
OF THIS CERTIFICATE ARE DESCRIBED MORE FULLY HEREIN.
THE HOLDER OF THIS CLASS X CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL.
THIS CLASS X CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST UNDER
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, FOR FEDERAL INCOME TAX
PURPOSES.
PERCENTAGE INTEREST: N/A SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND SERVICING
AGREEMENT: AS OF JANUARY 1, 1998
CLOSING DATE: JANUARY 23, 1998
<PAGE> 55
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS X PASS-THROUGH CERTIFICATE
FIRST DISTRIBUTION DATE: TRUSTEE: HARRIS TRUST AND SAVINGS
FEBRUARY 17, 1998 BANK
NO. 1
<PAGE> 56
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS X PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured housing
(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: BOMBARDIER CAPITAL MORTGAGE SECURITIZATION
CORPORATION
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class X Certificates issued by BCMSC Trust 1998-A (the "Trust"), which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer," which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
Provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement"). The Trust consists primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
The Holder of this Certificate will not be entitled to any scheduled
distributions of principal. Distributions on this Certificate, if any (including
the final distribution on this Certificate), will be made on the 15th day of
each month commencing in February, 1998 or, if such 15th day is not a Business
Day, the Business Day immediately following (a "Distribution Date"), to the
Person in whose name this Certificate is
<PAGE> 57
registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the related "Record
Date"). All sums distributed on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
The Holders of the Class X Certificates are entitled to receive on each
Distribution Date the applicable Class X Strip Amount, as described in the
Pooling and Servicing Agreement. Distributions allocated to the Class X
Certificates will be allocated among the Certificates of such Class pro rata
based upon their respective Percentage Interests, with a final distribution to
be made upon retirement of this Certificate as set forth in the Pooling and
Servicing Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein called the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof. The Certificates are issued in ten
classes as specifically set forth in the Pooling and Servicing Agreement. The
Certificates will evidence in the aggregate 100% of the beneficial ownership of
the Trust.
The Class X Certificates will be subordinated to the Certificates of
all other Classes (other than the Class R Certificates) to the extent provided
in the Pooling and Servicing Agreement.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time for purposes other than distributions to Holders, such
purposes including reimbursement of Advances made by the Servicer, or certain
expenses incurred, with respect to the Assets and administration of the Trust.
All distributions made on any Certificate pursuant to the Pooling and
Servicing Agreement will be made by or on behalf of the Trustee on each
Distribution Date to the Holder of such Certificate as of the related Record
Date (i) by check mailed to such Holder at its address reflected in the
Certificate Register as of the related Record Date or (ii) if such Holder is the
Holder of Certificates of this Class evidencing Percentage Interests of 50% or
greater, by wire transfer of immediately available funds to the account of such
Holder, upon receipt by the Trustee of a written request of such Holder
accompanied by the appropriate wiring instructions at or before the Closing Date
or, in the case of any wire instructions delivered after the Closing Date, at
least five Business Days prior to the related Record Date. A fee may be
<PAGE> 58
charged by the Trustee to a Holder of Certificates for any distribution made to
such Holder by wire transfer. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Trustee specified in the final
distribution notice to Certificateholders.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the principal Corporate Trust Office of the Trustee
or such other offices or agencies appointed by the Trustee for that purpose or
such other locations, if any, provided in the Pooling and Servicing Agreement,
duly endorsed by, or accompanied by an assignment in the form attached hereto or
other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations will be issued to the designated
transferee or transferees.
The Certificates of this Class are issuable in fully-registered,
certificated form without coupons in minimum Percentage Interests of 10% and
integral multiples thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the
<PAGE> 59
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
No transfer of any Class X Certificates shall be made unless that
transfer is made pursuant to an effective registration statement under the 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. In the event that a transfer is to be made without registration
or qualification under the Act and applicable state securities laws, the Trustee
shall not register such transfer unless and until the prospective transferee
provides the Trustee with a Transferee Agreement or a Rule 144A Agreement
certifying to facts which, if true, would mean that the proposed transferee is a
Qualified Institutional Buyer. Forms of Transferee Agreements and Rule 144A
Agreements are attached to the Pooling and Servicing Agreement. In addition, if
the proposed transferee delivers a Rule 144A Agreement that does not certify to
facts that, if true, would mean that the proposed 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
or qualification exemption relied upon and (ii) if such transfer is made within
three years after the acquisition thereof by a non-Affiliate of the Depositor
from the Depositor or an Affiliate of the Depositor, the Servicer or the Trustee
may also 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
Depositor, the Trustee or the Servicer. Neither the Depositor, the Trustee nor
the Servicer is obligated to register or qualify any of the Class X Certificates
under the Act or any other securities law or to take any action not otherwise
required under the Pooling and Servicing Agreement to permit the transfer of
such Certificates without such registration or qualification. Any such Holder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Depositor, the Trustee and the Servicer against any liability that may result if
the transfer is not exempt from registration under the Act and all applicable
state securities laws or is not made in accordance with such federal and state
laws.
Further, no transfer of a Class X Certificate shall be made unless and
until the prospective transferee provides the Servicer and the Trustee with a
properly executed and completed Benefit Plan Affidavit (and a Benefit Plan
Opinion, if required pursuant to the Benefit Plan Affidavit), which Affidavit
(and Opinion, if required) shall not be obtained at the expense of the Trustee,
the Depositor or the Servicer. Notwithstanding anything herein to the contrary,
any purported transfer of a Class X Certificate to or on behalf of a Plan
Investor without delivery of a Benefit Plan Opinion shall be null and void.
<PAGE> 60
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates, or (ii) the Servicer may, at its option, make a Terminating
Purchase or cause a Terminating Purchase to be made if the Servicer determines,
based upon an Opinion of Counsel, that the REMIC status of either REMIC has been
lost or that a substantial risk exists that such REMIC status will be lost for
the then-current taxable year. After a Terminating Purchase, the Termination
Price shall be applied to pay previously unreimbursed Advances and
administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the
<PAGE> 61
part of the Trust are made and intended not as personal representations,
undertakings and agreements by Harris Trust and Savings Bank, but are made and
intended for the purposes of binding only the Trust, (c) nothing herein
contained shall be construed as creating any liability on Harris Trust and
Savings Bank, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the holder hereto and by any person claiming by, through or
under such holder, and (d) under no circumstances shall Harris Trust and Savings
Bank be personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Certificate.
<PAGE> 62
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1998-A.
Dated: January 23, 1998 BCMSC TRUST 1998-A
By: HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
BY: _____________________________________
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS X CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________________
AUTHORIZED OFFICER
<PAGE> 63
Exhibit E
Form of Class R Certificate
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS R PASS-THROUGH CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION
UNDER SUCH LAWS OR QUALIFICATION FOR AN EXEMPTION FROM SUCH REGISTRATION. THE
TRUSTEE SHALL REQUIRE A CERTIFICATE FROM ANY TRANSFEROR AND TRANSFEREE HEREOF
DEMONSTRATING COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND, UNDER CERTAIN
CIRCUMSTANCES, THE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL WITH RESPECT TO
SUCH REGISTRATION OR QUALIFICATION. ANY TRANSFEREE OF THIS CERTIFICATE MUST
DELIVER TO THE TRUSTEE, THE SELLER AND THE SERVICER A TRANSFEREE AGREEMENT
CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS. THE SERVICER MUST GIVE ITS
WRITTEN CONSENT TO ANY TRANSFER OF THIS CLASS R CERTIFICATE. AS A CONDITION TO
THIS CONSENT, A TRANSFEREE MUST PROVIDE THE SERVICER WITH A RESIDUAL TRANSFEREE
AGREEMENT CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS, AN AFFIDAVIT
RELATING TO VARIOUS TAX MATTERS, AND AN AFFIDAVIT RELATING TO VARIOUS ERISA
MATTERS (AND AN OPINION OF COUNSEL AS TO ERISA MATTERS IF REQUIRED UNDER SUCH
AFFIDAVIT), ALL AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. NO TRANSFER OF A CLASS R CERTIFICATE SHALL BE PERMITTED TO BE MADE TO A
DISQUALIFIED ORGANIZATION, WHICH GENERALLY INCLUDES ANY ENTITY THAT WOULD BE
EXEMPT FROM FEDERAL INCOME TAXATION (INCLUDING THE TAX ON UNRELATED BUSINESS
TAXABLE INCOME) ON INCOME DERIVED FROM THIS CLASS R CERTIFICATE. NOTWITHSTANDING
THE FULFILLMENT OF THE PREREQUISITES DESCRIBED ABOVE, THE SERVICER MAY WITHHOLD
ITS CONSENT TO A TRANSFER TO THE EXTENT NECESSARY TO AVOID A RISK OF (1)
DISQUALIFICATION OF EITHER REMIC AS A REMIC OR (2) THE IMPOSITION OF A TAX UPON
EITHER REMIC. THE SERVICER SHALL NOT GIVE ITS CONSENT TO THE TRANSFER OF LESS
THAN AN ENTIRE INTEREST IN A CLASS R CERTIFICATE UNLESS (1) THE INTEREST
TRANSFERRED IS AN UNDIVIDED INTEREST OR (2) THE TRANSFEROR OR THE TRANSFEREE HAS
PROVIDED THE SERVICER (WITH A COPY TO THE TRUSTEE) WITH AN OPINION THAT THE
TRANSFER WILL NOT JEOPARDIZE THE REMIC STATUS OF EITHER REMIC. RESTRICTIONS ON
TRANSFER OF THIS CERTIFICATE ARE DESCRIBED MORE FULLY HEREIN.
THE HOLDER OF THIS RESIDUAL CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL OR INTEREST.
<PAGE> 64
THIS CLASS R CERTIFICATE REPRESENTS A REMIC RESIDUAL INTEREST IN
EACH OF TWO REMICS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
FOR FEDERAL INCOME TAX PURPOSES.
PERCENTAGE INTEREST: N/A SERVICER:BOMBARDIER CAPITAL INC.
DATE OF POOLING AND
SERVICING AGREEMENT:
AS OF JANUARY 1, 1998
CLOSING DATE: JANUARY 23, 1998 TRUSTEE: HARRIS TRUST AND SAVINGS BANK
FIRST DISTRIBUTION DATE:
FEBRUARY 17, 1998
NO. 1
<PAGE> 65
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS R PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured
housing(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: BOMBARDIER CAPITAL INC.
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class R Certificates issued by BCMSC Trust 1998-A (the "Trust"), which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer," which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement"). The Trust consists primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
The Holder of this Certificate will not be entitled to any scheduled
distributions of principal or interest. Distributions on this Certificate, if
any (including the final distribution on this Certificate), will be made on the
15th day of each month commencing in February 1998 or, if such 15th day is not a
Business Day, the Business Day immediately following (a "Distribution Date"), to
the Person in whose name this Certificate is registered at the close of business
on the last
<PAGE> 66
Business Day of the month immediately preceding the month of such distribution
(the related "Record Date"). All sums distributed on this Certificate are
payable in the coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.
Distributions, if any, will be made to the Holders of the Class R
Certificates as described in the Pooling and Servicing Agreement. Distributions
allocated to the Class R Certificates will be allocated among the Certificates
of such Class pro rata based upon their respective Percentage Interests, with a
final distribution to be made upon retirement of this Certificate as set forth
in the Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein call the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof. The Certificates are issued in ten
classes as specifically set forth in the Pooling and Servicing Agreement. The
Class R Certificates are sometimes referred to as the "Residual Certificates."
The Certificates will evidence in the aggregate 100% of the beneficial ownership
of the Trust.
The Class R Certificates will be subordinated to the Certificates of
all other Classes to the extent provided in the Pooling and Servicing Agreement.
The Certificates are limited in right of payment to certain collection
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time for purposes other than distributions to Holders, such
purposes including reimbursement of Advances made by the Servicer, or certain
expenses incurred, with respect to the Assets and administrations of the Trust.
All distributions made on any Certificate pursuant to the Pooling and
Servicing Agreement will be made by or on behalf of the Trustee on each
Distribution Date to the Holder of such Certificate as of the related Record
Date (i) by check mailed to such Holder at its address reflected in the
Certificate Register as of the related Record Date or (ii) if such Holder is the
Holder of Certificates of this Class evidencing Percentage Interests of 50% or
greater, by wire transfer of immediately available funds to the account of such
Holder, upon receipt by the Trustee of a written request of such Holder
accompanied by the appropriate wiring instructions at or before the Closing Date
or, in the case of any wire instructions delivered after the Closing Date, at
least
<PAGE> 67
five Business Days prior to the related Record Date. A fee may be charged by the
Trustee to a Holder of Certificates for any distributions made to such Holder by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency of the Trustee specified in the final distribution notice to
Certificateholders.
An election will be made to treat certain of the assets assigned to the
Trust as two separate real estate mortgage investment conduits ("REMICs") under
the Internal Revenue Code of 1986, as amended (the "Code"). Assuming that the
elections are made properly and that certain qualification requirements
concerning the Assets and the Certificates are met, the Holder of this
Certificate will be treated for federal income tax purposes as the beneficial
owner of a "residual interest" in each of the REMICs. Accordingly, the Holder of
this Class R Certificate will be taxed on its pro rata share of each REMIC's
taxable income or net loss. The requirement that the Holder of this Class R
Certificate report its pro rata share of such income or loss will continue until
there are no Certificates of any Class outstanding.
Pursuant to (and subject to the limitations set forth in) the Pooling
and Servicing Agreement, the Servicer or one of its affiliates, as agent of the
REMIC (the "Tax Matters Person" or "TMP"), will provide each Holder of a Class R
Certificate with information sufficient to enable such holder to prepare (i) its
federal income tax and information returns and (ii) any reports required by the
Code regarding the Certificates, except where such information is provided to
each such Holder by the Trustee pursuant to the Pooling and Servicing Agreement.
As the Holder of a residual interest in the REMICs, the Holder of a Class R
Certificate will have continuing administrative rights and obligations generally
similar to those of a partner with respect to its partnership. Such rights and
obligations principally concern the REMICs' federal income tax and information
returns and the representation of the REMICs in administrative or judicial
proceedings involving the Internal Revenue Service. The TMP, however, will act
on behalf of the Holders of the Class R Certificates as the REMICs
representative for such proceedings. The REMICs' federal tax and information
returns will be prepared by the TMP, and signed and filed by the Trustee.
Pursuant to the Pooling and Servicing Agreement, if the TMP is unable for any
reason to fulfill its duties as TMP, then the Holder of the largest Percentage
Interest of the Residual Certificates, without compensation, shall become the
successor TMP for the REMICs; provided, however, that in no event shall the
Trustee be required to act as TMP (regardless of whether the Trustee is acting
as successor Servicer).
<PAGE> 68
By accepting this Certificate, the Holder of this Certificate agrees to
be bound by all of the provisions of the Pooling and Servicing Agreement, and,
in particular, agrees that it shall (i) take any action required by the Code or
Treasury regulations thereunder in order to create or maintain the REMIC status
of either REMIC and (ii) refrain from taking any action that could endanger such
status.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration or transfer at the principal Corporate Trust Office of the Trustee
or such other offices or agencies appointed by the Trustee for that purpose or
such other locations, if any, provided in the Pooling and Servicing Agreement,
duly endorsed by, or accompanied by an assignment in the form attached hereto or
other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations will be issued to the designated
transferee or transferees.
The Certificates of this Class are issuable in fully-registered,
certificated form without coupons in minimum Percentage Interests of 10% and
integral multiples thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE> 69
governmental charge that may be imposed in connection with any transfer
or exchange of Certificates.
No transfer of any Class R Certificates shall be made unless that
transfer is made pursuant to an effective registration statement under the 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. In the event that a transfer is to be made without registration
or qualification under the Act and applicable state securities laws, the Trustee
shall not register such transfer unless and until the prospective transferee
provides the Trustee with a Transferee Agreement or a Rule 144A Agreement
certifying to facts which, if true, would mean that the proposed transferee is a
Qualified Institutional Buyer. Forms of Transferee Agreements and Rule 144A
Agreements are attached to the Pooling and Servicing Agreement. In addition, if
the proposed transferee delivers a Rule 144A Agreement that does not certify to
facts that, if true, would mean that the proposed 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
or qualification exemption relied upon and (ii) if such transfer is made within
three years after the acquisition thereof by a non-Affiliate of the Depositor
from the Depositor or an Affiliate of the Depositor, the Servicer or the Trustee
may also 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
Depositor, the Trustee or the Servicer. Neither the Depositor, the Trustee nor
the Servicer is obligated to register or qualify any of the Class R Certificates
under the Act or any other securities law or take any action not otherwise
required under the Pooling and Servicing Agreement to permit the transfer of
such Certificates without such registration or qualification. Any such Holder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Depositor, the Trustee and the Servicer against any liability that may result if
the transfer is not exempt from registration under the Act and all applicable
state securities laws or is not made in accordance with such federal and state
laws.
Further, no transfer of a Class R Certificate shall be made unless and
until the prospective transferee provides the Servicer and the Trustee with a
properly executed and completed Benefit Plan Affidavit (and a Benefit Plan
Opinion, if required pursuant to the Benefit Plan Affidavit), which Affidavit
(and Opinion, if required) shall not be obtained at the expense of the Trustee,
the Depositor or the Servicer. Notwithstanding anything herein to the contrary,
any purported transfer of a Class R Certificate to or on behalf of a Plan
Investor without delivery of a Benefit Plan Opinion shall be null and void.
<PAGE> 70
In addition, the Trustee shall not register any transfer of a Class R
Certificate (including any beneficial interest therein) without first obtaining
the written consent of the Servicer. The Servicer will not give such consent to
any proposed transfer or sale to any investor that the Servicer knows to be a
Disqualified Organization. As prerequisites to the Servicer's consent to any
transfer of a Class R Certificate (or any beneficial interest therein), the
proposed transferee thereof must provide the Servicer with (i) a Residual
Transferee Agreement and (ii) (A) if the proposed 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 proposed transferee is a U.S. Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit 8-B to Exhibit 8 to the
Standard Terms. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to a transfer, but only to the
extent necessary to avoid a risk of (i) disqualification of either REMIC as a
REMIC or (ii) the imposition of a tax upon either REMIC. In addition, the
Servicer shall not give its consent to the transfer of less than an entire
interest in a Class R Certificate unless (A) 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 that the transfer will
not jeopardize the REMIC status of either 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 either REMIC as a result of
the transfer of a Class R Certificate (or any beneficial interest therein) in
violation of the restrictions set forth herein and in the Pooling and Servicing
Agreement, the Trustee (or the Paying Agent), upon notification from the
Servicer, shall pay such tax or reporting cost with amounts that otherwise would
have been paid to the transferee of the Class R 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 Depositor, the
Trustee (or the Paying Agent), the Servicer, the Trust, either REMIC or any
other Holders, and none of such parties shall have any liability for payment of
any such tax or reporting cost.
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
<PAGE> 71
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates, or (ii) the Servicer may, at its option, make a Terminating
Purchase or cause a Terminating Purchase to be made if the Servicer determines,
based upon an Opinion of Counsel, that the REMIC status of either REMIC has been
lost or that a substantial risk exists that such REMIC status will be lost for
the then-current taxable year. After a Terminating Purchase, the Termination
Price shall be applied to pay previously unreimbursed Advances and
administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by Harris
Trust and Savings Bank, but are made and intended for the purposes of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Harris Trust and Savings Bank, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the holder hereto and by any
<PAGE> 72
person claiming by, through or under such holder, and (d) under no circumstances
shall Harris Trust and Savings Bank be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Certificate.
<PAGE> 73
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on behalf of BCMSC Trust 1998-A.
Dated: JANUARY 23, 1998 BCMSC TRUST 1998-A
By: HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
BY: ___________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________
AUTHORIZED OFFICER
<PAGE> 74
Exhibit R-1
Form of Class R-1 Certificate
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS R PASS-THROUGH CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION
UNDER SUCH LAWS OR QUALIFICATION FOR AN EXEMPTION FROM SUCH REGISTRATION. THE
TRUSTEE SHALL REQUIRE A CERTIFICATE FROM ANY TRANSFEROR AND TRANSFEREE HEREOF
DEMONSTRATING COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND, UNDER CERTAIN
CIRCUMSTANCES, THE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL WITH RESPECT TO
SUCH REGISTRATION OR QUALIFICATION. ANY TRANSFEREE OF THIS CERTIFICATE MUST
DELIVER TO THE TRUSTEE, THE SELLER AND THE SERVICER A TRANSFEREE AGREEMENT
CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS. THE SERVICER MUST GIVE ITS
WRITTEN CONSENT TO ANY TRANSFER OF THIS CLASS R CERTIFICATE. AS A CONDITION TO
THIS CONSENT, A TRANSFEREE MUST PROVIDE THE SERVICER WITH A RESIDUAL TRANSFEREE
AGREEMENT CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS, AN AFFIDAVIT
RELATING TO VARIOUS TAX MATTERS, AND AN AFFIDAVIT RELATING TO VARIOUS ERISA
MATTERS (AND AN OPINION OF COUNSEL AS TO ERISA MATTERS IF REQUIRED UNDER SUCH
AFFIDAVIT), ALL AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. NO TRANSFER OF A CLASS R CERTIFICATE SHALL BE PERMITTED TO BE MADE TO A
DISQUALIFIED ORGANIZATION, WHICH GENERALLY INCLUDES ANY ENTITY THAT WOULD BE
EXEMPT FROM FEDERAL INCOME TAXATION (INCLUDING THE TAX ON UNRELATED BUSINESS
TAXABLE INCOME) ON INCOME DERIVED FROM THIS CLASS R CERTIFICATE. NOTWITHSTANDING
THE FULFILLMENT OF THE PREREQUISITES DESCRIBED ABOVE, THE SERVICER MAY WITHHOLD
ITS CONSENT TO A TRANSFER TO THE EXTENT NECESSARY TO AVOID A RISK OF (1)
DISQUALIFICATION OF EITHER REMIC AS A REMIC OR (2) THE IMPOSITION OF A TAX UPON
EITHER REMIC. THE SERVICER SHALL NOT GIVE ITS CONSENT TO THE TRANSFER OF LESS
THAN AN ENTIRE INTEREST IN A CLASS R CERTIFICATE UNLESS (1) THE INTEREST
TRANSFERRED IS AN UNDIVIDED INTEREST OR (2) THE TRANSFEROR OR THE TRANSFEREE HAS
PROVIDED THE SERVICER (WITH A COPY TO THE TRUSTEE) WITH AN OPINION THAT THE
TRANSFER WILL NOT JEOPARDIZE THE REMIC STATUS OF EITHER REMIC. RESTRICTIONS ON
TRANSFER OF THIS CERTIFICATE ARE DESCRIBED MORE FULLY HEREIN.
THE HOLDER OF THIS RESIDUAL CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL OR INTEREST.
<PAGE> 75
THIS CLASS R CERTIFICATE REPRESENTS A REMIC RESIDUAL INTEREST IN THE
ISSUING REMIC UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, FOR
FEDERAL INCOME TAX PURPOSES.
PERCENTAGE INTEREST: N/A SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND
SERVICING AGREEMENT:
AS OF JANUARY 1, 1998
CLOSING DATE: JANUARY 23, 1998 TRUSTEE: HARRIS TRUST AND SAVINGS BANK
FIRST DISTRIBUTION DATE:
FEBRUARY 17, 1998
NO. 1
<PAGE> 76
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS R PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured
housing(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: BOMBARDIER CAPITAL INC.
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class R Certificates issued by BCMSC Trust 1998-A (the "Trust"), which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer," which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement"). The Trust consists primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
The Holder of this Certificate will not be entitled to any scheduled
distributions of principal or interest. Distributions on this Certificate, if
any (including the final distribution on this Certificate), will be made on the
15th day of each month commencing in February 1998 or, if such 15th day is not a
Business Day, the Business Day immediately following (a "Distribution Date"), to
the Person in whose name this Certificate is registered at the close of business
on the last
<PAGE> 77
Business Day of the month immediately preceding the month of such distribution
(the related "Record Date"). All sums distributed on this Certificate are
payable in the coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.
Distributions, if any, will be made to the Holders of the Class R
Certificates as described in the Pooling and Servicing Agreement. Distributions
allocated to the Class R Certificates will be allocated among the Certificates
of such Class pro rata based upon their respective Percentage Interests, with a
final distribution to be made upon retirement of this Certificate as set forth
in the Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein call the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof. The Certificates are issued in ten
classes as specifically set forth in the Pooling and Servicing Agreement. The
Class R Certificates are sometimes referred to as the "Residual Certificates."
The Certificates will evidence in the aggregate 100% of the beneficial ownership
of the Trust.
The Class R Certificates will be subordinated to the Certificates of
all other Classes to the extent provided in the Pooling and Servicing Agreement.
The Certificates are limited in right of payment to certain collection
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time for purposes other than distributions to Holders, such
purposes including reimbursement of Advances made by the Servicer, or certain
expenses incurred, with respect to the Assets and administrations of the Trust.
All distributions made on any Certificate pursuant to the Pooling and
Servicing Agreement will be made by or on behalf of the Trustee on each
Distribution Date to the Holder of such Certificate as of the related Record
Date (i) by check mailed to such Holder at its address reflected in the
Certificate Register as of the related Record Date or (ii) if such Holder is the
Holder of Certificates of this Class evidencing Percentage Interests of 50% or
greater, by wire transfer of immediately available funds to the account of such
Holder, upon receipt by the Trustee of a written request of such Holder
accompanied by the appropriate wiring instructions at or before the Closing Date
or, in the case of any wire instructions delivered after the Closing Date, at
least
<PAGE> 78
five Business Days prior to the related Record Date. A fee may be charged by the
Trustee to a Holder of Certificates for any distributions made to such Holder by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency of the Trustee specified in the final distribution notice to
Certificateholders.
An election will be made to treat certain of the assets assigned to the
Trust as two separate real estate mortgage investment conduits ("REMICs") under
the Internal Revenue Code of 1986, as amended (the "Code"). Assuming that the
elections are made properly and that certain qualification requirements
concerning the Assets and the Certificates are met, the Holder of this
Certificate will be treated for federal income tax purposes as the beneficial
owner of a "residual interest" in the Issuing REMIC. Accordingly, the Holder of
this Class R Certificate will be taxed on its pro rata share of each REMIC's
taxable income or net loss. The requirement that the Holder of this Class R
Certificate report its pro rata share of such income or loss will continue until
there are no Certificates of any Class outstanding.
Pursuant to (and subject to the limitations set forth in) the Pooling
and Servicing Agreement, the Servicer or one of its affiliates, as agent of the
REMIC (the "Tax Matters Person" or "TMP"), will provide each Holder of a Class R
Certificate with information sufficient to enable such holder to prepare (i) its
federal income tax and information returns and (ii) any reports required by the
Code regarding the Certificates, except where such information is provided to
each such Holder by the Trustee pursuant to the Pooling and Servicing Agreement.
As the Holder of a residual interest in the Issuing REMIC, the Holder of a Class
R Certificate will have continuing administrative rights and obligations
generally similar to those of a partner with respect to its partnership. Such
rights and obligations principally concern the REMICs' federal income tax and
information returns and the representation of the REMICs in administrative or
judicial proceedings involving the Internal Revenue Service. The TMP, however,
will act on behalf of the Holders of the Class R Certificates as the REMICs'
representative for such proceedings. The REMICs' federal tax and information
returns will be prepared by the TMP, and signed and filed by the Trustee.
Pursuant to the Pooling and Servicing Agreement, if the TMP is unable for any
reason to fulfill its duties as TMP, then the Holder of the largest Percentage
Interest of the Residual Certificates, without compensation, shall become the
successor TMP for the REMICs; provided, however, that in no event shall the
Trustee be required to act as TMP (regardless of whether the Trustee is acting
as successor Servicer).
<PAGE> 79
By accepting this Certificate, the Holder of this Certificate agrees to
be bound by all of the provisions of the Pooling and Servicing Agreement, and,
in particular, agrees that it shall (i) take any action required by the Code or
Treasury regulations thereunder in order to create or maintain the REMIC status
of either REMIC and (ii) refrain from taking any action that could endanger such
status.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration or transfer at the principal Corporate Trust Office of the Trustee
or such other offices or agencies appointed by the Trustee for that purpose or
such other locations, if any, provided in the Pooling and Servicing Agreement,
duly endorsed by, or accompanied by an assignment in the form attached hereto or
other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations will be issued to the designated
transferee or transferees.
The Certificates of this Class are issuable in fully-registered,
certificated form without coupons in minimum Percentage Interests of 10% and
integral multiples thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE> 80
governmental charge that may be imposed in connection with any transfer
or exchange of Certificates.
No transfer of any Class R Certificates shall be made unless that
transfer is made pursuant to an effective registration statement under the 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. In the event that a transfer is to be made without registration
or qualification under the Act and applicable state securities laws, the Trustee
shall not register such transfer unless and until the prospective transferee
provides the Trustee with a Transferee Agreement or a Rule 144A Agreement
certifying to facts which, if true, would mean that the proposed transferee is a
Qualified Institutional Buyer. Forms of Transferee Agreements and Rule 144A
Agreements are attached to the Pooling and Servicing Agreement. In addition, if
the proposed transferee delivers a Rule 144A Agreement that does not certify to
facts that, if true, would mean that the proposed 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
or qualification exemption relied upon and (ii) if such transfer is made within
three years after the acquisition thereof by a non-Affiliate of the Depositor
from the Depositor or an Affiliate of the Depositor, the Servicer or the Trustee
may also 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
Depositor, the Trustee or the Servicer. Neither the Depositor, the Trustee nor
the Servicer is obligated to register or qualify any of the Class R Certificates
under the Act or any other securities law or take any action not otherwise
required under the Pooling and Servicing Agreement to permit the transfer of
such Certificates without such registration or qualification. Any such Holder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Depositor, the Trustee and the Servicer against any liability that may result if
the transfer is not exempt from registration under the Act and all applicable
state securities laws or is not made in accordance with such federal and state
laws.
Further, no transfer of a Class R Certificate shall be made unless and
until the prospective transferee provides the Servicer and the Trustee with a
properly executed and completed Benefit Plan Affidavit (and a Benefit Plan
Opinion, if required pursuant to the Benefit Plan Affidavit), which Affidavit
(and Opinion, if required) shall not be obtained at the expense of the Trustee,
the Depositor or the Servicer. Notwithstanding anything herein to the contrary,
any purported transfer of a Class R Certificate to or on behalf of a Plan
Investor without delivery of a Benefit Plan Opinion shall be null and void.
<PAGE> 81
In addition, the Trustee shall not register any transfer of a Class R
Certificate (including any beneficial interest therein) without first obtaining
the written consent of the Servicer. The Servicer will not give such consent to
any proposed transfer or sale to any investor that the Servicer knows to be a
Disqualified Organization. As prerequisites to the Servicer's consent to any
transfer of a Class R Certificate (or any beneficial interest therein), the
proposed transferee thereof must provide the Servicer with (i) a Residual
Transferee Agreement and (ii) (A) if the proposed 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 proposed transferee is a U.S. Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit 8-B to Exhibit 8 to the
Standard Terms. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to a transfer, but only to the
extent necessary to avoid a risk of (i) disqualification of either REMIC as a
REMIC or (ii) the imposition of a tax upon either REMIC. In addition, the
Servicer shall not give its consent to the transfer of less than an entire
interest in a Class R Certificate unless (A) 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 that the transfer will
not jeopardize the REMIC status of either 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 either REMIC as a result of
the transfer of a Class R Certificate (or any beneficial interest therein) in
violation of the restrictions set forth herein and in the Pooling and Servicing
Agreement, the Trustee (or the Paying Agent), upon notification from the
Servicer, shall pay such tax or reporting cost with amounts that otherwise would
have been paid to the transferee of the Class R 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 Depositor, the
Trustee (or the Paying Agent), the Servicer, the Trust, either REMIC or any
other Holders, and none of such parties shall have any liability for payment of
any such tax or reporting cost.
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
<PAGE> 82
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates, or (ii) the Servicer may, at its option, make a Terminating
Purchase or cause a Terminating Purchase to be made if the Servicer determines,
based upon an Opinion of Counsel, that the REMIC status of either REMIC has been
lost or that a substantial risk exists that such REMIC status will be lost for
the then-current taxable year. After a Terminating Purchase, the Termination
Price shall be applied to pay previously unreimbursed Advances and
administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by Harris
Trust and Savings Bank, but are made and intended for the purposes of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Harris Trust and Savings Bank, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the holder hereto and by any
<PAGE> 83
person claiming by, through or under such holder, and (d) under no circumstances
shall Harris Trust and Savings Bank be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Certificate.
<PAGE> 84
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on behalf of BCMSC Trust 1998-A.
Dated: JANUARY 23, 1998 BCMSC TRUST 1998-A
By: HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
BY: ____________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________
AUTHORIZED OFFICER
<PAGE> 85
Exhibit R-2
Form of Class R-2 Certificate
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS R PASS-THROUGH CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION
UNDER SUCH LAWS OR QUALIFICATION FOR AN EXEMPTION FROM SUCH REGISTRATION. THE
TRUSTEE SHALL REQUIRE A CERTIFICATE FROM ANY TRANSFEROR AND TRANSFEREE HEREOF
DEMONSTRATING COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND, UNDER CERTAIN
CIRCUMSTANCES, THE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL WITH RESPECT TO
SUCH REGISTRATION OR QUALIFICATION. ANY TRANSFEREE OF THIS CERTIFICATE MUST
DELIVER TO THE TRUSTEE, THE SELLER AND THE SERVICER A TRANSFEREE AGREEMENT
CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS. THE SERVICER MUST GIVE ITS
WRITTEN CONSENT TO ANY TRANSFER OF THIS CLASS R CERTIFICATE. AS A CONDITION TO
THIS CONSENT, A TRANSFEREE MUST PROVIDE THE SERVICER WITH A RESIDUAL TRANSFEREE
AGREEMENT CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS, AN AFFIDAVIT
RELATING TO VARIOUS TAX MATTERS, AND AN AFFIDAVIT RELATING TO VARIOUS ERISA
MATTERS (AND AN OPINION OF COUNSEL AS TO ERISA MATTERS IF REQUIRED UNDER SUCH
AFFIDAVIT), ALL AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. NO TRANSFER OF A CLASS R CERTIFICATE SHALL BE PERMITTED TO BE MADE TO A
DISQUALIFIED ORGANIZATION, WHICH GENERALLY INCLUDES ANY ENTITY THAT WOULD BE
EXEMPT FROM FEDERAL INCOME TAXATION (INCLUDING THE TAX ON UNRELATED BUSINESS
TAXABLE INCOME) ON INCOME DERIVED FROM THIS CLASS R CERTIFICATE. NOTWITHSTANDING
THE FULFILLMENT OF THE PREREQUISITES DESCRIBED ABOVE, THE SERVICER MAY WITHHOLD
ITS CONSENT TO A TRANSFER TO THE EXTENT NECESSARY TO AVOID A RISK OF (1)
DISQUALIFICATION OF EITHER REMIC AS A REMIC OR (2) THE IMPOSITION OF A TAX UPON
EITHER REMIC. THE SERVICER SHALL NOT GIVE ITS CONSENT TO THE TRANSFER OF LESS
THAN AN ENTIRE INTEREST IN A CLASS R CERTIFICATE UNLESS (1) THE INTEREST
TRANSFERRED IS AN UNDIVIDED INTEREST OR (2) THE TRANSFEROR OR THE TRANSFEREE HAS
PROVIDED THE SERVICER (WITH A COPY TO THE TRUSTEE) WITH AN OPINION THAT THE
TRANSFER WILL NOT JEOPARDIZE THE REMIC STATUS OF EITHER REMIC. RESTRICTIONS ON
TRANSFER OF THIS CERTIFICATE ARE DESCRIBED MORE FULLY HEREIN.
THE HOLDER OF THIS RESIDUAL CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL OR INTEREST.
<PAGE> 86
THIS CLASS R CERTIFICATE REPRESENTS A REMIC RESIDUAL INTEREST IN
THE POOLING REMIC UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
FOR FEDERAL INCOME TAX PURPOSES.
PERCENTAGE INTEREST: N/A SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND
SERVICING AGREEMENT:
AS OF JANUARY 1, 1998
CLOSING DATE: JANUARY 23, 1998 TRUSTEE: HARRIS TRUST AND SAVINGS BANK
FIRST DISTRIBUTION DATE:
FEBRUARY 17, 1998
NO. 1
<PAGE> 87
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-A
CLASS R PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts for the sale of units of manufactured
housing(the "Assets") formed and sold by
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BOMBARDIER
CAPITAL MORTGAGE SECURITIZATION CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING ASSETS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT: BOMBARDIER CAPITAL INC.
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class R Certificates issued by BCMSC Trust 1998-A (the "Trust"), which
was created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Series Agreement"), among Bombardier Capital Mortgage Securitization
Corporation (the "Depositor"), Bombardier Capital Inc., as servicer of the
Assets (the "Servicer," which term includes any successor to Bombardier Capital
Inc. as Servicer), and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. The Series Agreement incorporates
by reference the Depositor's Standard Terms to Pooling and Servicing Agreement
(January 1998 Edition) (together with the Series Agreement, the "Pooling and
Servicing Agreement"). The Trust consists primarily of a pool of Assets. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to them in the Pooling and Servicing Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
The Holder of this Certificate will not be entitled to any scheduled
distributions of principal or interest. Distributions on this Certificate, if
any (including the final distribution on this Certificate), will be made on the
15th day of each month commencing in February 1998 or, if such 15th day is not a
Business Day, the Business Day immediately following (a "Distribution Date"), to
the Person in whose name this Certificate is registered at the close of business
on the last
<PAGE> 88
Business Day of the month immediately preceding the month of such distribution
(the related "Record Date"). All sums distributed on this Certificate are
payable in the coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.
Distributions, if any, will be made to the Holders of the Class R
Certificates as described in the Pooling and Servicing Agreement. Distributions
allocated to the Class R Certificates will be allocated among the Certificates
of such Class pro rata based upon their respective Percentage Interests, with a
final distribution to be made upon retirement of this Certificate as set forth
in the Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the Bombardier Capital Mortgage Securitization Corporation
Senior/Subordinated Pass-Through Certificates, Series 1998-A (herein call the
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof. The Certificates are issued in ten
classes as specifically set forth in the Pooling and Servicing Agreement. The
Class R Certificates are sometimes referred to as the "Residual Certificates."
The Certificates will evidence in the aggregate 100% of the beneficial ownership
of the Trust.
The Class R Certificates will be subordinated to the Certificates of
all other Classes to the extent provided in the Pooling and Servicing Agreement.
The Certificates are limited in right of payment to certain collection
and recoveries respecting the Assets, all as more specifically set forth in the
Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Certificate Account and related accounts shall
be made from time to time for purposes other than distributions to Holders, such
purposes including reimbursement of Advances made by the Servicer, or certain
expenses incurred, with respect to the Assets and administrations of the Trust.
All distributions made on any Certificate pursuant to the Pooling and
Servicing Agreement will be made by or on behalf of the Trustee on each
Distribution Date to the Holder of such Certificate as of the related Record
Date (i) by check mailed to such Holder at its address reflected in the
Certificate Register as of the related Record Date or (ii) if such Holder is the
Holder of Certificates of this Class evidencing Percentage Interests of 50% or
greater, by wire transfer of immediately available funds to the account of such
Holder, upon receipt by the Trustee of a written request of such Holder
accompanied by the appropriate wiring instructions at or before the Closing Date
or, in the case of any wire instructions delivered after the Closing Date, at
least
<PAGE> 89
five Business Days prior to the related Record Date. A fee may be charged by the
Trustee to a Holder of Certificates for any distributions made to such Holder by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency of the Trustee specified in the final distribution notice to
Certificateholders.
An election will be made to treat certain of the assets assigned to the
Trust as two separate real estate mortgage investment conduits ("REMICs") under
the Internal Revenue Code of 1986, as amended (the "Code"). Assuming that the
elections are made properly and that certain qualification requirements
concerning the Assets and the Certificates are met, the Holder of this
Certificate will be treated for federal income tax purposes as the beneficial
owner of a "residual interest" in the Pooling REMIC. Accordingly, the Holder of
this Class R Certificate will be taxed on its pro rata share of each REMIC's
taxable income or net loss. The requirement that the Holder of this Class R
Certificate report its pro rata share of such income or loss will continue until
there are no Certificates of any Class outstanding.
Pursuant to (and subject to the limitations set forth in) the Pooling
and Servicing Agreement, the Servicer or one of its affiliates, as agent of the
REMIC (the "Tax Matters Person" or "TMP"), will provide each Holder of a Class R
Certificate with information sufficient to enable such holder to prepare (i) its
federal income tax and information returns and (ii) any reports required by the
Code regarding the Certificates, except where such information is provided to
each such Holder by the Trustee pursuant to the Pooling and Servicing Agreement.
As the Holder of a residual interest in the Pooling REMIC, the Holder of a Class
R Certificate will have continuing administrative rights and obligations
generally similar to those of a partner with respect to its partnership. Such
rights and obligations principally concern the REMICs' federal income tax and
information returns and the representation of the REMICs in administrative or
judicial proceedings involving the Internal Revenue Service. The TMP, however,
will act on behalf of the Holders of the Class R Certificates as the REMICs'
representative for such proceedings. The REMICs' federal tax and information
returns will be prepared by the TMP, and signed and filed by the Trustee.
Pursuant to the Pooling and Servicing Agreement, if the TMP is unable for any
reason to fulfill its duties as TMP, then the Holder of the largest Percentage
Interest of the Residual Certificates, without compensation, shall become the
successor TMP for the REMICs; provided, however, that in no event shall the
Trustee be required to act as TMP (regardless of whether the Trustee is acting
as successor Servicer).
<PAGE> 90
By accepting this Certificate, the Holder of this Certificate agrees to
be bound by all of the provisions of the Pooling and Servicing Agreement, and,
in particular, agrees that it shall (i) take any action required by the Code or
Treasury regulations thereunder in order to create or maintain the REMIC status
of either REMIC and (ii) refrain from taking any action that could endanger such
status.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Holders under the Pooling and Servicing Agreement at any time by the Depositor,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing at least a majority of the Voting Rights of each Class affected by
the proposed amendment (and in certain circumstances a higher percentage of such
Voting Rights as specified in the Pooling and Servicing Agreement). Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations set forth therein, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration or transfer at the principal Corporate Trust Office of the Trustee
or such other offices or agencies appointed by the Trustee for that purpose or
such other locations, if any, provided in the Pooling and Servicing Agreement,
duly endorsed by, or accompanied by an assignment in the form attached hereto or
other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations will be issued to the designated
transferee or transferees.
The Certificates of this Class are issuable in fully-registered,
certificated form without coupons in minimum Percentage Interests of 10% and
integral multiples thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE> 91
governmental charge that may be imposed in connection with any transfer
or exchange of Certificates.
No transfer of any Class R Certificates shall be made unless that
transfer is made pursuant to an effective registration statement under the 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. In the event that a transfer is to be made without registration
or qualification under the Act and applicable state securities laws, the Trustee
shall not register such transfer unless and until the prospective transferee
provides the Trustee with a Transferee Agreement or a Rule 144A Agreement
certifying to facts which, if true, would mean that the proposed transferee is a
Qualified Institutional Buyer. Forms of Transferee Agreements and Rule 144A
Agreements are attached to the Pooling and Servicing Agreement. In addition, if
the proposed transferee delivers a Rule 144A Agreement that does not certify to
facts that, if true, would mean that the proposed 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
or qualification exemption relied upon and (ii) if such transfer is made within
three years after the acquisition thereof by a non-Affiliate of the Depositor
from the Depositor or an Affiliate of the Depositor, the Servicer or the Trustee
may also 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
Depositor, the Trustee or the Servicer. Neither the Depositor, the Trustee nor
the Servicer is obligated to register or qualify any of the Class R Certificates
under the Act or any other securities law or take any action not otherwise
required under the Pooling and Servicing Agreement to permit the transfer of
such Certificates without such registration or qualification. Any such Holder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Depositor, the Trustee and the Servicer against any liability that may result if
the transfer is not exempt from registration under the Act and all applicable
state securities laws or is not made in accordance with such federal and state
laws.
Further, no transfer of a Class R Certificate shall be made unless and
until the prospective transferee provides the Servicer and the Trustee with a
properly executed and completed Benefit Plan Affidavit (and a Benefit Plan
Opinion, if required pursuant to the Benefit Plan Affidavit), which Affidavit
(and Opinion, if required) shall not be obtained at the expense of the Trustee,
the Depositor or the Servicer. Notwithstanding anything herein to the contrary,
any purported transfer of a Class R Certificate to or on behalf of a Plan
Investor without delivery of a Benefit Plan Opinion shall be null and void.
<PAGE> 92
In addition, the Trustee shall not register any transfer of a Class R
Certificate (including any beneficial interest therein) without first obtaining
the written consent of the Servicer. The Servicer will not give such consent to
any proposed transfer or sale to any investor that the Servicer knows to be a
Disqualified Organization. As prerequisites to the Servicer's consent to any
transfer of a Class R Certificate (or any beneficial interest therein), the
proposed transferee thereof must provide the Servicer with (i) a Residual
Transferee Agreement and (ii) (A) if the proposed 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 proposed transferee is a U.S. Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit 8-B to Exhibit 8 to the
Standard Terms. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to a transfer, but only to the
extent necessary to avoid a risk of (i) disqualification of either REMIC as a
REMIC or (ii) the imposition of a tax upon either REMIC. In addition, the
Servicer shall not give its consent to the transfer of less than an entire
interest in a Class R Certificate unless (A) 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 that the transfer will
not jeopardize the REMIC status of either 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 either REMIC as a result of
the transfer of a Class R Certificate (or any beneficial interest therein) in
violation of the restrictions set forth herein and in the Pooling and Servicing
Agreement, the Trustee (or the Paying Agent), upon notification from the
Servicer, shall pay such tax or reporting cost with amounts that otherwise would
have been paid to the transferee of the Class R 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 Depositor, the
Trustee (or the Paying Agent), the Servicer, the Trust, either REMIC or any
other Holders, and none of such parties shall have any liability for payment of
any such tax or reporting cost.
The Depositor, the Servicer, the Trustee and the Certificate Registrar
and any agent of the Depositor, the Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Servicer, the
Trustee, the Certificate Registrar nor any such agent shall be affected by
notice to the contrary.
<PAGE> 93
The obligations created by the Pooling and Servicing Agreement and the
Trust created thereby shall terminate upon payment to the Holders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Pooling and Servicing Agreement following the earlier of (a) the final
payment or other liquidation (or any Advance with respect thereto) of the last
Asset, Repo Property or REO Property remaining in the Trust or (b) a Terminating
Purchase pursuant to the terms of the Pooling and Servicing Agreement. Pursuant
to the terms of the Pooling and Servicing Agreement, (i) the Servicer or the
Residual Majority may, at their respective options, make a Terminating Purchase
or cause a Terminating Purchase to be made on or after the Distribution Date on
which the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates, or (ii) the Servicer may, at its option, make a Terminating
Purchase or cause a Terminating Purchase to be made if the Servicer determines,
based upon an Opinion of Counsel, that the REMIC status of either REMIC has been
lost or that a substantial risk exists that such REMIC status will be lost for
the then-current taxable year. After a Terminating Purchase, the Termination
Price shall be applied to pay previously unreimbursed Advances and
administrative expenses of the Trust and to make final distributions on the
Certificates as described in the Pooling and Servicing Agreement, and thereafter
any remaining assets of the Trust shall be released to the Holders of the
Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW YORK.
It is expressly understood and agreed by the holder hereto that (a)
this Certificate is executed and delivered by Harris Trust and Savings Bank, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the powers and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by Harris
Trust and Savings Bank, but are made and intended for the purposes of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Harris Trust and Savings Bank, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the holder hereto and by any
<PAGE> 94
person claiming by, through or under such holder, and (d) under no circumstances
shall Harris Trust and Savings Bank be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Certificate.
<PAGE> 95
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
on behalf of BCMSC Trust 1998-A.
Dated: JANUARY 23, 1998 BCMSC TRUST 1998-A
By: HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
BY: ____________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________
AUTHORIZED OFFICER
<PAGE> 96
Schedule I
ASSET SCHEDULE
On file with the Servicer.
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
STANDARD TERMS
TO
POOLING AND SERVICING AGREEMENT
----------
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
PASS-THROUGH CERTIFICATES
JANUARY 1998 EDITION
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C>
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
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C>
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
</TABLE>
(iii)
<PAGE> 5
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)
<PAGE> 6
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 Buy-Down 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 Date) less the amounts, if any,
applied on such preceding
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<PAGE> 9
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 in connection with such purchase or loan, (C)
granted a security interest in such
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<PAGE> 10
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.
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
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<PAGE> 11
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 Contract,
(11) the original principal balance of each Contract and (12) any other
information specified in the related Pooling and Servicing Agreement.
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"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 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
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<PAGE> 13
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 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)
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<PAGE> 14
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": An 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 on or before the
Business Day immediately preceding the next Distribution
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<PAGE> 15
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.
"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.
"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.
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"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 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.
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"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.
"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.
"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
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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.
"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
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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 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.
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"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.
"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.
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"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.
"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.
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"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.
(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.
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"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.
"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. Section 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
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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.
"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.
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"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 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
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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
(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.
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"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.
"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.
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"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 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).
"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.
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"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.
"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 Majority": At any time, the Holders of a majority (by
Percentage Interests) of the Residual Certificates.
"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.
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"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 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.
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"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 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.
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"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.
"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.
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"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.
"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
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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.
"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.
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"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.
"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
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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 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
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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 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.
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(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." Each financing statement shall bear a
statement on the face thereof indicating that the parties intend the
financing statement to evidence a true sale of chattel paper, but that
if the transaction is recharacterized as a loan from the Trust to the
Seller or as involving a loan from the Trust to the Company or from
the Company to the Seller, the financing statement is to perfect the
Trust's security interest in the chattel paper. The Servicer shall
cause to be filed all necessary continuation statements for each of
the aforementioned UCC-1 financing statements. Within one week after
the Closing Date, the Servicer will stamp the face of each Contract
with the following legend (with the name of the Trustee filled into
each blank): "This Contract has been assigned
to________________________________, as Trustee on behalf of the Trust,
as defined in and pursuant to a Pooling and Servicing Agreement among
Bombardier Capital Mortgage Securitization Corporation, Bombardier
Capital Inc. and____________________________________ ______."
(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.
(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
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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.
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.
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(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;
(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;
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(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 include any assumption agreement,
modification agreement, written assurance 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
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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 recorded with respect to all Mortgages not
later than one-hundred twenty (120) calendar days following the
Closing Date, which recordation shall be an expense of the Company.
For each Mortgage for which an Assignment of Mortgage is not duly and
timely recorded as provided above, the 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.
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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
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
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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 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)
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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 manufactured home, a perfected first-priority
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
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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 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
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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 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.
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(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
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
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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 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
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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 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.
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(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.
(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.
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(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]
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
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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 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
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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
to the Trustee 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 to the Trustee, 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 deposit into the Distribution
Account. 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 transfer such amount from the Certificate Account to the Distribution
Account 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 deposit into the Distribution Account 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 deposit into the
Distribution Account.
(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
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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.
(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
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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 22 months after its acquisition by the Trust pursuant
to the 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 22-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 22-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 two years 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 22-month
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 22-month period for disposing of any Repo Property
or REO Property as described in the preceding two sentences shall be an
eleven-month
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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 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
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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:
(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;
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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.
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
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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.
(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
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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 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
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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 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
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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.
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
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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.
(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.
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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,
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
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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 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, (iii) delinquent three months (i.e., 90 days or longer) as of
the end of the related Prepayment Period and (iv) as to which
repossession, foreclosure or other comparable proceedings have been
commenced 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
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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
(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
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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.
The Trustee shall establish and maintain a Distribution Account for
the benefit of the Certificateholders and shall deposit therein funds received
with respect to the Remittance Amount for each Distribution Date immediately
upon receipt thereof from the Servicer in accordance with Section 3.07(b)
hereof. 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 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 such amounts 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 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 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;
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(4) to refund any overpayment of a Repurchase Price for
an Asset pursuant to Section 2.06(f) hereof; and
(5) to 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 (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
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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.
(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.
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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 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
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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 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 Book-Entry 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
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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.
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.
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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 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
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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) 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
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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 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.
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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.
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
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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 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.
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(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
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
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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.
(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.
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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.
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.
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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.
(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
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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 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.
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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, 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 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 applicable 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
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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.
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
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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 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
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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.
(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
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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 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
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(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 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
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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.
(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
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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.
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.
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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 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, or the performance of any of the Trustee's duties under the Pooling
and Servicing Agreement 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
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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.
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.
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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.
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-
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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 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,
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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, 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.
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(b) Unless otherwise provided in the Pooling and Servicing
Agreement, the Servicer or the Holders of the majority of the Percentage
Interest in the Residual Certificates of a REMIC (or, in the case of a double
REMIC Series, the Pooling REMIC) (the "Residual Majority") may, at their
respective options, 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 10% of the sum of the
original Certificate Principal Balances of the Certificates.
(c) The Servicer or the Residual Majority 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.
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
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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.
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.
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(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.
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
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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.
(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,
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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 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;
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<PAGE> 102
(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.
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.
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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 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.
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<PAGE> 104
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.
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
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<PAGE> 105
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.
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
-100-
<PAGE> 106
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.
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
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;
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<PAGE> 107
(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.
(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.
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<PAGE> 108
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 (January 1998 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
<PAGE> 109
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, 19___, among Bombardier Capital Mortgage
Securitization Corporation, Bombardier Capital Inc., as
Servicer, and __________________________, as Trustee,
Pass-Through Certificates, _______________________________
BCMSC Trust 19 _________ - ____________.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to
Pooling and Servicing Agreement (January 1998 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
<PAGE> 110
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
<PAGE> 111
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, 19__,
among Bombardier Capital Mortgage Securitization Corporation,
Bombardier Capital Inc., as Servicer, and _________________,
as Trustee, Pass-Through Certificates, ______________________
BCMSC Trust 19 ________ - ________.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to
Pooling and Servicing Agreement (January 1998 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
<PAGE> 112
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
<PAGE> 113
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, 19__,
among Bombardier Capital Mortgage Securitization Corporation,
Bombardier Capital Inc., as Servicer, and ______________, as
Trustee, Pass-Through Certificates, _____________________________
BCMSC Trust 19 _________-______________________________.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to
Pooling and Servicing Agreement (January 1998 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:
<TABLE>
<S> <C>
MORTGAGE LOANS DOCUMENTS NOT RECEIVED
- -------------- ------------------------------------------------------
ORIGINAL RECORDED ASSIGNMENT OF
MORTGAGE MORTGAGE
OR CERTIFIED COPY OR CERTIFIED COPY
BCI LOAN NUMBER THEREOF THEREOF*
- --------------- ----------------- -----------------
</TABLE>
[TRUSTEE]
as Trustee
By:
-----------------------------------
Its:
----------------------------------
__________________________________
* NOT REQUIRED FOR MORTGAGE LOANS FOR WHICH THE COMPANY HAS WAIVED RECORDATION
OF ASSIGNMENTS.
Exhibit 3 - Page 1
<PAGE> 114
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, 19____ 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 1998 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
<PAGE> 115
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
<PAGE> 116
EXHIBIT 5
RULE 144A AGREEMENT--QIB CERTIFICATION
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION, SERIES 19__-__
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.
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
Exhibit 5 - Page 1
<PAGE> 117
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, 19___, which incorporates by
reference the Standard Terms thereto (January 1998 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
<PAGE> 118
ANNEX AI 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 worth of at least
$25,000,000 as demonstrated in
Exhibit 5 - Page 3
<PAGE> 119
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 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
Exhibit 5 - Page 4
<PAGE> 120
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.
<TABLE>
<S> <C> <C> <C>
6. Will the Transferee be purchasing __________ ________
the Purchased Certificates only YES NO
for the Transferee's own account?
</TABLE>
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
______________________,19______.
-------------------------------------
Print Name of Transferee
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
Exhibit 5 - Page 5
<PAGE> 121
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
<PAGE> 122
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 _
_________________________, 19______.
----------------------------------------
Print Name of Transferee or
Adviser
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
IF AN ADVISER:
-----------------------------------------
Print Name of Transferee
Date:
---------------------
Exhibit 5 - Page 7
<PAGE> 123
EXHIBIT 6
FORM OF TRANSFEREE AGREEMENT
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION, SERIES 19____-____
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 19____-____ 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 Company's Standard Terms to Pooling and Servicing
Agreement (January 1998
Exhibit 6 - Page 1
<PAGE> 124
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
<PAGE> 125
(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
<PAGE> 126
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Certification and Agreement to be validly executed by its duly authorized
representative this ______ day of _________________, 19____.
-----------------------------------------
-----------------------------------------
By:
--------------------------------------
Its:
------------------------------------
Exhibit 6 - Page 4
<PAGE> 127
ANNEX A TO EXHIBIT 6
ATTACH COPY OF SECTION 5.05 OF THE
STANDARD TERMS TO POOLING AND SERVICING AGREEMENT
Exhibit 6 - Page 5
<PAGE> 128
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. Section
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 account's reserves and liabilities
for all contracts held by or on
Exhibit 7 - Page 1
<PAGE> 129
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 (January 1998 Edition), among the
Company, Bombardier Capital Inc., and
__________________________________________________, as Trustee.
Exhibit 7 - Page 2
<PAGE> 130
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
duly executed on its behalf, by its duly authorized officer this ____ day of
_______________________, 19_____.
-----------------------------------------
[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
<PAGE> 131
EXHIBIT 8
FORM OF RESIDUAL TRANSFEREE AGREEMENT
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION, SERIES 19____-_______
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
19____-_____, 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
___________________________,19_____ (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 1998
Edition (the "Standard Terms" and, collectively with the Series Agreement, the
"Agreement"). In doing so the Transferee hereby acknowledges and agrees as
follows:
Exhibit 8 - Page 1
<PAGE> 132
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
wherewithal 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:
*(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
__________________________________
*These representations and covenants are to be deleted if the Residual
Securities are not Private Securities.
Exhibit 8 - Page 2
<PAGE> 133
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 an Opinion of Counsel obtained at its own expense to the effect
Exhibit 8 - Page 3
<PAGE> 134
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 Transferee further understands that neither the
Company, the Servicer nor the Trust
Exhibit 8 - Page 4
<PAGE> 135
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
<PAGE> 136
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
<PAGE> 137
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
Exhibit 8-A - Page 2
<PAGE> 138
Agent has received from 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
__________________________, 19_____, which incorporates by reference the
Standard Terms thereto (January 1998 Edition), among the Company, Bombardier
Capital Inc., and ______________________________________, as Trustee.
Exhibit 8-A - Page 3
<PAGE> 139
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 ______________________, 19____.
----------------------------------------
[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
___________________, 19___.
______________________________________________________
Notary Public
My commission expires the _________ day of____________________, 19____.
Exhibit 8-A - Page 4
<PAGE> 140
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").
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
Exhibit 8-B - Page 1
<PAGE> 141
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.
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 ________________________, 19_____, which incorporates by
reference the Standard Terms thereto (January 1998 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
__________________________, 19_____.
-----------------------------------------
[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.
Exhibit 8-B - Page 2
<PAGE> 142
Subscribed and sworn before me this ___________ day of_________, 19___.
-------------------------------------
Notary Public
My commission expires the _________ day of____________________, 19____.
Exhibit 8-B - Page 3
<PAGE> 143
EXHIBIT 9
FORM OF POWER OF ATTORNEY
Bombardier Capital Inc. (the "Seller"), pursuant to the Pooling and
Servicing Agreement, dated as of ________________________________ _, 19______,
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 (January 1998 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
<PAGE> 1
EXHIBIT 99
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION
CORPORATION
------------------------------------
PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
------------------------------------
JANUARY 1998
<PAGE> 2
Bombardier Capital Mortgage Securitization Corporation, a Vermont
corporation (the "Company"), proposes to sell Pass-Through Certificates
("Certificates") in various series (each a "Series"), in one or more offerings
on terms to be determined at the time of sale, each to be issued by a separate
trust (a "Trust") under a pooling and servicing agreement for such Series that
incorporates by reference standard terms (such agreement collectively with such
standard terms, the "Pooling and Servicing Agreement"), among the Company,
Bombardier Capital Inc. ("BCI"), a Massachusetts corporation, as servicer (in
such capacity, the "Servicer"), and the trustee named therein (the "Trustee").
The certificates of each Series (the "Certificates") will represent in the
aggregate the entire beneficial ownership interest in a segregated pool of
manufactured housing installment sales contracts and manufactured housing
installment sales agreements ("Contracts") secured by units of manufactured
housing ("Manufactured Homes") and/or mortgage loans ("Mortgage Loans" and,
collectively with Contracts, "Assets") secured by first liens on real estate to
which the related Manufactured Homes are deemed permanently affixed ("Mortgaged
Properties").
The Trustee may make one or more elections to have the assets of the
Trust or portions thereof treated as real estate mortgage investment conduits
(each, a "REMIC") under the Internal Revenue Code of 1986, as amended (the
"Code"). In the event that more than one REMIC is created for a Series, all
references herein to a REMIC shall be deemed to refer to all related REMICs,
unless the context otherwise requires.
The Company will sell, assign and transfer the Assets acquired by it to
the related Trust, all in exchange for the Certificates of the related Series
issued by that Trust. The Assets will have been acquired by the Company from BCI
or from one or more sellers (each, in such capacity, a "Seller"), in each case
pursuant to a sales agreement (each, a "Sales Agreement") between the Company
and the Seller of such Assets. The net proceeds to the Company from the sale of
each Series of the Certificates principally will be used to pay the purchase
price of the Assets acquired for the related Trust.
The Certificates are more fully described in the Registration Statement
(as hereinafter defined). Each Series of Certificates, and any classes of
Certificates within each Series, may vary, among other things, as to number and
types of classes, aggregate principal amount, final stated distribution dates,
the rate or rates of interest accruing thereon, and the allocation, priority and
timing of distributions thereon.
From time to time, the Company may enter into one or more terms
agreements (each, a "Terms Agreement") substantially in the form of the Form of
Terms Agreement attached hereto as Exhibit A, which Terms Agreements provide for
the sale of all or a portion of certain classes of a Series of Certificates
(such certificates to be so purchased being herein collectively referred to as
the "Underwritten Certificates") to the underwriters named in the related
underwriting agreement (the "Underwriters"). The standard provisions set forth
herein are to be incorporated by reference in any such Terms Agreement. A Terms
Agreement, including the provisions hereof incorporated therein by reference, is
herein referred to as an "Underwriting Agreement" or an "Agreement." Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings assigned to them in the Terms Agreement into which the standard
provisions are incorporated and if not defined therein shall have the meanings
assigned to them in the related Pooling and Servicing Agreement.
The Terms Agreement relating to each offering of Underwritten
Certificates shall specify, among other things, the principal amount of the
Underwritten Certificates to be issued and their terms not otherwise specified
in the related Pooling and Servicing Agreement, the price or prices at which the
Underwritten Certificates are to be purchased by the Underwriters from the
Company, the initial public offering price or the method by which the price at
which such Underwritten Certificates are to be sold will be determined, the
names of the firm(s), if any, designated as representative(s) of the
Underwriters (the "Representatives"), and the principal amount of the
Underwritten Certificates to be purchased by each Underwriter, and shall set
forth the date, time and manner of delivery of the Underwritten Certificates and
payment therefor.
The Company is a limited-purpose finance corporation and a wholly-owned
subsidiary of BCI, which in turn, is an indirect wholly-owned subsidiary of
Bombardier Inc., a Canadian corporation.
-1-
<PAGE> 3
1. Representations and Warranties. (a) The Company and BCI, jointly
and severally, represent and warrant to, and agree with, each Underwriter that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 for
the registration of the Underwritten Certificates under the Securities
Act of 1933, as amended (the "Act"), which registration statement has
become effective, and has filed such amendments thereto as may have been
required to the date hereof. Such registration statement, as amended at
the date hereof, meets the requirements set forth in Rule 415 under the
Act and complies in all material respects with the Act and the rules and
regulations thereunder. The Company proposes to file with the Commission
pursuant to Rule 424 under the Act a supplement to the form of
prospectus included in such registration statement relating to the
Underwritten Certificates and the plan of distribution thereof. Such
registration statement, including the exhibits thereto, as amended at
the date hereof, is hereinafter called the "Registration Statement;" the
latter of such prospectus in the form in which it appears in the
Registration Statement or in the form most recently revised and filed
with the Commission pursuant to Rule 424 is hereinafter called the
"Basic Prospectus;" and the form of prospectus supplement specifically
relating to the Underwritten Certificates, in the form in which it shall
be first filed with the Commission pursuant to Rule 424 (including the
Basic Prospectus as so supplemented and the information, if any, filed
with the Commission pursuant to the Exchange Act and incorporated by
reference therein) is hereinafter called the "Final Prospectus." Any
preliminary form of the Final Prospectus which has heretofore been filed
pursuant to Rule 424 or, prior to the effective date of the Registration
Statement, pursuant to Rule 402(a), 424(a) or 430A, is hereinafter
called a "Preliminary Final Prospectus." Any supplement to the Basic
Prospectus specifically relating to the Underwritten Certificates shall
be referred to by itself as the "Prospectus Supplement."
(ii) As of the date of this Agreement, when the Final Prospectus
is first filed pursuant to Rule 424 under the Act, when, prior to the
Closing Date (as hereinafter defined), any amendment to the Registration
Statement becomes effective, when any supplement to the Final Prospectus
is filed with the Commission, and at the Closing Date, (A) the
Registration Statement, as amended as of any such time, and the Final
Prospectus, as amended or supplemented as of any such time, complies and
will comply in all material respects with the applicable requirements of
the Act and the rules and regulations thereunder and (B) the
Registration Statement, as amended as of any such time, does not contain
and will not contain any untrue statement of a material fact and does
not omit and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein
not misleading and the Final Prospectus, as amended or supplemented as
of any such time, does not and will not include an untrue statement of a
material fact and does not omit and will not omit to state a material
fact necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration Statement
or the Final Prospectus or any amendment thereof or supplement thereto
in reliance upon and in conformity with (i) the Underwriters'
Information (as defined in the related Terms Agreement) or (ii) other
than with respect to any Asset Pool Information (if so defined in the
related Terms Agreement), any Collateral Term Sheet, Structural Term
Sheet, Series Term Sheet or Computational Materials (each as defined in
Section 5(b)(vi) below).
(iii) The documents incorporated by reference in the Registration
Statement and the Final Prospectus, at the time they were or hereafter
are filed with the Commission, complied, and will comply, in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
of the Commission thereunder.
(iv) As of the date of this Agreement, when the Final Prospectus
is first filed pursuant to Rule 424 under the Act, when, prior to the
Closing Date, any amendment to the Registration
-2-
<PAGE> 4
Statement becomes effective, when any supplement to the Final Prospectus
is filed with the Commission, and at the Closing Date, there has not and
will not have been (A) any request by the Commission for any further
amendment of the Registration Statement or the Final Prospectus or for
any additional information, (B) any issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threat of any proceeding for that purpose, or (C) any
notification with respect to the suspension of the qualification of the
Underwritten Certificates for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose.
(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Vermont with full power and authority (corporate and other) to own,
lease and operate its properties and to conduct its business as it is
now conducted and as described in the Final Prospectus, and to enter
into and perform its obligations under the Agreement, each related Sales
Agreement and the related Pooling and Servicing Agreement, and has
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the character of
the business transacted by it or properties owned or leased by it
requires such qualification, except where the failure so to qualify
would not have a material adverse effect on the Company. The Company
holds all material licenses, certificates, franchises, and permits from
all governmental authorities necessary for the conduct of its business
as it is now conducted and as described in the Final Prospectus or as is
necessary for the performance of its obligations under any related Sales
Agreement or related Pooling and Servicing Agreement, and has 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 Company.
(vi) The Company is not in violation of its articles of
incorporation or bylaws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, deed of trust, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by which it or
its properties may be bound, which default might result in any material
adverse change in the financial condition, earnings, affairs or business
of the Company or which might materially and adversely affect the
properties or assets thereof or the ability to perform its obligations
under the Agreement, each related Sales Agreement, and the related
Pooling and Servicing Agreement.
(vii) The execution of the Terms Agreement, each related Sales
Agreement and the related Pooling and Servicing Agreement are within the
corporate power of the Company. The Agreement has been, and as of the
Closing Date the related Pooling and Servicing Agreement and each
related Sales Agreement will have been, duly and validly authorized,
executed and delivered by the Company, and assuming the valid
authorization, execution and delivery by the other parties thereto, each
constitutes, or will constitute, a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is sought
in a proceeding in equity or at law, and except that with respect to the
Agreement the provisions relating to indemnification of the Underwriters
may be unenforceable as against public policy.
(viii) Neither the issuance and sale of the Underwritten
Certificates, nor the execution and delivery by the Company of the
Agreement, any related Sales Agreement or the related Pooling and
Servicing Agreement, nor the consummation by the Company of any of the
transactions herein or therein contemplated, nor compliance by the
Company with the provisions hereof or thereof, will (A) conflict with or
result in a breach of, or 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
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<PAGE> 5
any judgment, decree or order binding on the Company or any of 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 (B) result in the creation or imposition of any
lien, charge, or encumbrance upon any of its properties pursuant to the
terms of any such indenture, mortgage, deed of trust, contract or other
instrument.
(ix) No filing or registration with, notice to, qualification of
or with, or consent, approval, authorization or order or other action of
any person, corporation or other organization or of any court,
supervisory or governmental authority or agency is required for the
consummation by the Company of the transactions contemplated by this
Agreement or the related Pooling and Servicing Agreement except such as
have been, or will have been prior to the Closing Date, obtained under
the Act, or state securities laws or "Blue Sky" laws, or any
recordations of the assignment of the related Mortgage Loans, if any, to
the Trustee pursuant to the related Pooling and Servicing Agreement that
have not yet been completed.
(x) There are no actions, suits or proceedings against, or
investigations of, the Company pending, or, to the knowledge of the
Company, threatened, before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement, the related
Pooling and Servicing Agreement, any related Sales Agreement or the
Certificates of the related Series, (B) seeking to prevent the issuance
of the Certificates of the related Series or the consummation of any of
the transactions contemplated by the Agreement, any related Sales
Agreement or the related Pooling and Servicing Agreement, (C) which
might materially and adversely affect the business, operations,
financial condition (including, if applicable, on a consolidated basis),
properties or assets of the Company, performance by the Company of its
obligations under, or the validity or enforceability of, the Agreement,
the related Pooling and Servicing Agreement, any related Sales
Agreement, or the validity or enforceability of the Certificates of the
related Series or (D) seeking to affect adversely the federal or state
income tax attributes of the Underwritten Certificates as described in
the Final Prospectus.
(xi) Since the respective dates as of which information is given
in the Registration Statement and the Final Prospectus, there has not
been any material adverse change or development involving a prospective
material adverse change in the business, operations, financial
condition, properties or assets of the Company.
(xii) The Underwritten Certificates and Pooling and Servicing
Agreement will conform in all material respects to the descriptions
thereof contained in the Final Prospectus, and the Underwritten
Certificates, when duly and validly executed and authenticated by the
Trustee and delivered to and paid for by the Underwriters as provided
herein, will be validly issued and entitled to the benefits of the
related Pooling and Servicing Agreement.
(xiii) At the time of execution of the related Pooling and
Servicing Agreement, the Company will own the Assets being transferred
to the Trustee pursuant to the related Pooling and Servicing Agreement,
free and clear of any lien, adverse claim, mortgage, charge, pledge or
other encumbrance or security interest, and will not have assigned to
any other person any of its right, title or interest in such Assets,
and, upon the execution of the related Pooling and Servicing Agreement,
the Company will have transferred all its right, title and interest in
such Assets to the Trustee, provided that the Company will not be deemed
to be in breach of this representation and warranty to the extent that a
court of competent jurisdiction holds that at the time of the execution
of the related Pooling and Servicing Agreement the Company had a first
priority perfected security interest in such Assets or that the Company
granted to the Trust a first priority perfected security interest in
such Assets.
(xiv) Under generally accepted accounting principles, the Company
will report its transfer
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<PAGE> 6
of the Assets to the Trustee pursuant to the related Pooling and
Servicing Agreement and the sale of the Certificates of the related
Series as a sale of its interest in such Assets. The Company has been
advised by its independent certified public accountants that it concurs
with such treatment under generally accepted accounting principles. For
federal income tax purposes, the Company will treat the transfer of the
Assets to the Trustee and the sale of the Underwritten Certificates
either as a transaction in which it acts as the agent of one or more
Sellers or as a sale of its interest in the Assets.
(xv) As of the Closing Date, the Assets will be duly and validly
assigned to the Trustee or its nominee, UCC-1 financing statements
describing any Contracts as collateral and (i) naming the Seller as
"debtor," the Company as "secured party" and the Trustee as "assignee"
and (ii) naming the Company as "debtor" and the Trustee as "secured
party," will be filed in all filing offices where such filing is
necessary to perfect the Trustee's ownership or security interest in any
related Contracts, and any related Mortgage Notes will be endorsed
without recourse to the Trustee or to its nominee and delivered to the
Trustee or to an agent on its behalf and, where required in order to
transfer all right, title and interest to a Mortgage Loan. Upon
completion of the aforementioned actions, upon the stamping of the face
of each related Contract with a legend giving notice of the assignment
of such Contract to the Trustee, and, where required in order to
transfer a lien on a Mortgaged Property, upon the recordation of
assignments to the Trustee of any related Mortgages in the public
records in which such Mortgages shall have been recorded (which
recordation shall be effected unless the Underwriters receive an opinion
of counsel satisfactory to them (at the Company's expense) that such
recording is not required under applicable law to perfect the Trustee's
security interest in the related Mortgaged Property), the Trustee will
own each related Asset, subject to no prior lien, mortgage, security
interest, pledge, charge or other encumbrance, except as permitted under
the related Pooling and Servicing Agreement.
(xvi) As of the Closing Date, any letter of credit or surety bond
included in any accounts or funds constituting part of the Trust with
respect to the Underwritten Certificates will name the Trustee as the
beneficiary thereof and will be delivered to the Trustee, any cash will
be delivered to the Trustee and any Eligible Investments (as defined in
the related Pooling and Servicing Agreement) will be made in the
Trustee's name, and delivered to and/or assigned to the Trustee, and the
Trustee either will own such assets, or have a first priority perfected
security interest therein, in either case subject to no prior lien,
security interest, pledge, charge or other encumbrance.
(xvii) At the Closing Date, each Contract, Mortgage Note and
Mortgage will meet the criteria for selection described in the Final
Prospectus.
(xviii)At the Closing Date, any Primary Mortgage Insurance
Policies and Standard Hazard Insurance Policies (as such terms are
defined in the related Pooling and Servicing Agreement) that are
required to be maintained with respect to any of the related Assets
pursuant to the related Pooling and Servicing Agreement will have been
duly and validly authorized, executed and delivered by, and will
constitute legal, valid and binding obligations of the issuers of such
Primary Mortgage Insurance Policies and Standard Hazard Insurance
Policies (collectively, the "Insurers"), as the case may be, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general principles of
equity, regardless of whether enforcement is sought in a proceeding in
equity or at law.
(xix) Except as otherwise provided in the related Terms
Agreement, each Class of the Underwritten Certificates so described in
the Final Prospectus, when issued, will constitute a "mortgage related
security" as such term is defined in Section 3(a)(41) of the Exchange
Act for so long as such Certificate is rated in one of the two highest
rating categories by a nationally recognized statistical rating
organization.
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<PAGE> 7
(xx) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of this Agreement and the
related Pooling and Servicing Agreement and the execution, delivery and
sale of the Underwritten Certificates have been or will be paid at or
prior to the Closing Date.
(xxi) Neither the Company nor the Trust is, and the issuance and
sale of the Underwritten Certificates in the manner contemplated by the
Final Prospectus will not cause the Company or the Trust to become,
subject to registration or regulation as an "investment company" or an
affiliate of an "investment company" under (and as defined in) the
Investment Company Act of 1940, as amended (the "Investment Company
Act").
(xxii) Immediately prior to the delivery of the Underwritten
Certificates to the Underwriters, the Company will own the Underwritten
Certificates free and clear of any lien, adverse claim, pledge,
encumbrance or other security interest, and will not have assigned to
any person any of its right, title or interest in the Underwritten
Certificates, and, upon consummation of the transactions contemplated in
this Agreement, the Company will have transferred all its right, title
and interest in the Underwritten Certificates to the Underwriters.
(xxiii)The chief executive office of the Company is listed
opposite its name on Schedule I hereto, which office is the place where
it is "located" for the purposes of Section 9-103(3)(d) of the Uniform
Commercial Code as in effect in the State of New York, and the offices
of the Company where it keeps its records concerning the Assets are also
listed in said Schedule opposite its name and there has been no other
such location during the four months preceding the Closing Date.
(b) BCI further represents and warrants to, and agrees with, each
Underwriter that:
(i) BCI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Massachusetts with full power and authority (corporate and other) to own
its properties and conduct its business as it is now conducted by BCI,
and has qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the character of
the business transacted by it or properties owned or leased by it
requires such qualification except when the failure to so qualify would
not have a material adverse effect on BCI. BCI holds all material
licenses, certificates, franchises, and permits from all governmental
authorities necessary for the conduct of its business as it is now
conducted and as described in the Final Prospectus or as is necessary
for the performance of its obligations under any related Sales Agreement
or related Pooling and Servicing Agreement, and has 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 BCI.
(ii) The execution of the Agreement, the related Sales Agreement
and the related Pooling and Servicing Agreement are within the corporate
power of BCI. This Agreement has been, and as of the Closing Date the
related Sales Agreement and the related Pooling and Servicing Agreement
will have been, duly and validly authorized, executed and delivered by
BCI, and assuming the valid authorization, execution and delivery of
each such agreement by the other parties thereto, each of such
agreements constitutes a legal, valid and binding obligation of BCI,
enforceable against BCI in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is sought in a proceeding
in equity or at law, and except that the provisions relating to
indemnification of the Underwriters may be unenforceable as against
public policy.
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<PAGE> 8
(iii) BCI is not in violation of its articles of incorporation or
bylaws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
deed of trust, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may
be bound, which default might result in any material adverse change in
the financial condition, earnings, affairs or business of BCI or which
might materially and adversely affect the properties or assets thereof
or the ability to perform its obligations under the Agreement, each
related Sales Agreement, and the related Pooling and Servicing
Agreement.
(iv) Neither the execution and delivery by BCI of this Agreement,
any related Sales Agreement or the related Pooling and Servicing
Agreement, nor the consummation by BCI of any of the transactions herein
or therein contemplated, nor compliance by BCI with the provisions
hereof or thereof, will (A) conflict with or result in a breach of, or
constitute a default under, any of the provisions of the articles of
incorporation or bylaws of BCI or any law, governmental rule or
regulation or any judgment, decree or order binding on BCI or any of its
properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which BCI is a party or by which
it is bound, or (B) result in the creation of any lien, charge, or
encumbrance upon any of its properties pursuant to the terms of any such
indenture, mortgage, deed of trust, contract or other instrument.
(v) There are no actions, suits or proceedings against, or
investigations of, BCI pending, or, to the knowledge of BCI, threatened,
before any court, administrative agency or other tribunal (i) asserting
the invalidity of the Agreement, the related Pooling and Servicing
Agreement or any related Sales Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by the Agreement or
any related Sales Agreement or the related Pooling and Servicing
Agreement, (iii) which might materially and adversely affect the
business, operations, financial condition (including, if applicable, on
a consolidated basis), properties or assets of BCI, performance by BCI
of its obligations under, or the validity or enforceability of, the
Agreement, the related Pooling and Servicing Agreement or any related
Sales Agreement or (iv) seeking to affect adversely the federal or state
income tax attributes of the Underwritten Certificates as described in
the Final Prospectus.
(vi) No filing or registration with, notice to, qualification of
or with, or consent, approval, authorization or order or other action of
any person, corporation or other organization or of any court,
supervisory or governmental authority or agency is required for the
consummation by BCI of the transactions contemplated by this Agreement
or the related Pooling and Servicing Agreement except such as have been,
or will have been prior to the Closing Date, obtained under the Act, or
state securities laws or "Blue Sky" laws, or from the National
Association of Securities Dealers, Inc. in connection with the purchase
and distribution of the Underwritten Certificates by the Underwriters,
or any recordations of the assignment of the related Mortgage Loans to
the Trustee pursuant to the related Pooling and Servicing Agreement that
have not yet been completed.
(vii) At the time of execution of the related Sales Agreement,
BCI will own the Assets being transferred to the Company pursuant to the
related Sales Agreement, free and clear of any lien, adverse claim,
mortgage, charge, pledge or other encumbrance or security interest, and
will not have assigned to any other person any of its right, title or
interest in such Assets, and, upon the execution of the related Sales
Agreement, BCI will have transferred all its right, title and interest
in such Assets to the Company, provided that BCI will not be deemed to
be in breach of this representation and warranty to the extent that a
court of competent jurisdiction holds that at the time of the execution
of the related Sales Agreement BCI had a first priority perfected
security interest in such Assets or that BCI granted to the Company a
first priority perfected security interest in such Assets.
(viii) Under generally accepted accounting principles, BCI will
report its transfer of the
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<PAGE> 9
Assets pursuant to its Sales Agreement as a sale of its interest in such
Assets. BCI has been advised by its independent certified public
accountants that they concur with such treatment under generally
accepted accounting principles and, if applicable, regulatory accounting
principles. BCI also will so report the transfer in all financial
statements and reports to the regulatory and supervisory agencies and
authorities to which it reports, if any. For federal income tax
purposes, BCI will treat the transfer of the Assets pursuant to the
related Sales Agreement as a sale of the interest in the Assets
represented by the Certificates of the related Series not held by BCI
and as an exchange of the remaining interest in the Assets for any
Certificates of such Series retained by BCI.
(ix) The chief executive office of BCI is listed opposite its
name on Schedule I hereto, which office is the place where it is
"located" for the purposes of Section 9-103(3)(d) of the Uniform
Commercial Code as in effect in the State of New York, and the offices
of BCI where it keeps its records concerning the Assets are also listed
in said Schedule opposite its name and there has been no other such
location during the four months preceding the Closing Date.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein,
the Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the applicable
purchase prices set forth in the related Terms Agreement (plus accrued interest
as therein set forth), Underwritten Certificates representing the respective
aggregate approximate principal amounts, notional amounts or percentage
interests, as the case may be, of the various classes of Underwritten
Certificates set forth in the Terms Agreement or opposite such Underwriter's
name in an attachment to the Terms Agreement.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Certificates shall be made at the office, on the date and at the time specified
in the related Terms Agreement, which date and time may be postponed by
agreement between the Underwriters and the Company or as provided in Section 10
hereof (such date and time of delivery and payment for the Underwritten
Certificates being herein called the "Closing Date"). Delivery of the
Underwritten Certificates shall be made to the Underwriters against payment by
the Underwriters of the purchase price thereof to or upon the order of the
Company in the type of funds specified in the Terms Agreement. The Underwritten
Certificates shall be registered in such names and in such authorized
denominations as the Underwriters may request in writing not less than two full
business days in advance of the Closing Date.
The Company agrees to have the Underwritten Certificates available for
inspection, checking and packaging by the Underwriters in New York, New York (or
such other location within the continental United States agreed to by the
Underwriters and the Company), not later than 1:00 p.m. on the business day
prior to the Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Underwritten Certificates of such Series for
sale to the public as set forth in the related Final Prospectus.
5. Agreements. (a) Each of the Company and BCI, jointly and severally,
covenants and agrees with the several Underwriters that:
(i) Substantially contemporaneously with the execution of the
related Terms Agreement, the Company will prepare the supplement to the
Basic Prospectus setting forth the principal amount of Underwritten
Certificates covered thereby and the material terms thereof, the initial
public offering price of the Underwritten Certificates or the manner of
offering such Underwritten Certificates, the price at which the
Underwritten Certificates are to be purchased by the Underwriters from
the Company, the selling concessions and reallowance, if any, and such
other information as the Underwriters and the Company deem appropriate
in connection with the offering of such Underwritten Certificates. The
Company will not file any amendment or supplement to the
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<PAGE> 10
Registration Statement or the Final Prospectus relating to the
Underwritten Certificates unless the Company has furnished the
Underwriters a copy for their review prior to filing and will not file
any such proposed amendment or supplement to which the Underwriters
reasonably object. Subject to the foregoing sentence, the Company will
cause the Final Prospectus to be filed with the Commission pursuant to
Rule 424 under the Act and a report on Form 8-K will be filed with the
Commission within 15 days following the Closing setting forth specific
information concerning the Underwritten Certificates and the related
Assets and including, as an exhibit, a copy of the related Pooling and
Servicing Agreement. In addition, to the extent that any Underwriter (i)
has provided Collateral Term Sheets to the Company that such Underwriter
has provided to a prospective investor, the Company has filed such
Collateral Term Sheets as an Exhibit to Form 8-K within two business
days of its receipt thereof, (ii) has provided Structural Term Sheets or
Computational Materials to the Company that such Underwriter has
provided to a prospective investor, the Company will file or cause to be
filed with the Commission a report on Form 8-K containing such
Structural Term Sheets and Computational Materials, as soon as
reasonably practicable after the date of the Underwriting Agreement, but
in any event, not later than the date on which the Final Prospectus is
filed with the Commission pursuant to Rule 424 under the Act, or (iii)
has provided Series Term Sheets to the Company that such Underwriter has
provided to a prospective investor, the Company has filed such Series
Term Sheets as an Exhibit to Form 8-K within two business days of its
receipt thereof. The Company will promptly advise the Underwriters (A)
when the Final Prospectus shall have been filed with the Commission
pursuant to Rule 424 and the Form 8-K shall have been filed with the
Commission, (B) when any amendment to the Registration Statement shall
have become effective, (C) of any request by the Commission for any
amendment of the Registration Statement or the Final Prospectus or for
any additional information, (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threatening of any proceeding for that purpose, and
(E) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Underwritten Certificates for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or suspension and, if
issued, to obtain the withdrawal thereof as soon as possible.
(ii) If, at any time when a prospectus relating to the
Underwritten Certificates is required to be delivered under the Act, any
event occurs as a result of which, in the opinion of counsel to the
Company or the Underwriters, the Final Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading, or if it shall be necessary to amend or supplement the
Final Prospectus to comply with the Act or the rules and regulations
thereunder, the Company will promptly prepare and file with the
Commission, subject to paragraph (i) of this Section 5, an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance and, if such amendment or supplement is
required to be contained in a post-effective amendment of the
Registration Statement, will use its best efforts to cause such
amendment of the Registration Statement to be made effective as soon as
possible and will promptly file all reports and any definitive proxy or
information statements required to be filed by the Company pursuant to
Sections 13, 14 and 15 of the Exchange Act subsequent to the date of the
Prospectus for so long as the delivery of a Prospectus is required in
connection with the offering or sale of the Underwritten Certificates.
(iii) The Company will furnish to counsel for the Underwriters,
without charge, signed copies of the Registration Statement (including
exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Closing Date, and to each Underwriter a
conformed copy of the Registration Statement (without exhibits thereto)
and each such amendment and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any amendments
thereof and
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<PAGE> 11
supplements thereto as the Underwriters may reasonably request.
(iv) The Company will apply the net proceeds from the sale of the
Underwritten Certificates in the manner set forth in the related Final
Prospectus.
(v) The Company or BCI will pay or cause to be paid all the fees
and disbursements of the Company's and BCI's counsel and of independent
accountants for the Company and BCI relating to legal review, opinions
of counsel for the Company and BCI, audits, review of unaudited
financial statements, cold comfort review or otherwise (except for costs
incurred pursuant to Section 5(b)(v)); the costs and expenses of
printing (or otherwise reproducing) and delivering the Agreement, the
related Pooling and Servicing Agreement, the Underwritten Certificates
and other related transaction documents (including the printing and
delivering of any such documents to the Underwriters in such quantities
as the Underwriters may reasonably request); the initial fees, costs and
expenses of or relating to the Trustee under the related Pooling and
Servicing Agreement and its counsel; the initial fees, costs and
expenses of or relating to any custodian of the Contracts or Mortgage
Loans under a custodial agreement and such custodian's counsel; the
costs and expenses incident to the preparation, printing (including
EDGAR costs), distribution and filing of the Registration Statement
(including exhibits thereto), the Basic Prospectus, the Preliminary
Final Prospectus and the Final Prospectus, and all amendments of and
supplements to the foregoing, any Form 8-Ks relating to any Collateral
Term Sheets, Structural Term Sheets, Computational Materials or Series
Term Sheets, and of the Underwritten Certificates; the fees of The
Depository Trust Company or any successor Clearing Agency, in connection
with the book-entry registration of the Book-Entry Certificates; the
reasonable expenses of the Underwriters, including the reasonable fees
and disbursements of its counsel, in connection with the initial
qualification of the Underwritten Certificates for sale in the
jurisdictions that the Underwriters may designate pursuant to subsection
(vi) below and in connection with the preparation of any blue sky survey
and legal investment survey; and the fees of rating agencies. Except as
provided in Section 7 hereof, the Underwriters shall be responsible for
paying all costs and expenses incurred by them in connection with their
purchase and sale of the Underwritten Certificates.
(vi) The Company will arrange for the qualification of the
Underwritten Certificates for sale under the laws of such jurisdictions
as the Underwriters may designate in the Terms Agreement, will maintain
such qualifications in effect so long as required for the distribution
of the Underwritten Certificates and will arrange for the determination
of the legality of the Underwritten Certificates for purchase by
investors; provided, however, that the Company shall not be required to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
(vii) So long as any Underwritten Certificates are outstanding,
the Company will cause the related Servicer or Trustee to furnish to
each Underwriter, as soon as available, a copy of (A) the annual
statement of compliance delivered by the Servicer to the Trustee under
the related Pooling and Servicing Agreement, (B) the annual independent
public accountants' servicing report furnished to the Trustee pursuant
to the related Pooling and Servicing Agreement, (C) each report,
statement or other document regarding the Underwritten Certificates
filed with the Commission under the Exchange Act or mailed to the
holders of the Underwritten Certificates, pursuant to the related
Pooling and Servicing Agreement or otherwise, (D) any reports provided
by certified public accountants pursuant to the related Pooling and
Servicing Agreement regarding the reports, statements or other documents
included in clause (C) above, and (E) from time to time, such other
information concerning the Underwritten Certificates as any Underwriter
may reasonably request and which may be furnished by the Company or the
Servicer without undue expense.
(viii) On or before the Closing Date, the Company and BCI shall
cause each of their respective books and records (including any computer
records) relating to the Contracts and
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<PAGE> 12
Mortgage Loans to be marked to show the Trust's absolute ownership of
the Assets, and from and after the Closing Date neither the Company nor
BCI, as Servicer, shall take any action inconsistent with the Trust's
ownership of such Assets, other than as permitted by the related Pooling
and Servicing Agreement.
(ix) To the extent, if any, that the ratings provided with
respect to the Underwritten Certificates by any Rating Agency are
conditional upon the furnishing of documents or the taking of any other
actions by the Company or BCI, the Company or BCI, as the case may be,
shall furnish any such documents and take any such other actions as may
be required to satisfy such conditions. A copy of each such document
shall be provided to the Underwriters at the time it is delivered to the
Rating Agencies.
(x) Without the consent of the Underwriters, the Company will not
waive any of the conditions to its obligations to purchase the Assets
pursuant to the related Sales Agreement.
(xi) If a REMIC election is to be made with respect to some or
all of the related Assets ("REMIC Assets"), the Company will make or
cause to be made all filings necessary to establish and maintain the
status of such REMIC Assets as a REMIC.
(b) Each Underwriter represents, warrants, covenants and agrees with the
Company and BCI that:
(i) It either (A) has not provided any potential investor with a
Collateral Term Sheet (that is required to be filed with the Commission
within two business days of first use under the terms of the Public
Securities Association Letter as described below), or (B) has,
substantially contemporaneously with its first delivery of such
Collateral Term Sheet to a potential investor, delivered such Collateral
Term Sheet (in hard copy and EDGAR format) to the Company or its
counsel, which Collateral Term Sheet, if any, is attached to the related
Terms Agreement as Exhibit A.
(ii) It either (A) has not provided any potential investor with a
Structural Term Sheet, Series Term Sheets or Computational Materials, or
(B) has promptly provided any such Structural Term Sheet, Series Term
Sheets or Computational Materials (in hard copy and EDGAR format) to the
Company or its counsel, which Structural Term Sheets, Series Term Sheets
and Computational Materials, if any, are attached to the related Terms
Agreement as Exhibit B.
(iii) Each Collateral Term Sheet bears a legend indicating that
the information contained therein will be superseded by the description
of the collateral contained in the Prospectus Supplement and, except in
the case of the initial Collateral Term Sheet, that such information
supersedes the information in all prior Collateral Term Sheets.
(iv) Each Structural Term Sheet, Series Term Sheet and all
Computational Materials bear a legend substantially as follows (or in
such other form as may be agreed prior to the date of the Underwriting
Agreement):
This information does not constitute either an offer to sell or a
solicitation of an offer to buy any of the securities referred to
herein. Information contained herein is confidential and provided
for information only, does not purport to be complete and should
not be relied upon in connection with any decision to purchase
the securities. This information supersedes any prior versions
hereof and will be deemed to be superseded by any subsequent
versions including, with respect to any description of the
securities or the underlying assets, the information contained in
the final Prospectus and accompanying Prospectus Supplement.
Offers to sell and
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<PAGE> 13
solicitations of offers to buy the securities are made only by
the final Prospectus and the related Prospectus Supplement.
(v) It (at its own expense) agrees to obtain and provide to the
Company one or more accountants' letters in form and substance
reasonably satisfactory to the Underwriter and the Company relating to
the Collateral Term Sheets, Structural Term Sheets, Series Term Sheets
and Computational Materials, which accountants' letters shall be
addressed to the Company.
(vi) It has not, and will not, without the prior written consent
of the Company, provide any Collateral Term Sheets, Structural Term
Sheets, Series Term Sheets or Computational Materials to any investor
after the date of the Agreement, other than as set forth in Exhibit A or
Exhibit B attached to the related Terms Agreement.
For purposes of this Agreement, Series Term Sheets, Collateral
Term Sheets and Structural Term Sheets shall have the respective
meanings assigned to them (a) in the case of Series Term Sheets, in the
no-action letter addressed to Greenwood Trust Company, Discover Card
Master Trust I dated April 5, 1996, and (b) in the case of Collateral
Term Sheets and Structural Term Sheets, in the February 13, 1995 letter
of Cleary, Gottlieb, Steen & Hamilton on behalf of the Public Securities
Association (which letter, and the SEC staff's response thereto, are
publicly available February 17, 1995). The term "Collateral Term Sheet"
as used herein includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented.
Computational Materials has the meaning assigned to it in the no-action
letter dated May 20, 1994 issued by the Division of Corporation Finance
of the Commission to Kidder, Peabody Acceptance Corporation I, Kidder,
Peabody & Co. Incorporated, and Kidder Structured Asset Corporation, the
no-action letter dated May 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities
Association and the no-action letter of February 17, 1995 issued by the
Commission to the Public Securities Association.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters hereunder to purchase the Underwritten Certificates of any
Series to which this Agreement applies shall be subject to the following
conditions:
(a) To the accuracy on the date hereof and on the Closing Date (as if
made on such Closing Date), and as of the date of the effectiveness of any
amendment to the Registration Statement filed prior to the Closing Date, of the
representations and warranties on the part of the Company and BCI contained
herein and to the extent that this Agreement provides that the Company and BCI
are not making certain representations and warranties, to the accuracy of the
representations and warranties provided by the parties making such
representations and warranties as of the date thereof and on the Closing Date
(as if made on such Closing Date) and as of the date of the effectiveness of any
amendment to the Registration Statement filed prior to the Closing Date.
(b) On the Closing Date, the representations and warranties made by each
of the Company and BCI in the related Sales Agreement and the related Pooling
and Servicing Agreement will be true and correct in all material respects.
(c) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and not withdrawn and no proceedings
for that purpose shall have been instituted or threatened; and the Final
Prospectus shall have been filed or mailed for filing with the Commission in
accordance with Rule 424 under the Act, and all actions required to be taken and
all filings required to be made by the Company under the Act prior to the sale
of the Underwritten Certificates shall have been duly taken or made.
(d) Certificates.
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<PAGE> 14
(i) The Company shall have delivered to the Underwriters a
certificate of the Company, signed by the President or any Vice
President or Assistant Vice President of the Company and dated the
Closing Date, to the effect that the signer of such certificate has
carefully examined the Registration Statement, the Final Prospectus, the
Agreement, the related Sales Agreement and the related Pooling and
Servicing Agreement and that: (A) the representations and warranties of
the Company in the Agreement, the related Sales Agreement and the
related Pooling and Servicing Agreement are true and correct in all
material respects at and as of the Closing Date with the same effect as
if made on the Closing Date; (B) the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date; (C) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and (D) nothing has come to such
Officer's attention that would lead him or her to believe that the Final
Prospectus contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not
misleading; and (E) there has been no material adverse change or
development involving a prospective material adverse change in the
business, operations, financial condition, properties or assets of the
Company.
(ii) BCI shall have delivered to the Underwriters a certificate
of BCI, signed by the President or any Vice President or Assistant Vice
President of BCI and dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Agreement, the
related Sales Agreement and the related Pooling and Servicing Agreement
and that: (A) the representations and warranties of BCI in the
Agreement, the related Sales Agreement and the related Pooling and
Servicing Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on the Closing
Date; (B) there has been no material adverse change or development
involving a prospective material adverse change in the business,
operations, financial condition, properties or assets of BCI; and (C)
BCI has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date.
(e) Opinions.
(i) The Underwriters shall have received from Morgan, Lewis &
Bockius LLP, Downs Rachlin & Martin, P.C. and such other counsel
reasonably acceptable to the Underwriters opinions of counsel, each
dated the Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to (A) various matters relating, among other
things, to the corporate status and authorization of the Company and
BCI, substantially in the form of Exhibit B-1 hereto; (B) various
matters relating to the lien of the trustee in the assets, substantially
in the form of Exhibit B-2 hereto; and (C) the applicable federal income
tax treatment of the Certificates.
(ii) The Underwriters shall have received one or more opinions
from local counsel reasonably acceptable to the Underwriters, each dated
the Closing Date satisfactory in form and substance to counsel for the
Underwriters, with respect to the Trustee's first priority perfected
interest in the Manufactured Homes located in those states where 10% or
more of the principal balance of the Contracts and/or Mortgage Loans are
located as of the Cut-off Date.
(iii) The Underwriters shall have received copies of any opinions
of counsel furnished to the Rating Agencies, together with a letter
addressed to the Underwriters to the effect that each Underwriter may
rely on each such opinion to the same extent as though such opinion was
addressed to each Underwriter as of its date, including any opinions
with respect to the non-consolidation of the Company with its affiliates
and the "true sale" of the Assets, or, in the absence of such true sale,
that the Trustee has a perfected security interest in the Assets,
subject to no prior liens or encumbrances.
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<PAGE> 15
(iv) The Underwriters shall have received from reputable counsel
an opinion or opinions of counsel dated the Closing Date and
satisfactory in form and substance to counsel for the Underwriters, as
to the income tax treatment of the Certificates in those states
specified in the Terms Agreement.
(v) The Underwriters shall have received from counsel for the
Underwriters such opinion or opinions, dated the Closing Date, with
respect to the validity of the Certificates and other related matters as
the Underwriters may reasonably require, and the Company and BCI shall
have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(vi) The Company shall have furnished to the Underwriters the
opinions of counsel to each Seller, dated the Closing Date and
satisfactory in form and substance to counsel for the Underwriter, as to
the due authorization, execution and delivery of each of the related
Sales Agreements by the related Seller and its enforceability against
the related Seller.
(vii) The Company shall have furnished to the Underwriters the
opinions of counsel to the Trustee, dated the Closing Date and
satisfactory in form and substance to counsel for the Underwriters, as
to the due authorization, execution and delivery of the Pooling and
Servicing Agreement by the Trustee.
(viii) The Company shall have furnished to the Underwriters the
opinions of counsel to any Insurer or any monoline insurance company
guaranteeing any or all of the payments with respect to one or more
Classes of Certificates, dated the Closing Date and satisfactory in form
and substance to counsel for the Underwriters, as to the due issuance
and enforceability of the policies issued by such Insurer or such
monoline insurance company and covering such other matters as reasonably
requested by the Underwriters.
(f) The Underwritten Certificates shall have been assigned the ratings
set forth in the Terms Agreement, which shall be in one of the four highest
rating categories, by one or more "nationally recognized statistical rating
organizations," as that term is defined by the Commission from time to time,
designated in the Terms Agreement. On the Closing Date, (i) such rating or
ratings shall not have been rescinded and there shall not have been any
downgrading, or public notification of a possible downgrading or public notice
of a possible change, without indication of direction, and (ii) no downgrading,
or public notification of a possible downgrading or public notification of a
possible change, without indication of direction, shall have occurred in the
rating accorded any of the debt securities of any person providing any form of
credit enhancement for the Certificates by any "nationally recognized
statistical rating organization."
(g) The Underwriters shall have received from Ernst & Young LLP,
certified public accountants, two letters, (i) one dated the date of the related
Terms Agreement and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters to the effect that they have performed certain
specified procedures as a result of which they have determined that the Assets
listed in Schedule I to each related Sales Agreement conform with the
description thereof in the Prospectus Supplement under "The Asset Pool" and that
a sampling of the Contract Files relating to the Contracts and of the Trustee
Mortgage Loan Files relating to the Mortgage Loans conforms with the information
contained on the contract and mortgage loan data file tape upon which the
information in the Prospectus Supplement under the caption "The Asset Pool" was
based; and (ii) the other letter dated the Closing Date and satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, reconfirming
or updating the letter dated the date hereof; to the further effect that they
have performed certain procedures as a result of which they have determined that
the Assets listed in Schedule I to the related Pooling and Servicing Agreement
(A) conform with the description thereof in the Prospectus Supplement under the
caption "The Asset Pool" or (B) conform with the information, if any, set forth
in the Company's report on Form 8-K with respect to such Assets; and covering
such other matters relating to the Trust as the Underwriters may reasonably
request.
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<PAGE> 16
(h) The Underwriters shall have received from the certified public
accountants of each Seller or Servicer, as applicable, a letter or letters dated
the date hereof and satisfactory in form and substance to the Underwriters and
counsel to the Underwriters to the effect that they have performed certain
specified procedures as a result of which they determined that certain
information of an accounting, financial and statistical nature set forth in the
Final Prospectus under the caption "Servicing of the Contracts" (or other
caption relating to the Servicer's servicing activities) agrees with the records
of the Servicer.
(i) If applicable, and subject to the conditions set forth in the
related Pooling and Servicing Agreement, any reserve fund to be established for
the benefit of the holders of any related Certificates shall have been
established by the Company with the Trustee and any initial deposit required to
be made therein shall have been delivered to the Trustee for deposit therein as
contemplated by the related Pooling and Servicing Agreement.
(j) The Underwriters shall have received evidence satisfactory to it and
counsel for the Underwriters that, on or before the Closing Date, UCC-1
financing statements shall have been (or, on the Closing Date, will be)
submitted for filing in the appropriate filing offices reflecting the transfer
of the interest in the Contracts and the proceeds thereof to the Trustee, on
behalf of the Trust.
(k) On the Closing Date, there shall not have occurred any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company or BCI since the date of the Terms Agreement which the
Underwriters conclude in the reasonable judgment of the Underwriters materially
impairs the investment quality of the Underwritten Certificates so as to make it
impractical or inadvisable to proceed with the public offering or the delivery
of the Underwritten Certificates as contemplated by the Final Prospectus.
(l) All proceedings in connection with the transactions contemplated by
this Agreement and all documents incident hereto shall be satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, and the
Underwriters and counsel for the Underwriters shall have received such
information, certificates and documents as they may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, if
the Company is in breach of any covenants or agreements contained herein or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in all material respects and in
form and substance reasonably satisfactory to the Underwriters and counsel for
the Underwriters, the Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Underwriters. Notice of any such cancellation shall be given to the Company in
writing, or by telephone or telegraph and confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If for any reason, other
than a default by the Underwriters pursuant to Section 9 hereof, the sale of the
Underwritten Certificates provided for herein is not consummated, the Company
and BCI jointly and severally agree to reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by them in
connection with their investigation, the preparation to market and the marketing
of the Underwritten Certificates, or in contemplation of the performance by them
of their obligations hereunder.
8. Indemnification and Contribution. (a) The Company and BCI, jointly
and severally, indemnify and hold harmless each Underwriter, each Underwriter's
respective officers and directors and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, as follows:
(i) against any and all losses, claims, expenses, damages or
liabilities, joint or several,
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<PAGE> 17
to which such Underwriter or such controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Final Prospectus, or
any amendment or supplement thereto, or any related Preliminary Final
Prospectus, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein not misleading; and
will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that (A) the Company and BCI will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
omission, or alleged untrue statement or omission, made in any of such
documents in reliance upon and in conformity with any Underwriters'
Information; and (B) such indemnity with respect to any Preliminary
Final Prospectus shall not inure to the benefit of any Underwriter (or
any person controlling such Underwriter) from whom the person asserting
any such loss, claim, damage or liability purchased the Underwritten
Certificates which are the subject thereof if such person did not
receive a copy of the Final Prospectus (or the Final Prospectus as
amended or supplemented, excluding any documents incorporated therein by
reference) at or prior to the confirmation of the sale of such
Underwritten Certificates to such person in any case where such delivery
is required by the Act and the untrue statement or omission of a
material fact contained in such Preliminary Final Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as amended or
supplemented, excluding any documents incorporated therein by reference)
"Underwriters' Information" shall have the meaning assigned to such term
in the related Terms Agreement;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by any such Underwriter), reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under
clause (i) or clause (ii) above.
This indemnity agreement will be in addition to any liability which the Company
or BCI may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 the Act or Section 20 the Exchange Act,
against any and all losses, claims, expenses, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Final Prospectus or any amendment or supplement
thereto, or any related Preliminary Final Prospectus, or arise out of, or are
based upon, the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements made
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with any Underwriters'
Information; and will
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<PAGE> 18
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action described therein, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to any indemnified
party otherwise than under this Agreement. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish to do so, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party under this
Section 8, such indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and in respect of which
indemnity could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Underwritten Certificates or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to above in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investiating or defending any action
or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Underwritten Certificates underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
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<PAGE> 19
9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Underwritten Certificates of any Class agreed
to be purchased by such Underwriter or Underwriters hereunder and such failure
to purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
portion of the Underwritten Certificates of such Class set forth opposite their
names in the Terms Agreement or in an attachment to the Terms Agreement bears to
the aggregate amount of Underwritten Certificates of such Class set forth
opposite the names of the remaining Underwriters) the Underwritten Certificates
of such Class which the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the amount of
Underwritten Certificates of such Class which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Underwritten Certificates of such Class as set forth in the Final
Prospectus, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Underwritten
Certificates of such Class, and if such non-defaulting Underwriters do not
purchase all the Underwritten Certificates of such Class, this Agreement will
terminate without liability to any non-defaulting Underwriter or the Company. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Company prior to
delivery of and payment for all Underwritten Certificates if prior to such time
(i) trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the over-the-counter market shall have been suspended or
limited, or minimum approximate prices shall have been established on any such
Exchange or market; (ii) a banking moratorium shall have been declared by either
federal or New York State authorities; (iii) there shall have occurred any
outbreak or escalation of hostilities or other calamity or crisis, the effect of
which on the financial markets of the United States is such as to make it, in
the judgment of the Underwriters, impracticable or inadvisable to market the
Underwritten Certificates; or (iv) there has been, since the date of the Terms
Agreement or since the respective dates as of which information is given in the
Registration Statement or the Final Prospectus any change in, or any development
involving a prospective change in, or affecting, the condition, financial or
otherwise, earnings, affairs or business of the Company, BCI or Bombardier Inc.
whether arising in the ordinary course of business or otherwise, which in the
reasonable judgment of the Underwriters would materially impair the market for,
or the investment quality of, the Underwritten Certificates.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and BCI or their respective officers and the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or BCI or any of the officers, directors or controlling persons referred
to in Section 8 hereof, and will survive delivery of and payment for the
Underwritten Certificates. The provisions of this Section 11 and Sections
5(a)(v), 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to it at the office or offices set forth
in the Terms Agreement; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 1600 Mountain View Drive, Colchester, Vermont
06446, Attention: President; or, if sent to BCI, will be mailed, delivered or
telegraphed and confirmed to it at 12735 Gran Bay Parkway West, Suite 1000,
Jacksonville, Florida 32258, Attention: Greg Giesen.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and their
successors and assigns, and no other person will have any right or obligation
hereunder.
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<PAGE> 20
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the jurisdiction as may be specified in the Terms
Agreement. The Terms Agreement may be executed in any number of counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall together constitute but one and the same instrument.
15. Miscellaneous. Time shall be of the essence of this Agreement. This
Agreement supersedes all prior or contemporaneous agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against whom enforcement of such change, waiver, discharge
or termination is sought. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
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<PAGE> 21
SCHEDULE I
Locations of Chief Executive Offices and Principal Places of Business
<TABLE>
<CAPTION>
<S> <C>
Bombardier Capital Mortgage Securitization 1600 Mountain View Drive
Corporation Colchester, Vermont 05446
Bombardier Capital Inc. 1600 Mountain View Drive
Colchester, Vermont 05446
Locations of Records
Bombardier Capital Mortgage Securitization 12735 Gran Bay Parkway West
Corporation Suite 1000
Jacksonville, Florida 32258
Bombardier Capital Inc. 12735 Gran Bay Parkway West
Suite 1000
Jacksonville, Florida 32258
</TABLE>
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<PAGE> 22
Exhibit A
Bombardier Capital Mortgage Securitization Corporation
Pass-Through Certificates
FORM OF TERMS AGREEMENT
Dated: __________, 199__
To: Bombardier Capital Mortgage Securitization Corporation (the "Company")
Bombardier Capital Inc. ("BCI")
Re: Underwriting Agreement Standard Provisions dated
January 1998 (the "Standard Provisions")
Series
Designation: Pass-Through Certificates, Series 199___-___, Classes _____
__________ (collectively, the "Certificates"). The Classes
__________ Certificates are collectively referred to herein as the
"Underwritten Certificates."
UNDERWRITING AGREEMENT: Subject to the terms and conditions set forth
herein and to the terms of the Standard Provisions, which are incorporated by
reference herein, the Company hereby agrees to issue and sell to __________ (the
"Underwriter"), and the Underwriter hereby agrees to purchase from the Company,
on __________, 199___, the Underwritten Securities at the purchase price and on
the terms set forth below; provided, however, that the obligations of the
Underwriter are subject to: (i) receipt by the Company of the ratings on the
Certificates as set forth herein, (ii) receipt by the Underwriter of the Sales
Agreement (the "Sales Agreement"), dated as of ____________, 199__, by and
between the Company and BCI, and the Pooling and Servicing Agreement (as defined
below), each being in form and substance satisfactory to the Underwriter.
The Certificates will be issued by BCMSC Securitization Trust 199___-___
pursuant to a Pooling and Servicing Agreement, to be dated as of
__________,199___ among the Company, BCI, as servicer (the "Servicer") and
__________, as Trustee (the "Trustee"), which incorporates by reference the
Company's Standard Terms to Pooling and Servicing Agreement (January 1998
Edition) (collectively, the "Pooling and Servicing Agreement"). The Certificates
will represent in the aggregate the entire beneficial ownership interest in the
assets of the Trust which will consist primarily of retail installment sales
contracts and installment sales agreements secured by units of manufactured
housing (the "Contracts") with original terms to maturity not exceeding 30 years
[and] one- to four-family, fully amortizing, [fixed] [adjustable] rate, first-
lien residential mortgage loans (the "Mortgage Loans" and, together with the
Contracts, the "Assets") with original terms to maturity not exceeding 30 years,
in each case having the characteristics described in the Prospectus Supplement.
The Company and the Servicer specifically covenant to make available on
the Closing Date for sale, transfer and assignment to the Trust, Contracts and
Mortgage Loans having the characteristics described in the Prospectus
Supplement; provided, however, that there may be nonmaterial variances from the
description of the Contracts and Mortgage Loans in the Prospectus Supplement and
the Contracts and Mortgage Loans actually delivered on the Closing Date.
REGISTRATION STATEMENT: References in the Standard Provisions to the
Registration Statement shall be deemed to include registration statement No.
333-40113.
INITIAL AGGREGATE SCHEDULE PRINCIPAL BALANCE OF ASSETS: Approximately
$__________.
A-1
<PAGE> 23
CUT-OFF DATE: ________________, 199__.
TERMS OF THE UNDERWRITTEN CERTIFICATES:
<TABLE>
<CAPTION>
=====================================================================================================
Initial
Principal Purchase
Class Balance Pass-Through Price
Designation (approximate)(1) Rate Rating
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[Specify Rating
Agency and
Rating]
=====================================================================================================
</TABLE>
[(1) Subject to a permitted variance of plus or minus 5% depending on the
Contracts and Mortgage Loans actually acquired by the Trust.]
SUBORDINATION FEATURES: Losses and Shortfalls on the Contracts and
Mortgage Loans will be allocated among the Certificates as described in the
Prospectus Supplement. [Except as otherwise specified in the Prospectus
Supplement, the Class ___Certificates are subordinated to the rights of the
Class ___ Certificates for purposes of the allocation of Realized Losses on the
Contracts and Mortgage Loans, as described in the Prospectus Supplement.]
RESERVE FUNDS:
DISTRIBUTION DATES: Each Distribution Date shall be the [____] day of
each month, or if such day is not a business day, on the next succeeding
business day, commencing in __________ 199__.
[REMIC ELECTION: An election will be made to treat some or all of the
assets of the Trust as a real estate mortgage investment conduit for federal
income tax purposes (the "REMIC"). The Classes __________ Certificates will be
designated as "regular interests" in the REMIC and the Class R Certificates will
be designated as the "residual interest" in the REMIC.]
PURCHASE PRICE: The Underwriter has agreed to purchase the Underwritten
Certificates from the Company for a purchase price of __________ % of the
initial aggregate principal amount thereof, plus accrued interest thereon from
__________, 199___. Payment of the purchase price for the Underwritten
Certificates shall be made to the Company in federal or similar immediately
available funds payable to the order of the Company.
DENOMINATIONS: The Underwritten Certificates will be issued in
[book-entry] [certificated, fully-registered] form in minimum denominations of
$__________ and integral multiples of $__________ in excess thereof, except that
one Certificate of each Class of the Underwritten Certificates may be issued in
a different denomination.
FEES: It is understood that servicing fees will be withheld from the
payments on the Assets in each month prior to distributions on the Certificates
on the Distribution Date occurring in such month.
CLOSING DATE AND LOCATION: 10:00 a.m. Eastern Time on __________,199__,
at the offices
A-2
<PAGE> 24
of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178-0060.
[The Company will deliver the Underwritten Certificates in certificated,
fully-registered form at the offices of the Underwriter in __________,
__________ on __________, 199__]. [The Company will deliver the Underwritten
Securities in book-entry form only, through the same-day funds settlement system
of The Depository Trust Company on the Closing Date.]
NON-SMMEA CLASSES: The Class __________ Certificates are not "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984 ("SMMEA") because such Class(es) of Certificates are not rated in
one of the two highest rating categories by a nationally recognized rating
agency.
ADDITIONAL CONDITIONS:
DUE DILIGENCE: At any time prior to the Closing Date, the Underwriter
has the right to inspect the Contract Files and Trustee Mortgage Loan Files, the
related manufactured homes [and] mortgaged properties and the related loan
origination procedures to ensure conformity with the Final Prospectus and the
Prospectus Supplement.
CONTROLLING AGREEMENT: This Terms Agreement sets forth the complete
agreement among the Company, BCI and the Underwriter and fully supersedes all
prior agreements, both written and oral, relating to the issuance of the
Underwritten Certificates and all matters set forth herein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Standard Provisions.
SERIES TERM SHEETS, COLLATERAL TERM SHEETS, STRUCTURAL TERM SHEETS AND
COMPUTATIONAL MATERIALS: The Underwriter hereby represents and warrants that (i)
information provided by it and attached hereto as Exhibit A constitutes all
"Collateral Term Sheets" disseminated by it in connection with the Underwritten
Certificates and (ii) information provided by it and attached hereto as Exhibit
B constitutes all "Structural Term Sheets", "Computational Materials" and
"Series Term Sheets" disseminated by it in connection with the Underwritten
Certificates. [Any Additional Terms.]
UNDERWRITERS' INFORMATION: It is understood and agreed that the
information set forth under the heading "Underwriting" in the Prospectus
Supplement, and the sentence regarding the Underwriter's intention to establish
a market in the Underwritten Certificates on the Cover Page of the Prospectus
Supplement, is the only information furnished by the Underwriter for inclusion
in the Registration Statement and the Final Prospectus.
TRUSTEE: __________ will act as Trustee of the Trust.
[CUSTODIAN:]
BLUE SKY QUALIFICATIONS:
A-3
<PAGE> 25
STATE TAX OPINIONS: The Company shall deliver to the Underwriters an
opinion of counsel pursuant to Section 6(e)(iv) of the Standard Provisions with
respect to [the State of Vermont and the State of Florida].
BLACKOUT PERIOD: [None.]
APPLICABLE LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF [NEW YORK] WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
NOTICES: All communications hereunder will be in writing and effective
only upon receipt and, if sent to the Underwriter, will be mailed, delivered or
telegraphed and confirmed to the Underwriter at ____________________, Attention:
_________________.
REQUEST FOR OPINIONS: (a) The Company and BCI hereby request and
authorize Morgan, Lewis & Bockius LLP, as their counsel in this transaction, to
issue on behalf of the Company and BCI, such legal opinions to the Underwriter,
its counsel, the Trustee and the Rating Agencies as may be required by any and
all documents, certificates or agreements executed in connection with this
Agreement.
(b) The Underwriter hereby requests and authorizes __________, as its
special counsel in this transaction, to issue to the Underwriter such legal
opinions, as they may require, and the Company and BCI shall have furnished to
_________ such documents as they may request for the purpose of enabling them to
pass upon such matters.
The Underwriter agrees, subject to the terms and provisions of the
Standard Provisions, a copy of which is attached hereto, and which is
incorporated by reference herein in its entirety and made a part hereof to the
same extent as if such provisions had been set forth in full herein, to purchase
the Underwritten Certificates.
[NAME OF UNDERWRITER]
By:
Name:
Title:
Accepted and Acknowledged
As of the Date First
Above Written:
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
By:
-----------------------------------
A-4
<PAGE> 26
Name:
Title:
By:
------------------------------------
Name:
Title:
BOMBARDIER CAPITAL INC.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
A-5
<PAGE> 27
Exhibit B-1
____________, 199_
[Name and Address
of Underwriter(s)]
Bombardier Capital Mortgage Securitization Corporation
Pass-Through Certificates, Series
Ladies and Gentlemen:
We have acted as special counsel to Bombardier Capital Mortgage
Securitization Corporation, a Vermont corporation ("BCMSC"), in connection with
the formation by it of BCMSC Securitization Trust 199_-_ (the "Trust"), which
consists primarily of a pool of retail installment sales contracts and
installment sales agreements (the "Contracts") secured by units of manufactured
housing ("Manufactured Homes") and mortgage loans (the "Mortgage Loans" and,
together with the Contracts, the "Assets") secured by first liens on the real
estate to which the related Manufactured Homes are deemed permanently affixed
(the "Mortgaged Properties").
The Trust was organized pursuant to a Pooling and Servicing Agreement
(the "Series Agreement"), dated as of ____________ 1, 199_, by and among BCMSC,
Bombardier Capital Inc. ("BCI") in its capacity as servicer of the Assets (the
"Servicer"), and __________, as trustee (the "Trustee"), which incorporates by
reference BCMSC's Standard Terms to Pooling and Servicing Agreement (January
1998 Edition) (together with the Series Agreement, the "Pooling and Servicing
Agreement"). We also have acted as special counsel to BCI in connection with its
role as Servicer for the Trust and to BCI (the "Seller"), as seller of the
Assets to BCMSC. Capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement.
The Trust is issuing today __________ Classes of certificates
(collectively, the "Certificates"), which Classes are described in the Pooling
and Servicing Agreement. The Classes ___ Certificates (collectively, the
"Offered Certificates") are being sold to you today pursuant to a terms
agreement, dated as of _______________, 199_, among BCMSC, BCI and each of you
(the "Terms Agreement"). This opinion is furnished to you in accordance with
Section 6(e) (i) of BCMSC's Underwriting Agreement Standard Provisions, January
1998 (the "Standard Provisions" ), the terms of which are incorporated by
reference into the Terms Agreement (the Terms Agreement together with the
Standard Provisions being referred to herein collectively as the "Underwriting
Agreement").
In rendering the opinions expressed below, we have made such legal and
factual examinations and inquiries as we have deemed necessary or advisable for
the purpose of rendering this opinion, including but not limited to the
examination of the following:
a. BCMSC's registration statement on Form S-3 (No.
333-__________), as amended (the "Registration Statement"), filed under
the Securities Act of 1933, as amended (the "Act"), and the Prospectus,
dated _____________, 199_ (the "Base Prospectus"), and the Prospectus
Supplement, dated __________, 199_ (the "Prospectus Supplement," and
collectively with the Base Prospectus, the "Prospectus"), all relating
to the Offered
<PAGE> 28
[Name of Underwriter(s)]
____________, 19__
Page 2
Certificates;
b. The Pooling and Servicing Agreement;
c. The form of the Certificate evidencing each Class of the
Certificates;
d. The sales agreement, dated as of ____________ 1, 199_ (the
"Sales Agreement"), between the Seller and BCMSC pursuant to which BCMSC
acquired the Assets;
e. The Underwriting Agreement (together with the Sales Agreement
and the Pooling and Servicing Agreement, the "Agreements");
f. The Articles of Incorporation, as amended, and Bylaws of each
of BCMSC and BCI, together with a certificate of existence from the
State of Vermont and the State of Massachusetts with respect to BCMSC
and BCI, respectively; and
g. Resolutions of each of BCMSC and BCI pertaining to the subject
transactions, each certified by an officer of BCMSC and BCI, as
appropriate.
In rendering the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of signatures not witnessed by us, (iv) the legal capacity of
natural persons and (v) the due authorization, execution and delivery of all
documents by all parties thereto and the validity and binding effect thereof
(other than the authorization, execution and delivery of documents by BCMSC and
BCI, and the validity and binding effect thereof upon BCMSC and BCI, to the
extent we express our opinion on such subjects below).
In addition, we have relied, as to factual matters, upon representations
included in the Agreements and other agreements and documents delivered at the
closing, and upon certificates of officers of BCMSC, BCI and the Trustee, and
upon certificates of public officials. Whenever the phrase "to our knowledge" or
"known to us" is used in this opinion letter, it refers to the actual knowledge
of the attorneys of this firm involved in the representation of BCMSC and BCI in
connection with the transactions described herein without independent
investigation.
The obligations of the parties with respect to the Agreements are
subject, with respect to their enforceability, to the provisions of federal and
other applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting the enforcement of creditors' rights generally,
now or hereafter in effect. Such obligations also are subject to usual equity
principles, which may limit enforcement under state law of certain remedies, but
which do not affect
B-2
<PAGE> 29
[Name of Underwriter(s)]
____________, 19__
Page 3
the validity of such documents.
We do not purport to express an opinion on any laws other than those of
the States of [Vermont, Massachusetts] and New York and the United States of
America.
I.
Based upon the foregoing and such other documents and information a
review of which we have considered necessary for the purposes hereof, and
subject to all the assumptions and qualifications set forth herein, we are of
the opinion that:
(1) Each of BCMSC and BCI has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation.
(2) Each of BCMSC and BCI has the corporate power and corporate
authority to carry on its business as described in the Prospectus and to
own and operate its properties in connection therewith.
(3) Each of BCMSC and BCI is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its organization and each has the corporate power to own its assets
and to transact the business in which it is currently engaged and to
perform their respective obligations under each of the Agreements to
which it is a party. Each of BCMSC and BCI is qualified to do business
as a foreign corporation and each is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on
the business, properties, assets, or condition (financial or other) of
BCMSC and BCI, respectively or on their ability to perform their
respective obligations under the Agreements.
(4) Each of the Agreements to which BCMSC and BCI is a party has
been duly authorized, executed and delivered by BCMSC and BCI, as
applicable, and each constitutes a legal, valid and binding obligation
of, each of BCMSC and BCI, enforceable against each of BCMSC and BCI in
accordance with its terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (B) such enforcement may be limited by general principles
of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law).
(5) The execution and delivery by each of BCMSC and BCI of each
of the
B-3
<PAGE> 30
[Name of Underwriter(s)]
____________, 19__
Page 4
Agreements to which it is a party, the performance of their respective
obligations thereunder and the signing of the Registration Statement by
BCMSC are within the corporate power of BCMSC and BCI, as applicable,
and have been duly authorized by all necessary corporate action on the
part of BCMSC and BCI, as applicable; and neither the issue and sale of
the Certificates, nor the consummation of the transactions contemplated
by the Agreements nor the fulfillment of the terms thereof will, to the
best of our knowledge after due inquiry, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or asset of BCMSC and
BCI pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which BCMSC and BCI is a party or by
which either may be bound or to which the property or assets of BCMSC
and BCI are subject, nor will such action result in any violation of the
provisions of the certificate of incorporation or bylaws of BCMSC and
BCI or, to the best of our knowledge after due inquiry, any law,
administrative regulation or administrative or court decree of any state
or federal courts, regulatory bodies, other body, governmental entity or
arbitrator having jurisdiction over BCMSC and BCI.
(6) To the best of our knowledge, there is no investigation,
action, litigation or administrative proceeding of or before any court,
tribunal or governmental body currently pending or threatened against
BCMSC or BCI (a) asserting the invalidity of the Agreements or the
Certificates, (b) seeking to prevent the consummation of any of the
transactions contemplated by the Agreements, (c) that would be likely to
impair materially the ability of BCMSC or BCI or the Seller, as the case
may be, to perform its obligations under any of the Agreements or to
affect materially and adversely the validity or enforceability of any of
the Agreements or the Certificates, or (d) that could reasonably be
expected to result in any material adverse change in the business,
operations, financial conditions, properties or assets of BCMSC or BCI,
or the ability of BCMSC or BCI to carry on its business substantially as
it is now conducted.
(7) Upon due execution and authentication by the Trustee of each
Class of the Offered Certificates in accordance with the terms of the
Pooling and Servicing Agreement, and upon payment for the Offered
Certificates as provided for in the Underwriting Agreement, the Offered
Certificates will be validly issued and outstanding and the holders
thereof will be entitled to the benefits provided to Certificateholders
pursuant to the Pooling and Servicing Agreement.
[(8) If Mortgage Loans are included as Assets of the related
Trust] (a) Assuming that the transfer of the Mortgage Notes and the
applicable Mortgages to the Trustee as contemplated by the Pooling and
Servicing Agreement is a sale and that the Mortgage Notes have been duly
endorsed and transferred to the Trustee as provided in the
B-4
<PAGE> 31
[Name of Underwriter(s)]
____________, 19__
Page 5
Sales Agreement, the Trustee will obtain, under the laws of
____________, all of the respective sellers' rights under the applicable
Mortgages (including whatever right the applicable sellers have to
require the trustee under the Mortgage to foreclose thereunder) when
such Mortgage Notes are delivered to the Trustee against payment
therefor. In __________, when a mortgagee assigns or negotiates a note
secured by a deed of trust to a third party, the deed of trust is also
automatically assigned. Accordingly, the laws of ____________ do not
require the recordation of an assignment or similar instrument as to the
Mortgages in the official land records to transfer to the Trustee the
rights of the applicable sellers in, to and under the Mortgages.
[(b) If the transfer to the Trustee of Mortgage Notes and
the applicable Mortgages is deemed to be a grant of a security interest
therein to the Trustee and assuming that the Mortgage Notes have been
duly endorsed and delivered to the Trustee as provided in the Sales
Agreement, execution and recordation of assignments or similar
instruments as to the Mortgages are not required under the laws of
__________ to create or perfect such a security interest in the Mortgage
Notes and assuming that the Mortgage Notes have been duly endorsed and
delivered to the Trustee as provided in the Sales Agreement, the
beneficiary's rights under the applicable Mortgages will inure to the
Trustee when the Trustee becomes the owner and holder of the Mortgage
Notes after proper realization upon the Trustee's security interest in
such Mortgage Notes.]
(9) No consent, approval, authorization or order of, registration
or filing with, or notice to, any court or governmental agency or body
or official is required under the laws of the United States of America
or the States of [Vermont and Massachusetts] for the consummation by
each of BCMSC and BCI of the transactions contemplated by the Agreements
to which it is a party, except such as may be required under state
securities or "blue sky" laws of any jurisdiction in connection with the
purchase and distribution by each Underwriter of the Offered
Certificates.
(10) Neither BCMSC nor the Trust established pursuant to the
Pooling and Servicing Agreement is required, as a result of the offer
and sale of the Offered Certificates as contemplated by the Underwriting
Agreement, to be registered under the Investment Company Act of 1940, as
amended.
(11) The Registration Statement has become effective under the
Act, and, to our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
B-5
<PAGE> 32
[Name of Underwriter(s)]
____________, 19__
Page 6
(12) The statements in the Base Prospectus under the captions
"Description of the Certificates," "The Pooling and Servicing
Agreements," "ERISA Considerations," "Federal Income Tax Consequences"
and "State Tax Considerations" and the statements in the Prospectus
Supplement under the captions "The Trust," "Description of the Offered
Certificates," "ERISA Considerations" and "Federal Income Tax
Consequences," insofar as such statements constitute a summary of the
documents referred to therein, fairly summarize such documents and
present the information called for by the Act and the rules and
regulations promulgated under the Act.
II.
We have participated in various conferences with the officers and
directors of BCMSC and its independent certified public accountants. In some
conferences you and your counsel also participated. At those conferences, the
contents of the Registration Statement and Prospectus were discussed and
revised. Since the dates of those conferences, we have inquired of certain
officers whether there has been any material change in the affairs of BCMSC.
Because of the inherent limitations in the independent verification of
factual matters, and the character of determinations involved in the preparation
of registration statements under the Act, we are not passing upon, and do not
assume any responsibility for, and make no representation that we have
independently verified, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except as
specifically set forth in paragraph 12 of Part I of our opinion above. Also, we
do not express any opinion or belief as to the financial statements or other
financial or statistical information contained or incorporated by reference into
the Registration Statement. However, subject to the foregoing, on the basis of
our participation in the conferences referred to above and our examination of
the documents referred to herein, we advise you that: (a) in our opinion, the
Registration Statement, when it became effective, and the Prospectus, as of its
date and as of the date hereof (other than the financial statements, schedules
and other financial data included therein or excluded therefrom or included in
or excluded from the exhibits to the Registration Statement or incorporated
therein by reference, as to which we express no opinion) comply as to form in
all material respects with the requirements of the Act and the rules and
regulations promulgated thereunder; and (b) to our knowledge, there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required. We note that
the Pooling and Servicing Agreement will be filed as an exhibit to a Current
Report of BCMSC on Form 8-K within 15 days after the date hereof. Further,
nothing has come to our attention that leads us to believe that the Registration
Statement, when it became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein not misleading; or that
the Prospectus, as of its date
B-6
<PAGE> 33
[Name of Underwriter(s)]
____________, 19__
Page 7
and as of the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; except that we make no
statement with respect to the financial statements or other financial or
statistical data included therein or incorporated therein by reference,
including, but not limited to, the information relating to the Assets, under the
heading "The Asset Pool" and the information relating to the Assets and
financial data under the headings "Maturity and Prepayment Considerations" and
"Yield on the Offered Certificates in the Prospectus Supplement and the
information set forth in the Prospectus under the headings "Maturity and
Prepayment Considerations" and "Yield Considerations."
We consent to reliance on this opinion letter by you and by (i) the
Trustee, (ii) [names of rating agencies] each for the purpose of issuing a
letter rating the Offered Certificates, and (iii) [counsel for the
Underwriters], with respect to all matters of _________ law covered hereby, for
the purpose of rendering their opinion to the Underwriters. Except as provided
in the preceding sentence, this opinion letter may not be relied upon by, nor
may copies be delivered to, any person without our prior written consent.
Very truly yours,
B-7
<PAGE> 34
[Name of Underwriter(s)]
__________ __, 19__
Page 1
Exhibit B-2
__________ _____, 199_
[Name and Address
of Underwriter(s) ]
[Name and Address
of Rating Agency]
Bombardier Capital Mortgage Securitization Corporation
Pass-Through Certificates, Series _______
Ladies and Gentlemen:
We have acted as special counsel to Bombardier Capital Mortgage
Securitization Corporation, a Vermont corporation (the "Company"), in connection
with the formation by it of BCMSC Trust 199_-_ (the "Trust"), the assets of
which consist primarily of a pool of retail installment sales contracts and
installment sales agreements (the "Contracts") secured by units of manufactured
housing ("Manufactured Homes") [and mortgage loans] (the "Mortgage Loans," and,
together with the Contracts, the "Assets") secured by first liens the real
estate to which the related Manufactured Homes are deemed permanently affixed
(the "Mortgaged Properties").
The Trust was organized pursuant to a Pooling and Servicing Agreement
(the "Series Agreement"), dated as of _____________ __, 199_, by and among the
Company, Bombardier Capital Inc. ("BCI") in its capacity as servicer of the
Contracts (the "Servicer"), and __________, as trustee (the "Trustee"). The
Series Agreement incorporates by reference the Company's Standard Terms to
Pooling and Servicing Agreement (January 1998 Edition) (the "Standard Terms,"
and, together with the Series Agreement, the "Pooling and Servicing Agreement").
We also have acted as special counsel to BCI in connection with its role as
Servicer for the Trust. Capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement.
The Trust is issuing today number classes of certificates (collectively,
the "Certificates"), which Classes are described in the Pooling and Servicing
Agreement. The Classes __________ Certificates (the "Underwritten Certificates")
are being sold to you today pursuant to a terms agreement (the "Terms
Agreement") dated _________ __, 19__, among you (the "Underwriter"), the Company
and BCI. This opinion is furnished to you in accordance with Section 6(e) of the
Company's Underwriting Agreement Standard Provisions (January 1998) (the
"Standard Provisions"), the terms of which are incorporated by reference into
the Terms Agreement (the Terms Agreement together with the Standard Provisions
being referred to collectively as the "Underwriting Agreement" ).
In rendering the opinions expressed below, we have examined the
following documents:
(a) The Pooling and Servicing Agreement;
(b) The Sales Agreement, dated as of __________ __, 19__ (the
"Sales Agreement"), by and between BCI, as seller, and the
Company, as purchaser, pursuant to which the Company
acquired the Assets;
<PAGE> 35
[Name of Underwriter(s)]
__________ __, 19__
Page 2
(c) Financing statements (the "Financing Statements") (1)
relating to the Contracts and the payments thereon and
proceeds thereof, naming [BCI] as debtor, the Company as
secured party and the Trustee as assignee, (2) relating to
the Assets and the payments thereon and proceeds thereof,
naming [the Company] as debtor and the Trustee as Secured
Party, and (3) relating to the Assets and the payments
thereon and proceeds thereof, the Company's rights under the
Sales Agreement and to the [specify any reserve or other
funds pledged or conveyed to the Trustee by the Company],
naming the Company as debtor and the Trustee as secured
party; and
(d) The Underwriting Agreement (together with the Pooling and
Servicing Agreement and the Sales Agreement, the
"Agreements").
For the purposes of this opinion:
(i) the ["Florida/Vermont UCC"] means the Uniform
Commercial Code as in effect in the State of
[Florida/Vermont];
(ii) "Money" means "money" as defined in Section 1-201
of the applicable UCC;
(iii) "Instruments" means "instruments" as defined in
Section [9- 105(1)(i)] of the applicable UCC;
(iv) "General Intangibles" means "general intangibles"
as defined in Section [9-106] of the applicable UCC; and
(v) "Chattel Paper" means "chattel paper" as defined in
Section [9-105(1)(b)] of the applicable UCC.
In rendering the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of signatures not witnessed by us, (iv) the legal capacity of
natural persons and (v) the due authorization, execution and delivery of all
documents by all parties thereto and the validity, binding effect and
enforceability thereof. We note that you have received today our opinion with
respect to certain of the matters set forth in clause (v) of the preceding
sentence. Whenever the phrase "to our knowledge" or "known to us" is used
herein, it refers to the actual knowledge of the attorneys of this firm involved
in the representation of the Company and BCI in connection with the
B-2-2
<PAGE> 36
[Name of Underwriter(s)]
__________ __, 19__
Page 3
transactions described herein without independent investigation.
We have not examined the actual Contracts [or] Mortgage Notes, the
assignments of the Contracts or the endorsements of the Mortgage Notes, any
Mortgages or assignments thereof or any other Contract Documents or Mortgage
Loan Documents (collectively, the "Asset Documents"), and we express no opinion
concerning the conformity of any of the foregoing to the requirements of any of
the Agreements. We have not examined the certificate of title, if any,
pertaining to the ownership or status of title to the property securing any
Contract and we express no opinion thereon. We also have not examined any title
records as they pertain to ownership or status of title to the Mortgaged
Property securing any Mortgage Note or the Real Property securing any Land
Secured Contract. [We call to your attention that the Initial Certification of
the Trustee delivered pursuant to Section 2.03(c)(1) of the Standard Terms
identifies certain document deficiencies with respect to the Mortgage Loan
Documents for certain Mortgage Loans. Consequently, certain assumptions made
herein regarding the conformity of the Asset Documents to the requirements of
any of the Agreements may not be true. We note that the Sales Agreement provides
that, in some but not all circumstances, BCI is required to repurchase or
replace Assets to the extent of document deficiencies that are not cured.]
We have requested [CSC Networks (formerly known as Prentice-Hall Legal &
Financial Services)] to review the UCC records maintained by the ______________
Secretary of State and the Register of Deeds of ________________, _____________
with respect to financing statements naming BCI or the Company, as debtor. Our
opinion expressed in numbered paragraph 3 below is rendered in reliance upon the
results of that search and upon a certificate of officers of the respective
companies relating thereto, dated the date hereof (the "Officers' Certificate"),
and is based upon the assumptions (i) that no financing statements were filed
against any of the aforementioned companies as of the dates through which the
respective related search reports are current, which is no earlier than ________
___, 19__, other than those reflected in such search reports, and (ii) that no
financing statements have been filed against such companies since _________ ___,
19__. We assume no liability for the search reports. Each of BCI and the Company
has represented that the Assets formerly owned by it are subject to no liens,
claims or encumbrances having priority over the Trustee's lien thereon. We do
not purport to express an opinion on any laws other than those of the [State of
Vermont/Florida] and the United States of America.
Based upon the foregoing and such other documents and information a
review of which we have considered necessary for the purposes hereof, and
subject to all other assumptions and qualifications set forth herein, we are of
the opinion that:
1. In the event that either the transfer of the Assets by [BCI]
to the Company or the transfer of the Assets by the Company to the
Trustee is found not to be a "true sale," (a)
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<PAGE> 37
[Name of Underwriter(s)]
__________ __, 19__
Page 4
BCI (i) has granted to the Company a valid security interest under
Article 9 of the [Vermont/Florida] UCC in the Contracts and the Mortgage
Notes, and in the proceeds thereof to the extent provided in Section
[9-306] of the [Vermont/Florida] UCC, and (ii) has assigned to the
Company a security interest in the Manufactured Homes, and (b) the
Company (i) has either granted or assigned to the Trustee a valid
security interest under Article 9 of the [Vermont/Florida] UCC in the
Contracts [and the Mortgage Notes], and in the proceeds thereof to the
extent provided in Section [9-306] of the [Vermont/Florida] UCC, and
(ii) has assigned to the Trustee a security interest in the Manufactured
Homes securing the Contracts.
[2. [If Reserve Fund included] The Company has granted to the
Trustee a valid security interest in the Money and Instruments
comprising the [specify any fund pledged to the Trustee], and in the
proceeds thereof to the extent provided in Section [9-306] of the
[Vermont/Florida] UCC. ]
3. The Financing Statements are in appropriate form for filing in
the office of the [Vermont/Florida] Secretary of State and in the office
of the Register of Deeds of ____________________, and the due indexing
of the Financing Statements among the UCC financing statement records in
the office of the [Vermont/Florida] Secretary of State and in the office
of the Register of Deeds of __________________ will be sufficient to
perfect the security interests created by the Sales Agreement and by the
Pooling and Servicing Agreement in the Contracts and in the proceeds
thereof (to the extent a security interest in proceeds of the Contracts
was created as provided in Section [9-306] of the [Vermont/Florida] UCC)
[and in that portion of the specify any fund pledged by the Company to
the Trustee consisting of those items and types of collateral a security
interest in which may be perfected by filing a financing statement under
the [Vermont/Florida] UCC]. Upon perfection of the Company's security
interest in the Contracts and of the Trustee's security interest in the
Contracts, no other security interest will be equal or prior to the
Trustee's security interest in the Contracts and in the proceeds thereof
to the extent provided in Section [9-306] of the [Vermont/Florida] UCC.
[4. [If Assets include Mortgage Loans] The security interest of
the Trustee in the Mortgage Notes and in those portions of the specify
any fund to be pledged by the Company to the Trustee that constitute
Money or Instruments and in the proceeds thereof (but only to the extent
provided in Section [9-306] of the [applicable] UCC) will be perfected
upon the delivery of the Mortgage Notes and such Money or Instruments to
the Trustee. Upon such delivery, no other security interest will be
equal or prior to the security interest of the Trustee in the Mortgage
Notes and such Money or Instruments. No opinion is expressed with
respect to the continued perfection of such security interest in the
Mortgage Notes or such Money
B-2-4
<PAGE> 38
[Name of Underwriter(s)]
__________ __, 19__
Page 5
or Instruments in the event that the Trustee relinquishes possession
thereof.]
Our opinions with respect to the security interests of the Trustee in
items of collateral other than the Manufactured Homes are subject to the
following qualifications:
(a) we call to your attention that a security interest in
proceeds is limited to the extent set forth in Section [9-306] of the
applicable UCC;
(b) we have assumed, based on the certifications contained in the
Officer's Certificate, that each item of collateral described herein
exists and that BCI has sufficient rights in all such collateral for the
security interests therein granted to the Company pursuant to the Sales
Agreement to attach and that the Company has sufficient rights in all
such collateral for the security interests therein granted or assigned
pursuant to the Pooling and Servicing Agreement to attach;
(c) we have assumed that payment for the Certificates has been
made in accordance with the Underwriting Agreement and that payment for
the Assets has been made in accordance with the Sales Agreement;
(d) we have assumed that the Contracts are Chattel Paper under
the applicable UCC [and the Mortgage Notes are Instruments as defined in
the applicable UCC (but excluding any Instrument constituting a
"certificated security" as defined in Section [8-102] of the applicable
UCC);
(e) we have assumed, based on the certifications in the Officer's
Certificate, that each Contract validly created a security interest in
BCI in the underlying Manufactured Home, which security interest
attached;
(f) we have assumed (i) that payment for the Offered Certificates
has been made in accordance with the Underwriting Agreement and (ii)
that [_________________] has made payment for the [Class X and Class R]
Certificates to the Company in accordance with the agreement between the
Company and [____] providing for such purchase and that the [Class X and
Class R] Certificates have been executed and authenticated by the
Trustee and delivered to [_____] or its designee;
(g) we have assumed that each Contract is in one of the forms
supplied by BCI in the Officers' Certificate, in which case the
Contracts are Chattel Paper under the applicable UCC;
B-2-5
<PAGE> 39
[Name of Underwriter(s)]
__________ __, 19__
Page 6
(h) we have assumed, based upon the certifications in the
Officer's Certificate, the due execution of each endorsement of each
[Mortgage Note,] of an assignment or assignments of the Contracts [and
of an assignment in recordable form of each Mortgage] (an "Assignment"),
in each case from the originators thereof through any intervening
endorsees or assignees to the Company and the validity of each such
endorsement and assignment under relevant state law;
[(i) we have assumed that, to the extent required by applicable
state law, each Assignment of a Mortgage securing a Mortgage Loan
necessary to reflect the transfer of such Mortgage from the related
originator to the Trustee has been duly recorded in the proper recording
office subject to no intervening recordations prior to the date of
recordation of such Assignment. We note that Section _________ of the
Standard Terms requires that the Company arrange for the recordation of
such Assignments promptly following closing and, in any event, within
one year after the Closing Date;]
(j) we call to your attention that Section 552 of Title 11 of the
United States Code (the "Bankruptcy Code") limits the extent to which
property acquired by a debtor after the commencement of a proceeding
under the Bankruptcy Code may be subject to a security interest arising
from a security agreement entered into by the debtor before the
commencement of such a proceeding;
(k) we have assumed, based on Section 204 of the Standard Terms,
that the Trustee has not received any notice as to any security interest
in the Contracts [or Mortgage Notes] [specify any fund pledged to the
Trustee], other than a notice with respect to the security interest of
the Trustee;
(l) we have assumed based on the certifications in the Officer's
Certificate, that each Contract [and each Mortgage Note] is evidenced by
only one original document; and
(m) we have assumed based on the certifications in the Officer's
Certificate, that there are no agreements or understandings among the
Company, BCI, the Trustee or any other party which would modify,
release, terminate or delay the attachment of the security interest
granted to the Trustee under the Pooling and Servicing Agreement.
As to factual matters, we have relied upon representations included in
the Agreements, in documents delivered at the closing, upon certificates of
officers of BCI, the Company and the Trustee, and upon certificates of public
officials. Without limiting the foregoing, we have relied upon representations
and warranties in the Agreements or upon certificates of BCI, the Company, or
the Trustee:
B-2-6
<PAGE> 40
[Name of Underwriter(s)]
__________ __, 19__
Page 7
(a) that BCI has the full right to sell each Asset to the Company
and that the Company has the full right to sell each Asset to the
Trustee, and that, upon authorization, execution and delivery of the
Sales Agreement by all parties thereto, the Company will be the sole
beneficial owner of each Asset free and clear of liens, encumbrances
(except the lien created by the Pooling and Servicing Agreement), and
that the Company has not assigned any interest or participation in any
Asset other than to the Trustee that has not been released;
(b) that each Asset was acquired by each of BCI, the Company and
the Trustee in the ordinary course of their respective businesses, in
good faith, for value and without notice that it is overdue or has been
dishonored or of any defense against or claim to it on the part of any
person;
(c) as to the absence of any actual or constructive knowledge or
notice by BCI, the Company or the Trustee of any interest contrary to
the Trustee's interests under the Pooling and Servicing Agreement;
(d) that the Trustee is not an affiliate of the Company; and
(e) that the Obligor's debt evidenced by any Contract is not
separately evidenced by any promissory note or other Instrument.
We do not express any opinion as to:
(1) the priority of any security interest as against any claim or
lien in favor of the United States or any State or any agency or
instrumentality of the United States or any State (including, without
limitation, federal tax liens, liens under the Employee Retirement
Income Security Act of 1974, as amended, or claims given priority
pursuant to 31 U.S.C. ss. 3713);
(2) the priority of any security interest as against any liens,
claims, or other interests that arise by operation of law and do not
require any filing or similar action in order to take priority over a
prior perfected security interest under the UCC of any relevant
jurisdiction;
(3) the priority of any security interest as against the rights
of any purchaser of any of the Assets who gives new value for and takes
possession of such Assets in the ordinary course of his business without
knowledge that any such Asset is subject to a security interest as
described in Section [9-308] of the applicable UCC or against a
purchaser of any of the Assets (including a secured party) who could be
afforded priority under Section [9-309] of the applicable UCC;
B-2-7
<PAGE> 41
[Name of Underwriter(s)]
__________ __, 19__
Page 8
(4) the priority of any security interest as against a lien
creditor (as defined in Section [9-301(3)] of the applicable UCC) who
attached or levied prior to the perfection of the security interest of
the Trustee;
(5) the priority of any security interest as against a lien
creditor to the extent the security interest purports to secure future
advances or other extensions of credit subsequent to the date hereof
other than advances made pursuant to commitments existing on the date of
attachment by such lien creditor;
(6) the priority of any security interest in collateral
constituting proceeds of collateral subject to a third party's security
interest;
(7) the priority of any security interest as against another
secured party in possession of the related collateral prior to the
perfection of the Trustee's security interest through filing of the
Financing Statements;
(8) the priority of any security interest as against a purchase
money security interest that could be perfected without possession
pursuant to Section [8-313(1)(h)] of the applicable UCC or that could be
afforded priority under Section [9-312(4)] of the applicable UCC;
(9) the priority of any security interest as against the rights
of any person against whom the transfer to BCI, the Company or the
Trustee was "wrongful" within the meaning of Section [8-315] of the
applicable UCC;
(10) the priority of any security interest as against a security
interest perfected under the laws of another jurisdiction to the extent
the collateral subject to such security interest was located in such
jurisdiction within four months prior to the perfection of the security
interest of the Company or the Trustee;
(11) the priority of any security interest as against any person
who has entered into a subordination agreement or intercreditor
agreement with the Company or the Trustee with respect to any of the
collateral covered by the opinions set forth above; and
(12) whether or to what extent particular items included in the
[specify any fund pledged to Trustee] may constitute Money or
Instruments.
With respect to the Financing Statements, we call your attention to the
fact that the effectiveness of the Financing Statements will terminate (i)
unless appropriate continuation
B-2-8
<PAGE> 42
[Name of Underwriter(s)]
__________ __, 19__
Page 9
statements are filed within the time period prescribed by relevant state law;
(ii) with respect to collateral acquired more than four months after any name
change by the debtor, unless new appropriate financing statements indicating the
new name of the debtor are properly filed before the expiration of four months
after the debtor changes its name; and (iii) four months after any relocation by
the debtor of its chief executive office or principal place of business to a new
jurisdiction, unless such security interest is perfected in such new
jurisdiction within such time.
[We do not purport to express an opinion on any laws other than those of
the ________________________, ___________________________ and the United States
of America, except to the extent that the opinion expressed in numbered
paragraph 4 above relates to matters of ______________ law.]
We consent to reliance on this opinion letter by you and by (i) the
Trustee and (ii) Underwriters' counsel, with respect to all matters of
______________________________ law covered hereby, for the purpose of rendering
their opinion to the Underwriters. Except as provided in the preceding sentence,
this opinion letter is for your benefit only and may not be relied upon by, nor
may copies be delivered to, any other person without our prior written consent.
Very truly yours,
B-2-9
