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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: February 2, 1999
(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)
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<S> <C>
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)
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(802) 654-7200
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Registrant's Telephone Number, including area code
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(Former name, former address and former fiscal year, if changed since
last report)
Index to Exhibits is on Page 5
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ITEM 2. Acquisition or Disposition of Assets; General
On February 2, 1999, Bombardier Capital Mortgage
Securitization Corporation issued its Senior/Subordinated Pass-Through
Certificates, Series 1999-A, such series representing interests in a pool of
fixed rate manufactured housing sales contracts deposited in the BCMSC Trust
1999-A. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the prospectus dated January 28, 1999, as
supplemented by the prospectus supplement dated January 28, 1999 (together, the
"Prospectus").
The Class A Certificates consist of the Class A-1, Class A-2,
Class A-3, Class A-4 and Class A-5 Certificates. The Class M Certificates
consist of the Class M-1 Certificates and Class M-2 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
M-1 Certificates are subordinated to the Class A Certificates to the extent
described in the Prospectus. The Class M-2 Certificates are subordinated to the
Class A Certificates and the Class M-1 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
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Item 601(a)
of Regulation S-K
Exhibit No. Description
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4.1 Series 1999-A Pooling and Servicing
Agreement, dated as of January 1, 1999,
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 1999 Edition).
99 Form of Underwriting Agreement.
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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
February 2, 1999
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(Date)
By: /s/ Andrew Baronowsky,
______________________________________
Name: Andrew Baronowsky,
Title: Treasurer
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INDEX TO EXHIBITS
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<CAPTION>
Exhibit No. Description
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<S> <C>
4.1 Series 1999-A Pooling and Servicing
Agreement, dated as of January 1, 1999,
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 1999 Edition).
99 Form of Underwriting Agreement.
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STATEMENT OF DIFFERENCES
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The section symbol shall be expressed as ............................. 'SS'
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EXECUTION COPY
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BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
DEPOSITOR,
BOMBARDIER CAPITAL INC.,
SERVICER
AND
HARRIS TRUST AND SAVINGS BANK,
TRUSTEE
-----------
SERIES 1999-A POOLING AND SERVICING AGREEMENT
DATED AS OF JANUARY 1, 1999
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BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
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THIS SERIES 1999-A POOLING AND SERVICING AGREEMENT, dated as of January
1, 1999, is made with respect to the formation of BCMSC Securitization Trust
1999-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 1999 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
$175,534,000, to be known as the Senior/Subordinated Pass-Through Certificates,
Series 1999-A (the "Certificates"). The Certificates consist of eleven 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 nine 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 and Mortgage Loans (together,
the "Assets") listed in Schedule I hereto, together with the related Contract
Documents and Mortgage Loan 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
Assets 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
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Prepayments, Net Insurance Proceeds, Net Liquidation Proceeds, Repurchase Prices
and other unscheduled collections received on the Assets on and after the
Cut-off Date; (b) the security interests in the Manufactured Homes and Mortgaged
Properties granted by the Obligors pursuant to the related Assets; (c) all
funds, other than investment earnings, relating to the Assets on deposit in the
Certificate Account 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 Assets (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 Assets, 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 excess, if any, of the Target Overcollateralization
Amount over the Current Overcollateralization Amount.
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"Accrual Date": The Accrual Date shall be January 1, 1999.
"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 Assets (including
Assets in respect of which the related Manufactured Home or Mortgaged Property
has been repossessed or foreclosed upon 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 Assets
(including Assets in respect of which the related Manufactured Home or Mortgaged
Property has been repossessed or foreclosed upon 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 and Class M 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
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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.
"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-1
Adjusted Certificate Principal Balance, the Class M-2 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-1
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.
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"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-1
Adjusted Certificate Principal Balance, the Class M-2 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-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) 0.75% 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-1 Adjusted
Certificate Principal Balance, the Class M-2 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,
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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 Distribution Amount, next to the
Class M-2 Principal Distribution Amount, next to the Class M-1 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-1 Certificates and Class M-2
Certificates.
"Class M-1 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-1 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-1 Adjusted
Certificate Principal Balance, the Class M-2 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-1 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-1 Percentage of the Principal Distribution Amount. For any Distribution Date,
if the Class M-1 Principal Distribution Amount exceeds the Class M-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 M-2 Principal Distribution Amount.
"Class M-2 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-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-1 Adjusted
Certificate Principal Balance, the Class M-2 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.
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"Class M-2 Principal Distribution Amount": For any Distribution Date
will equal (i) as long as the Class A Certificate Principal Balance and the
Class M-1 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-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 and
the Class M-1 Certificate Balance have been reduced to zero, the Principal
Distribution Amount, or (iv) on any other Distribution Date, the Class M-2
Percentage of the Principal Distribution Amount. For any Distribution Date, if
the Class M-2 Principal Distribution Amount exceeds the Class M-2 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": Either or all, as appropriate, of the Class M-1
or Class M-2 Subaccounts.
"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.
"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 Asset Rate and the weighted average of the Pass-Through Rates on the
Class A, Class M and Class B Certificates.
"Closing Date": February 2, 1999.
"Corporate Trust Office": The address set forth below under "Trustee".
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"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, 2004 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 as of the first day of the related Collection Period, equals
or exceeds 1.90 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 plus the Current
Overcollateralization Amount as of the Closing Date 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
Assets 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 average of the Pool
Scheduled Principal Balances for such Distribution Date and the preceding two
Distribution Dates.
"Cut-off Date": January 1, 1999
"ERISA Restricted Certificates": The Class M, Class B, 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 Deficiency Amount": With respect to the Class M-1
Certificates, the Class M-2 Certificates, the Class B-1 Certificates or the
Class B-2 Certificates and any Distribution Date, the sum of any of the Interest
Distribution Amount, Carryover Interest Distribution Amount, Writedown Interest
Distribution Amount and Carryover Writedown Interest Distribution Amount for
such Class
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that would remain unpaid after application of the Available Distribution Amount
in accordance with Section 5(b) hereof.
"Interest Deficiency Withdrawal": With respect to any Distribution Date
and the:
(i) Class M-1 Certificates, the lesser of (A) the applicable
Interest Deficiency Amount, (B) the positive difference, if any, between
$229,045 and the sum of all previous Interest Deficiency Withdrawals made with
respect to the Class M-1 Certificates and (C) the amount remaining on deposit in
the Certificate Account after withdrawal of the Remittance Amount and amounts
withdrawn therefrom pursuant to Section 4.02(b)(1) through (4) of the Standard
Terms;
(ii) Class M-2 Certificates, the lesser of (A) the applicable
Interest Deficiency Amount, (B) the positive difference, if any, between
$175,501 and the sum of all previous Interest Deficiency Withdrawals made with
respect to the Class M-2 Certificates and (C) the amount remaining on deposit in
the Certificate Account after withdrawal of the Remittance Amount and amounts
withdrawn therefrom pursuant to Section 4.02(b)(1) through (4) of the Standard
Terms;
(iii) Class B-1 Certificates, the lesser of (A) the applicable
Interest Deficiency Amount, (B) the positive difference, if any, between
$181,730 and the sum of all previous Interest Deficiency Withdrawals made with
respect to the Class B-1 Certificates and (C) the amount remaining on deposit in
the Certificate Account after withdrawal of the Remittance Amount and amounts
withdrawn therefrom pursuant to Section 4.02(b)(1) through (4) of the Standard
Terms; and
(iv) Class B-2 Certificates, the lesser of (A) the applicable
Interest Deficiency Amount, (B) the positive difference, if any, between
$172,168 and the sum of all previous Interest Deficiency Withdrawals made with
respect to the Class B-2 Certificates and (C) the amount remaining on deposit in
the Certificate Account after withdrawal of the Remittance Amount and amounts
withdrawn therefrom pursuant to Section 4.02(b)(1) through (4) of the Standard
Terms.
"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.
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"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 Certificates.
"Overcollateralization Reduction Amount": For any Distribution Date,
the excess, if any, of the Current Overcollateralization Amount over the Target
Overcollateralization Amount; provided, however, that if on any Distribution
Date the Principal Distribution Tests are not satisfied, then the
Overcollateralization Reduction Amount for such Distribution Date shall be zero.
"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 Assets and the
Distribution Account.
"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 Assets
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 Assets during the related Prepayment
Period; (c) with respect to any related Asset 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 Asset 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
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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 2004 through January 2005 7%
February 2005 through January 2006 8%
February 2006 and after 9%;
</TABLE>
and (d) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 2.75%.
"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 Standard and Poor's, a division of The
McGraw-Hill Companies, Inc.. (25 Broadway, 12th Floor, New York, New York 10004)
and Moody's Investors Service, Inc. (99 Church Street, New York, New York
10007).
"Regular Certificates": The Class A Certificates, Class M Certificates,
Class B Certificates and Class X Certificates.
"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.
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"Rule 144A Certificates": The Class B-1, 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:
<TABLE>
<CAPTION>
INITIAL
PASS-THROUGH SUBACCOUNT
SUBACCOUNT RATE PRINCIPAL BALANCE
---------- ---- -----------------
<S> <C> <C>
A-1 (1) $35,000,000
A-2 (1) $31,000,000
A-3 (1) $22,000,000
A-4 (1) $34,000,000
A-5 (1) $14,375,000
M-1 (1) $13,503,000
M-2 (1) $ 9,002,000
B-1 (1) $ 8,552,000
B-2 (1) $ 8,102,000
</TABLE>
(1) The Pass-Through Rate on each Subaccount for any Distribution Date
shall be equal to the Weighted Average Net Asset Rate.
For purposes of Treasury Regulation 'SS' 1.860G-l(a)(4), the latest
possible maturity date for each of the Subaccounts shall be the March 2029
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, Class X and Residual
Certificates.
"Target Overcollateralization Amount": Shall mean (i) for any
Distribution Date prior to the Cross-over Date, 4.75% of the Pool Scheduled
Principal Balance as of the Cut-off Date, and (ii) for any other Distribution
Date, the lesser of (x) 4.75% of the Pool Scheduled Principal Balance as of the
Cut-off Date and (y) 8.3125% 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 1.25% of the Pool Scheduled
Principal Balance as of the Cut-off Date.
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"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 Prudential Securities Incorporated (whose
address is One New York Plaza, New York, New York 10292) and Credit Suisse First
Boston Corporation (whose address is 11 Madison Avenue, New York, New York
10010).
"Weighted Average Net Asset Rate": With respect to any Distribution
Date, the weighted average of the Asset Rates applicable to the Monthly Payments
that were due during the related Collection Period on Assets 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 Assets 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
$175,534,000 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
eleven Classes having the designations, initial Certificate Principal Balances,
Pass-Through Rates and Final Scheduled Distribution Dates set forth or described
below:
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<PAGE>
<TABLE>
<CAPTION>
INITIAL FINAL
CERTIFICATE PASS SCHEDULED
PRINCIPAL THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(12)
----------- ------- ---- --------
<S> <C> <C> <C>
A-1 $35,000,000 (1) February 15, 2010
A-2 $31,000,000 (2) February 15, 2015
A-3 $22,000,000 (3) January 15, 2018
A-4 $34,000,000 (4) November 15, 2025
A-5 $14,375,000 (5) March 15, 2029
M-1 $13,503,000 (6) March 15, 2029
M-2 $ 9,002,000 (7) March 15, 2029
B-1 $ 8,552,000 (8) March 15, 2029
B-2 $ 8,102,000 (9) March 15, 2029
X (10) March 15, 2029
R (11) March 15, 2029
</TABLE>
(1) The Pass-Through Rate on the Class A-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 5.825% per annum and (ii)
the Weighted Average Net Asset Rate.
(2) The Pass-Through Rate on the Class A-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 5.795% per annum and (ii)
the Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class A-3 Certificates for any
Distribution Date shall be equal to the lesser of (i) 5.980% per annum and (ii)
the Weighted Average Net Asset Rate.
(4) The Pass-Through Rate on the Class A-4 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.475% per annum and (ii)
the Weighted Average Net Asset Rate.
(5) The Pass-Through Rate on the Class A-5 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.700% per annum and (ii)
the Weighted Average Net Asset Rate.
(6) The Pass-Through Rate on the Class M-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.785% per annum and (ii)
the Weighted Average Net Asset Rate.
(7) The Pass-Through Rate on the Class M-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.665% per annum and (ii)
the Weighted Average Net Asset Rate.
(8) The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.500% per annum and (ii)
the Weighted Average Net Asset Rate.
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(9) The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.500% per annum and (ii)
the Weighted Average Net Asset Rate.
(10) 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.
(11) 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.
(12) For purposes of Treasury Regulation 'SS' 1.860G-1(a)(4), the latest
possible maturity date of each Class of Certificates shall be the March 2029
Distribution Date.
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
Certificates.
The Class B-1 Certificates, Class B-2 Certificates, the Class X
Certificates and the Residual Certificates will be issued in certificated, fully
registered form. The Class B-1 Certificates and 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 of each such class 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, 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 related Priority Interest Distribution Amount for such Distribution
Date, with the Available Distribution
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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-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;
(iii) Third, to the Class M-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;
(iv) Fourth, 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;
(v) Fifth, 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;
(vi) Sixth, 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 Balance
of their respective Corresponding Certificate;
(vii) Seventh, 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;
(viii) Eighth, to the Class M-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;
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(ix) Ninth, to the Class M-1 Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class M-1 Subaccount, if
any, for such Distribution Date;
(x) Tenth, to the Class M-1 Subaccount, the Class M-1 Principal
Distribution Amount, in reduction of the Subaccount Principal Balance of
such Class, until it is reduced to zero;
(xi) Eleventh, to the Class M-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;
(xii) Twelfth, to the Class M-2 Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class M-2 Subaccount, if
any, for such Distribution Date;
(xiii) Thirteenth, to the Class M-2 Subaccount, the Class M-2
Principal Distribution Amount, in reduction of the Subaccount Principal
Balance of such Class, until it is reduced to zero;
(xiv) Fourteenth, 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;
(xv) Fifteenth, 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;
(xvi) Sixteenth, 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;
(xvii) Seventeenth, 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;
(xviii) Eighteenth, 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;
(xix) Nineteenth, 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;
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(xx) Twentieth, 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
(xxi) 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, the related 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-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;
(iii) Third, to the Class M-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;
(iv) Fourth, 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;
(v) Fifth, 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;
(vi) Sixth, 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;
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(vii) Seventh, 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;
(viii) Eighth, to the Class M-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;
(ix) Ninth, to the Class M-1 Certificates, the related Principal
Distribution Shortfall Carryover Amount for the Class M-1 Certificates,
if any, for such Distribution Date;
(x) Tenth, to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount, in reduction of the Certificate Principal Balance
of such Class, until it is reduced to zero;
(xi) Eleventh, to the Class M-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;
(xii) Twelfth, to the Class M-2 Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class M-2
Certificates, if any, for such Distribution Date;
(xiii) Thirteenth, to the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, in reduction of the Certificate Principal
Balance of such Class, until it is reduced to zero;
(xiv) Fourteenth, 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;
(xv) Fifteenth, 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;
(xvi) Sixteenth, 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;
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(xvii) Seventeenth, 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;
(xviii) Eighteenth, 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;
(xix) Nineteenth, 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;
(xx) Twentieth, 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 Class, until it
is reduced to zero;
(xxi) Twenty-first, 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
(xxii) Finally, any remainder to the holders of the Issuing REMIC
Residual Interest.
(c) On each Distribution Date for which the applicable Remittance Report
indicates that one or more Interest Deficiency Withdrawals is required, after
making the withdrawals and applications described in Section 5.02(a) and (b),
the Trustee (or the Paying Agent on behalf of the Trustee) shall withdraw from
the Certificate Account and allocate the Interest Deficiency Withdrawal, based
upon the information set forth in the related Remittance Report, in the
following manner and in the following order of priority:
(i) to the Class M-1 Subaccount, the Interest Deficiency
Withdrawal for such Class, if any;
(ii) to the Class M-2 Subaccount, the Interest Deficiency
Withdrawal for such Class, if any;
(iii) to the Class B-1 Subaccount, the Interest Deficiency
Withdrawal for such Class, if any;
(iv) to the Class B-2 Subaccount, the Interest Deficiency
Withdrawal for such Class, if any; and
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(v) Finally, any remainder to Holders of the Pooling REMIC
Residual Interest.
(d) On each Distribution Date, after all Subaccount allocations have
been made as described in Section 5(c) above, the Trustee (or the Paying Agent
on behalf of the Trustee) shall withdraw all amounts allocated to the various
Subaccounts pursuant to Section 5(c) above, 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) to the Class M-1 Certificates, the Interest Deficiency
Withdrawal for such Class, if any;
(ii) to the Class M-2 Certificates, the Interest Deficiency
Withdrawal for such Class, if any;
(iii) to the Class B-1 Certificates, the Interest Deficiency
Withdrawal for such Class, if any;
(iv) to the Class B-2 Certificates, the Interest Deficiency
Withdrawal for such Class, if any; and
(v) Finally, any remainder to the holders of the Issuing REMIC
Residual Interest.
(e) 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, Class M or Class B Certificates issued after
the Closing Date in certificated, fully-registered form, the registered owner of
Class A, Class M 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.
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(f) (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;
(c) Third, to the Class M-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; and
(d) Finally, to the Class M-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.
Writedown Amounts allocated to the Class B-2, Class B-1, Class M-2 and
Class M-1 Subaccounts pursuant to this Section 6 shall be allocated to the Class
B-2, Class B-1, Class M-2 and Class M-1 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
23
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<PAGE>
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 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
24
<PAGE>
<PAGE>
on the Corresponding Subaccount), after giving effect to all
distributions to be made on such Distribution Date;
(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;
(9) the Target Overcollateralization Amount, Current
Overcollateralization Amount, the Overcollateralization Reduction
Amount, if any, and the Accelerated Principal Distribution Amount, if
any;
(10) the Interest Deficiency Withdrawal, if any, for each of the
Class M-1, Class M-2, Class B-1 and Class B-2 Certificates; and
(11) The aggregate number and the aggregate of the unpaid
principal balances of Assets that became Liquidated Assets during the
related Collection Period.
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 Prudential Securities Incorporated). The Trustee shall not be
obligated to mail any Remittance Report to The Bloomberg unless and until
Prudential Securities Incorporated 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.
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
25
<PAGE>
<PAGE>
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.
(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
F and Exhibit G 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.
26
<PAGE>
<PAGE>
(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.
(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. VOTING RIGHTS.
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 12. 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 13. 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 14. 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.
27
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<PAGE>
SECTION 15. 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.
28
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<PAGE>
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:
_______________________________________________
Name:
Title:
By:
_______________________________________________
Name:
Title:
BOMBARDIER CAPITAL INC.
By:
_______________________________________________
Name:
Title:
By:
_______________________________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
By:
_______________________________________________
Name:
Title:
29
<PAGE>
<PAGE>
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 F Form of Class R-1 Certificate
Exhibit G Form of Class R-2 Certificate
Schedule I Asset Schedule
<PAGE>
<PAGE>
EXHIBIT A
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 1999-A
CLASS A-___ PASS-THROUGH CERTIFICATE
THIS CLASS A-___ 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.
<TABLE>
<S> <C>
PASS-THROUGH RATE: CALCULATED AS CERTIFICATE PRINCIPAL BALANCE OF
DESCRIBED HEREIN THE CLASS A-___ CERTIFICATES AS OF
THE CLOSING DATE: $_____________
DENOMINATION: $_____________
DATE OF POOLING AND SERVICER: BOMBARDIER CAPITAL
SERVICING AGREEMENT: INC.
AS OF JANUARY 1, 1999
CLOSING DATE: February 2, 1999
FIRST DISTRIBUTION DATE: TRUSTEE: HARRIS TRUST AND
February 16, 1999 SAVINGS BANK
NO. 1 CUSIP NO.: __________
</TABLE>
A-1
<PAGE>
<PAGE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS A-___ PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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-___ Certificates issued by BCMSC Trust 1999-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 1999 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 1999 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
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-___ Certificates for any
Distribution Date will be equal to the lesser of _____% per annum and 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 A-___ 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.
A-2
<PAGE>
<PAGE>
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 1999-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-___ Certificates. The Certificates are issued in eleven 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, next to the Class M-2 Certificates, and
finally to the Class M-1 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 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
A-3
<PAGE>
<PAGE>
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 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 Certificates is less
than or equal to 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
A-4
<PAGE>
<PAGE>
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.
A-5
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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 A-___ CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: __________________________
AUTHORIZED OFFICER
A-6
<PAGE>
<PAGE>
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.
A-7
<PAGE>
<PAGE>
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.
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<PAGE>
EXHIBIT B
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 (OTHER THAN THOSE RELYING ON PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ("PTCE 95-60")), AND EACH PURCHASER OF A CLASS M-___ CERTIFICATE, BY
VIRTUE OF ITS PURCHASE OF SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED
THAT EITHER (I) IT IS NOT A PLAN INVESTOR, OR (II) IT IS AN INSURANCE COMPANY
GENERAL ACCOUNT WHICH IS ENTITLED TO THE EXEMPTION SET FORTH IN SECTION III OF
PTCE 95-60.
[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 1999-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.
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<TABLE>
<S> <C>
PASS-THROUGH RATE: CALCULATED AS CERTIFICATE PRINCIPAL BALANCE OF THE
DESCRIBED HEREIN CLASS M-___ CERTIFICATES AS OF THE
CLOSING DATE: $_____________
DENOMINATION: $_____________ SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND SERVICING TRUSTEE: HARRIS TRUST AND SAVINGS
AGREEMENT: AS OF JANUARY 1, 1999 BANK
CLOSING DATE: February 2, 1999
FIRST DISTRIBUTION DATE:
February 16, 1999
NO. 1 CUSIP NO.: __________
</TABLE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS M-___ PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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 1999-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 1999 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
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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 1999 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
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 _____% per annum and 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 1999-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 eleven 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-1 Certificates will be subordinated to the Class A-1,
Class A-2, Class A-3, Class A-4 and Class A-5 Certificates, and the Class M-2,
Class B-1, Class B-2, Class X and Class R Certificates will be subordinated to
the Class M-1Certificates, 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, next to the Class M-2 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 for purposes other than distributions to Holders, such
purposes including reimbursement of
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<PAGE>
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 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, other than those
relying on Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"). 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 either (i)
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<PAGE>
it is not a Plan Investor or (ii) it is an insurance company general account
which is entitled to the exemption set forth in Section III of PTCE 95-60.
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 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 or equal to 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.
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<PAGE>
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.
B-6
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<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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
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<PAGE>
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.
B-8
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<PAGE>
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.
B-9
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<PAGE>
EXHIBIT C
CLASS B-___ CERTIFICATE
BECAUSE THE CLASS B-___ 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-___ 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-___ CERTIFICATES ARE OFFERED FOR SALE, AND ARE NOT TRANSFERABLE, TO PLAN
INVESTORS (OTHER THAN THOSE RELYING ON PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ("PTCE 95-60")), AND EACH PURCHASER OF A CLASS B-___ CERTIFICATE, BY
VIRTUE OF ITS PURCHASE OF SUCH CERTIFICATE, WILL BE DEEMED TO HAVE REPRESENTED
THAT EITHER (I) IT IS NOT A PLAN INVESTOR, OR (II) IT IS AN INSURANCE COMPANY
GENERAL ACCOUNT WHICH IS ENTITLED TO THE EXEMPTION SET FORTH IN SECTION III OF
PTCE 95-60.
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 DEPOSITOR AND THE SERVICER A TRANSFEREE AGREEMENT
CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS AND AN AFFIDAVIT OF THE
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 CLASS B-___ CERTIFICATES ARE SUBORDINATED TO THE CLASS A 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 1999-A
CLASS B-___ PASS-THROUGH CERTIFICATE
THIS CLASS B-___ 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.
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<TABLE>
<S> <C>
PASS-THROUGH RATE: CALCULATED AS CERTIFICATE PRINCIPAL BALANCE OF THE
DESCRIBED HEREIN CLASS B-___ CERTIFICATES AS OF THE
CLOSING DATE: $____________
DENOMINATION: $____________ SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND SERVICING TRUSTEE: HARRIS TRUST AND SAVINGS
AGREEMENT: AS OF JANUARY 1, 1999 BANK
CLOSING DATE: February 2, 1999
FIRST DISTRIBUTION DATE:
February 16, 1999
NO. 1 CUSIP NO.: __________
</TABLE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS B-___ PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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 B-___ Certificates issued by BCMSC Trust 1999-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 1999 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
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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 1999 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
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-___ Certificates for any
Distribution Date will be equal to the lesser of _____% per annum and 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-___ 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 1999-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-___ Certificates. The Certificates are issued in eleven 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-___ Certificates will be subordinated to the Class A and
Class M Certificates, and the Class B-2, Class X and Class R Certificates will
be subordinated to the Class B-___ 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-___ Certificates, next to the Class M-2 Certificates, and
finally to the Class M-1 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 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.
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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 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 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-___ Certificates may
be made to a proposed transferee that is a Plan Investor, other than those
relying on Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"). 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 either (i) it is not a Plan Investor or (ii) it is an
insurance company general account which is entitled to the exemption set forth
in Section III of PTCE 95-60.
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
C-4
<PAGE>
<PAGE>
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.
No transfer of any Class B-___ 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 B-___
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 B-___ 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 B-___ Certificate to or on behalf of a Plan
Investor without delivery of a Benefit Plan Opinion shall be null and void.
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 or equal to 10% of the sum of the original Certificate Principal Balances
of
C-5
<PAGE>
<PAGE>
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.
C-6
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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-___ CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED POOLING AND SERVICING AGREEMENT.
HARRIS TRUST AND SAVINGS BANK,
AS TRUSTEE
BY: _____________________________
AUTHORIZED OFFICER
C-7
<PAGE>
<PAGE>
EXHIBIT D
CLASS X CERTIFICATE
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-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 DEPOSITOR AND THE SERVICER A TRANSFEREE AGREEMENT
CONTAINING CERTAIN REPRESENTATIONS AND COVENANTS AND AN AFFIDAVIT OF THE
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.
<TABLE>
<S> <C>
PERCENTAGE INTEREST: 100% SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND SERVICING
AGREEMENT: AS OF JANUARY 1, 1999
CLOSING DATE: February 2, 1999 TRUSTEE: HARRIS TRUST AND SAVINGS
BANK
FIRST DISTRIBUTION DATE:
February 16, 1999
NO. 1
</TABLE>
<PAGE>
<PAGE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS X PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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 1999-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 1999 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 1999 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 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.
D-2
<PAGE>
<PAGE>
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 1999-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 eleven
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 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
D-3
<PAGE>
<PAGE>
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 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.
D-4
<PAGE>
<PAGE>
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 or equal to 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.
D-5
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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
D-6
<PAGE>
<PAGE>
EXHIBIT E
CLASS R CERTIFICATE
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-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 DEPOSITOR 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.
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.
<PAGE>
<PAGE>
<TABLE>
<S> <C>
PERCENTAGE INTEREST: 100% SERVICER: BOMBARDIER CAPITAL
INC.
DATE OF POOLING AND
SERVICING AGREEMENT:
AS OF JANUARY 1, 1999
CLOSING DATE: February 2, 1999 TRUSTEE: HARRIS TRUST AND
SAVINGS BANK
FIRST DISTRIBUTION DATE:
February 16, 1999
NO. 1
</TABLE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS R PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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 R Certificates issued by BCMSC Trust 1999-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 1999 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.
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<PAGE>
<PAGE>
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 1999 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 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 1999-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 eleven
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 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
E-3
<PAGE>
<PAGE>
"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).
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
E-4
<PAGE>
<PAGE>
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 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.
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
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<PAGE>
<PAGE>
(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.
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 or equal to 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.
E-6
<PAGE>
<PAGE>
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.
E-7
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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
E-8
<PAGE>
<PAGE>
EXHIBIT F
Form of Class R-1 Certificate
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-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 DEPOSITOR 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>
<PAGE>
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.
<TABLE>
<S> <C>
PERCENTAGE INTEREST: N/A SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND
SERVICING AGREEMENT:
AS OF JANUARY 1, 1999
CLOSING DATE: FEBRUARY 2, 1999 TRUSTEE: HARRIS TRUST AND
SAVINGS BANK
FIRST DISTRIBUTION DATE:
FEBRUARY 15, 1999
NO. 1
</TABLE>
F-2
<PAGE>
<PAGE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS R PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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 R Certificates issued by BCMSC Trust 1999-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 1999 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 1999 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 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
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<PAGE>
<PAGE>
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 1999-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 eleven
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 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
F-4
<PAGE>
<PAGE>
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).
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 governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
F-5
<PAGE>
<PAGE>
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.
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
F-6
<PAGE>
<PAGE>
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.
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 or equal to 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
F-7
<PAGE>
<PAGE>
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.
F-8
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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
F-9
<PAGE>
<PAGE>
EXHIBIT G
Form of Class R-2 Certificate
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-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 DEPOSITOR 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>
<PAGE>
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.
<TABLE>
<S> <C>
PERCENTAGE INTEREST: N/A SERVICER: BOMBARDIER CAPITAL INC.
DATE OF POOLING AND
SERVICING AGREEMENT:
AS OF JANUARY 1, 1999
CLOSING DATE: FEBRUARY 2, 1999 TRUSTEE: HARRIS TRUST AND
SAVINGS BANK
FIRST DISTRIBUTION DATE:
FEBRUARY 15, 1999
NO. 1
</TABLE>
G-2
<PAGE>
<PAGE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1999-A
CLASS R PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists primarily of
a pool of installment contracts and mortgage loans 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 1999-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 1999 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 1999 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 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
G-3
<PAGE>
<PAGE>
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 1999-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 eleven
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 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
G-4
<PAGE>
<PAGE>
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).
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 governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
G-5
<PAGE>
<PAGE>
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.
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
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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.
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 or equal to 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
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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.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of BCMSC Trust 1999-A.
Dated: February 2, 1999 BCMSC TRUST 1999-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
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SCHEDULE I
ASSET SCHEDULE
On file with the Servicer.
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________________________________________________________________________________
STANDARD TERMS
TO
POOLING AND SERVICING AGREEMENT
_______________________________________________________________
Bombardier Capital Mortgage Securitization Corporation
Pass-Through Certificates
January 1999 Edition
________________________________________________________________________________
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..............................................................................1
Section 1.01. Definitions...............................................................1
ARTICLE II
THE ASSETS..............................................................................30
Section 2.01. Assignment of Assets.....................................................30
Section 2.02. The Contracts............................................................31
Section 2.03. The Mortgage Loans.......................................................34
Section 2.04. Representations and Warranties of the Trustee............................37
Section 2.05. Representations and Warranties as to Assets..............................38
Section 2.06. Purchase or Substitution of Certain Assets...............................38
ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS....................................43
Section 3.01. The Servicer.............................................................43
Section 3.02. Maintenance of Records; Inspection of Asset Files........................45
Section 3.03. Collection of Payments on Assets; Servicing Delinquent Accounts..........46
Section 3.04. Advances.................................................................46
Section 3.05. [Reserved]...............................................................47
Section 3.06. Certificate Account......................................................47
Section 3.07. Withdrawals From Certificate Account; Remittance Amounts.................48
Section 3.08. Realization upon Defaulted Assets........................................49
Section 3.09. Title, Conservation, and Disposition of Repo Property
and REO Property..................................................51
Section 3.10. Full Prepayments and Liquidations; Trustee to Cooperate;
Release of Mortgage Files.........................................54
Section 3.11. Maintenance of Security Interests and Other Liens in
Manufactured Homes................................................55
Section 3.12. Due-on-Sale Clauses and Assumption Agreements............................56
Section 3.13. Annual Accountants' Certificate; Annual Statement as to
Compliance........................................................56
Section 3.14. Servicing Fees...........................................................57
Section 3.15. Late Charges; Prepayment Fees or Other Charges...........................58
Section 3.16. Maintenance of Standard Hazard Insurance, Primary
Mortgage Insurance, and Errors and Omissions Coverage.............58
Section 3.17. Escrow Accounts..........................................................60
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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
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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
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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
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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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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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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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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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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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payments of principal and interest on such Asset made with respect to such Due
Date exceed (2) the scheduled Monthly Payment for such Asset on such Due Date
plus any unpaid Monthly Payments for previous Due Dates.
"Eligible Account": A [segregated trust] account maintained (1) at a
depository institution organized under the laws of the United States or any
state, the deposits of which are insured to the full extent permitted by law by
the Federal Deposit Insurance Corporation, whose commercial paper or long-term
unsecured debt has a rating sufficient to support the ratings requested on the
Certificates of the related Series, and which institution is subject to
examination by federal or state authorities; (2) in the corporate trust
department of the Trustee; or (3) at an institution otherwise acceptable to each
applicable Rating Agency.
"Eligible Investments": Any one or more of the following obligations or
securities:
(a) direct obligations of, and obligations fully guaranteed by, the
United States of America;
(b) demand and time deposits in, negotiable certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by, any Qualified Bank;
(c) securities bearing interest or sold at a discount or commercial
paper of any Person other than the Company, the Seller or any Affiliate of the
Company or the Seller; provided, however, that such securities or commercial
paper shall be rated in the highest applicable rating category;
(d) repurchase agreements fully collateralized by possession of
obligations of the type specified in clause (a) above; provided, however, that
investments in such repurchase agreements shall mature within three days of the
acquisition thereof and; provided further, that such agreements shall be entered
into with a Qualified Bank;
(e) money market accounts or money market funds (including, without
limitation, funds for which the Trustee or any Affiliate is investment manager
or advisor), provided, however, that such money market accounts or money market
funds shall be rated in the highest applicable rating category; or
(f) money market accounts or money market mutual funds investing
primarily in obligations of the United States government, and further investing
exclusively in debt obligations (including, without limitation, funds for which
the Trustee or any Affiliate is investment manager or advisor), provided,
however, that such money market accounts or money market mutual funds shall be
rated in the highest applicable rating category.
The foregoing notwithstanding, Eligible Investments that are acquired with funds
in the Certificate Account, the Distribution Account or any Reserve Fund shall
include only such obligations or securities that mature on or before the
Business Day immediately preceding the next Distribution
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Date provided, however, that Eligible Investments specified in clauses (e) and
(f) above may mature on such Distribution Date. In no event shall an instrument
be an Eligible Investment if such instrument evidences (1) a right to receive
only interest payments with respect to the obligations underlying such
instrument or (2) both principal and interest payments derived from obligations
underlying such instrument, if the interest and principal payments with respect
to such instrument provide a yield to maturity at the date of investment of
greater than 120% of the yield to maturity at par of such underlying
obligations.
"Environmental Law": Environmental Law shall mean any and all federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or
health or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Restricted Certificates": With respect to any Series, any
Certificates of a Class that are subordinated to the Certificates of any other
Class of such Series with respect to the allocation of Writedown Amounts, or, if
the related Pooling and Servicing Agreement does not provide for the allocation
of Writedown Amounts, the Certificates designated as "ERISA Restricted
Certificates" in the related Pooling and Servicing Agreement.
"Event of Default": As defined in Section 7.01 hereof.
"FHA": The Federal Housing Administration.
"FHA Asset": An Asset that is insured by the FHA.
"FHA Insurance": As to any FHA Asset, FHA's agreement to reimburse the
owner of such Asset for the amount of any losses incurred upon the liquidation
of such Asset.
"FHLMC": Federal Home Loan Mortgage Corporation.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-B hereto
provided by the Trustee (or the Custodian) on or before the first anniversary of
the Closing Date pursuant to Section 2.03(c)(2) hereof.
"Final Scheduled Distribution Date": With respect to any Class of any
Series, the date specified as such in the related Pooling and Servicing
Agreement.
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"FNMA": Federal National Mortgage Association.
"Fraud Loss": A loss incurred on a Contract or Mortgage Loan resulting
from a Credit Insurer's failure to pay a claim with respect to such Contract or
Mortgage Loan on the grounds of fraud in connection with the origination of the
Contract or Mortgage Loan or on the grounds of fraud, dishonesty or
misrepresentation in connection with the application for any insurance obtained
with respect to such Contract or Mortgage Loan.
"GPM Fund": A custodial Eligible Account established by the Servicer for
any GPM Loan, which must comply with the standards applicable to the related
Certificate Account, to be funded with an amount which, together with projected
reinvestment earnings thereon at a rate specified in the related Pooling and
Servicing Agreement, will provide funds sufficient to support the payments
required on such GPM Loan on a level debt service basis.
"GPM Loan": A "graduated payment" Asset the terms of which provide for
Monthly Payments during the initial years of its term that are less than the
actual amount of principal and interest that would be payable on a level debt
service basis.
"Independent": When used with respect to any specified Person, another
Person who (a) is in fact independent of the Company, the Seller, the Servicer,
any obligor upon the Certificates or any Affiliate of the Company, the Seller or
the Servicer or such obligor, (b) does not have any direct financial interest or
any material indirect financial interest in the Company, the Seller or the
Servicer or in any such obligor or in an Affiliate of the Company, the Seller or
the Servicer or such obligor, and (c) is not connected with the Company, the
Seller or the Servicer or any such obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is provided herein that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person shall be appointed by
the Company, the Seller or the Servicer in the exercise of reasonable care by
the Company, the Seller or the Servicer, as the case may be, and such opinion or
certificate shall state that the Person executing the same has read this
definition and that such Person is independent within the meaning thereof.
"Independent Contractor": Either (a) any Person (other than the
Servicer) that would be an "independent contractor" with respect to the Trust
within the meaning of Section 856(d)(3) of the Code if the Trust were a real
estate investment trust (except that, in applying that Section, more than 35% of
the outstanding principal balance of any Class shall be deemed to be more than
35% of the certificates of beneficial interest of the Trust), so long as the
Trust does not receive or derive any income from such Person, the relationship
between such Person and the Trust is at arm's length and such Person is not an
employee of the REMIC, the Trustee or the Servicer, all within the meaning of
Treasury Regulation Section 1.856-4(b)(5), or (b) any other Person (including
the Servicer) upon receipt by the Trustee of an Opinion 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
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to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-A hereto
provided by the Trustee (or the Custodian) on the Closing Date pursuant to
Section 2.03(c)(1) hereof.
"Initial Value": As defined in Section 3.16(b) hereof.
"Insurance Policy": Any insurance policy covering any Asset (or the
related Manufactured Home or Mortgaged Property), including, without limitation,
any Standard Hazard Insurance Policy or Primary Mortgage Insurance Policy or FHA
Insurance or VA Guaranty.
"Insurance Proceeds": Amounts paid or payable (as the context requires)
under any Insurance Policy, to the extent such amounts are not applied to the
restoration or repair of the Manufactured Home or Mortgaged Property in respect
of which such amounts were paid.
"Insured Expenses": Expenses incurred by the Servicer in connection with
a Contract or Mortgage Loan under which the Obligor is in default, which
expenses are covered by a Standard Hazard Insurance Policy and are paid by an
insurer under any such policy.
"Interest Accrual Period": With respect to each Distribution Date (i)
for any Class of Certificates paying interest at a variable rate, the period
commencing on the 15th day of the preceding month through the 14th day of the
month in which such Distribution Date occurs (except that the first Interest
Accrual Period for such Class of Certificates will be the period from the
related Closing Date through the 14th day of the month in which such
Distribution Date occurs) and (ii) for all other Classes of Certificate, the
calendar month preceding the month in which the Distribution Date occurs.
Interest on any Class of Certificates paying interest at a variable rate will be
calculated on the basis of a 360-day year and the actual number of days elapsed
in the applicable Interest Accrual Period. Interest on all other Classes of
Certificates will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Interest Deficiency Withdrawal": With respect to any Series, the
meaning, if applicable, specified in the related Pooling and Servicing
Agreement.
"Issuing REMIC": If provided for in a Pooling and Servicing Agreement,
the REMIC composed primarily of Regular Interests in the Pooling REMIC, together
with the Distribution Account.
"Land Secured Contract": A Contract secured at origination by a parcel
of real estate in addition to a Manufactured Home.
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"Liquidated Asset": A Defaulted Contract or defaulted Mortgage Loan as
to which all amounts that the Servicer expects to recover through the date of
disposition of the related Manufactured Home or Mortgaged Property have been
received.
"Liquidation Expenses": All reasonable, out-of-pocket costs and expenses
(exclusive of the Servicer's overhead costs) incurred by the Servicer in
connection with liquidation of any Asset or disposition of any related Repo
Property or REO Property, including, but not limited to, the cost of all notices
sent in connection with such liquidation, costs and expenses incurred in
connection with preparation and recordation of assignments of Mortgages relating
to Land Secured Contracts, expenses, including reasonable attorney's fees,
incurred in connection with the commencement and pursuit of Proceedings against
Obligors or guarantors or sureties of Obligors or in the pursuit of foreclosure
or other similar remedies, expenses incurred in repossessing and refurbishing
the related Manufactured Home or preparing the related REO Property for sale and
sales commissions paid in connection with the resale of the related Manufactured
Home or REO Property.
"Liquidation Proceeds": Amounts received and retained in connection with
the liquidation of Liquidated Assets, whether through foreclosure thereon or
repossession and resale of the related Manufactured Home, foreclosure on the
related Mortgaged Property or otherwise (including Insurance Proceeds collected
in connection with such liquidation).
"Loan-to-Value Ratio": The Contract Loan-to-Value Ratio or the Mortgage
Loan-to-Value Ratio of an Asset, as applicable.
"Manufactured Home": A unit of manufactured housing (within the meaning
of Code section 25(e)(10)) together with all accessions thereto securing the
indebtedness of the Obligor under any Contract or constituting a portion of the
Mortgaged Property securing the indebtedness of the Obligor under any Mortgage
Loan.
"Monthly Payment": With respect to any Asset, the scheduled monthly
payment of principal and interest thereon due in any month under the terms
thereof.
"Mortgage": A written instrument creating a valid first lien on Real
Property or a Mortgaged Property, in the form of a mortgage, deed of trust, deed
to secure debt or security deed, including any riders or addenda thereto.
"Mortgage Insurer": The insurance company or companies which issue any
Primary Mortgage Insurance Policies with respect to any Mortgage Loans.
"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).
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"Mortgage Loan Documents": With respect to each Mortgage Loan, the
following documents:
(a) the original Mortgage Note bearing a complete chain of endorsements,
if necessary, from the initial payee thereunder to the Seller, with a further
endorsement without recourse from the Seller in blank or to the Trustee or its
Custodian, in a form specified in the related Sales Agreement, together with all
related riders and addenda and any related surety or guaranty agreement, power
of attorney and buy-down agreement;
(b) the original recorded Mortgage (or a copy thereof certified to be a
true and correct reproduction of the original thereof by the appropriate public
recording office) with evidence of recordation noted thereon or attached
thereto, or, if the Mortgage is in the process of being recorded, a photocopy of
the Mortgage, certified by an officer of the related Seller or the originator,
the related title insurance company, the related closing/settlement/escrow agent
or the related closing attorney to be a true and correct copy of the Mortgage
submitted for recordation;
(c) the original recorded assignment of the Mortgage from the related
Seller to the Trustee or its Custodian, in a form specified in the related Sales
Agreement (or a copy thereof certified to be a true and correct reproduction of
the original thereof by the appropriate public recording office) with evidence
of recordation noted thereon or attached thereto, or, if the assignment is in
the process of being recorded, a photocopy of the assignment, certified by an
officer of the Seller to be a true and correct copy of the assignment submitted
for recordation;
(d) each original recorded intervening assignment of the Mortgage as is
necessary to show a complete chain of title from the initial mortgagee (or
beneficiary, in the case of a deed of trust) to the related Seller (or a copy of
each such assignment certified to be a true and correct reproduction of the
original thereof by the appropriate public recording office) with evidence of
recordation noted thereon or attached thereto, or, if an assignment is in the
process of being recorded, a photocopy of the assignment, certified by an
officer of the Seller to be a true and correct copy of the assignment submitted
for recordation;
(e) an original Title Insurance Policy or, if such policy has not yet
been issued or is otherwise not available, (1) a written commitment to issue
such policy issued by the applicable title insurance company and an officer's
certificate of the related Seller certifying that all of the requirements
specified in such commitment have been satisfied, (2) a preliminary title report
if the related Mortgaged Property is located in a state in which preliminary
title reports are acceptable evidence of title insurance; provided, that if a
preliminary title report is delivered initially, a final title insurance policy
or other evidence of the existence of adequate title insurance shall be
delivered within 90 days or (3) a certificate of an officer of the Seller
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);
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(f) for each Mortgage Loan identified in the related Agreement as having
in place a Primary Mortgage Insurance Policy, a Primary Mortgage Insurance
Policy or a certificate of primary mortgage insurance issued by the related
Mortgage Insurer or its agent indicating that such a policy is in effect as to
such Mortgage Loan or, if neither a policy nor a certificate of insurance from
the related Mortgage Insurer is available, a certificate of an officer of the
related Seller certifying that a Primary Mortgage Insurance Policy is in effect
as to such Mortgage Loan; and
(g) each related assumption agreement, modification, written assurance
or substitution agreement, if any.
"Mortgage Loan-to-Value Ratio": As to a Mortgage Loan, the ratio,
expressed as a percentage, of the principal amount of such Mortgage Loan at the
time of determination, to the sum of the appraised value of the land and
improvements, and the amount of any prepaid finance charges or closing costs
that are financed.
"Mortgage Loan Schedule": For any Series, the list attached to the
related Pooling and Servicing Agreement identifying each Mortgage Loan assigned
thereunder (which may be presented together with any related Contract Schedule
in a single Asset Schedule), which list shall (a) identify each Mortgage Loan
and (b) set forth (or describe the method of determining) as to each such
Mortgage loan (1) the Cut-off Date Principal Balance thereof, (2) the amount of
each Monthly Payment, (3) the Mortgage Rate thereof, (4) the original term to
maturity thereof, (5) the date of origination thereof, (6) the original Mortgage
Loan-to-Value Ratio thereof, (7) the state in which the related Mortgaged
Property is located (8) the Scheduled Principal Balance of each Mortgage Loan,
(9) the original principal balance of each Mortgage Loan, and (10) any other
information as may be reasonably requested by the Trustee prior to the Closing
Date.
"Mortgage Note": A manually executed written instrument evidencing a
Mortgagor's promise to repay a stated sum of money, plus interest, to the holder
of such instrument on or before a specific date according to a schedule of
principal and interest payments.
"Mortgage Rate": With respect to each Mortgage Loan, the interest rate
specified in the related Mortgage Note.
"Mortgaged Property": The mortgaged property securing a Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
"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
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Servicer's receipt of such Insurance Proceeds. Amounts received by the Servicer
as Net Insurance Proceeds will be treated for accounting purposes as payments
received on Assets.
"Net Liquidation Proceeds": With respect to any Asset, the amount of
Liquidation Proceeds received with respect thereto (including any Net Insurance
Proceeds recovered in connection with the liquidation of the related
Manufactured Home or Mortgaged Property) net of the amount of any Liquidation
Expenses incurred and not previously reimbursed to the Servicer or such other
entity as of the time of the liquidation of such Asset. Amounts received by the
Servicer as Net Liquidation Proceeds will be treated for accounting purposes as
payments received on Assets.
"Net Rate": As to any Asset, the Asset Rate thereon minus applicable
servicing, administration and guarantee fees and insurance premiums, if any
(plus reinvestment income thereon if payable to the related Certificateholders),
expressed as a percentage per annum of the principal balance of such Asset.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed, modified or extended on behalf of the Trust
(if the Trustee, or the Servicer or its agent, has the right to renegotiate the
terms of such lease).
"Non-Recoverable Advance": As to any Advance that has not yet been made,
any portion of the amount of such prospective Advance which the Servicer
reasonably determines would not ultimately be recoverable from Related Proceeds.
As to any Advance that has been made by the Servicer, any portion of the amount
of such Advance that has subsequently been determined by the Servicer to be not
ultimately recoverable from Related Proceeds. In determining whether an Advance
is or would be a Non-Recoverable Advance, the Servicer need not take into
account the possibility that it might recover any amounts as the result of a
deficiency judgment against the related Obligor.
"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860G-3(a)(1) (i.e., a person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, (c) an estate that is subject to United States federal income tax
regardless of the source of its income), or (d) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries has the authority to control
all substantial decisions of the trust who would be subject to United States
income tax withholding pursuant to section 1441 or 1442 of the Code on income
derived from a Residual Interest.
"Obligor": The obligor under a Contract.
"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.
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"Officer": With respect to any corporation, the Chairman of the Board of
Directors, the President, any Vice President or Assistant Vice President, the
Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer of
such corporation (or, in the case of the Trustee, any Responsible Officer
thereof); with respect to any bank or trust company acting as trustee of an
express trust or as custodian, any trust officer or authorized officer thereof.
"Officer's Certificate": For any Person, a certificate that has been
signed on behalf of that Person by an Officer of that Person or any other
individual authorized to execute the certificate.
"Opinion of Counsel": A written opinion of counsel, which counsel is
satisfactory to the Servicer and the Trustee. Whenever an Opinion of Counsel is
required hereunder, the renderer of such Opinion may rely on other Opinions of
Counsel. Any Opinion of Counsel relating to tax matters must be an opinion of
Independent counsel.
"Outstanding": (a) With respect to the Certificates, as of any date of
determination, "Outstanding" refers to all Certificates theretofore executed and
delivered under the Pooling and Servicing Agreement except:
(1) Certificates theretofore canceled by the Certificate
Registrar or delivered to the Certificate Registrar for cancellation;
(2) Certificates or portions thereof for which money in the
amount necessary for the making of a final distribution on such
Certificates has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Certificates; provided,
that if such Certificates are to be retired because of termination of
the Trust at the option of the Servicer, notice of such optional
termination has been duly given pursuant to the Pooling and Servicing
Agreement;
(3) Certificates in exchange for which other Certificates have
been executed and delivered pursuant to Section 5.04 hereof; and
(4) Certificates alleged to have been destroyed, lost or stolen
for which replacement Certificates have been issued pursuant to Section
5.07 hereof unless proof satisfactory to the Trustee has been presented
at or before the time that the determination of those Certificates that
are Outstanding is made that any such Certificates are held by a holder
in due course.
(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
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Closing Date for the related Series, minus any amounts that have been
distributed on such Class in reduction of such aggregate amount in accordance
with the related Pooling and Servicing Agreement.
"P&I Advance": As defined in Section 3.04(b) hereof.
"Pass-Through Rate": With respect to any Class of Certificates, the
annual rate at which interest accrues on the Certificates of such Class, if any,
which rate is specified or described for each Class in the related Pooling and
Servicing Agreement.
"Paying Agent": Any Person authorized by the Company and the Trustee to
distribute principal or interest on any Certificates on behalf of the Trustee
and appointed pursuant to Section 5.09 hereof.
"Percentage Interest": With respect to a Certificate to which an initial
principal amount is assigned as of the Closing Date, the portion of the Class of
which such Certificate is a part evidenced by such Certificate, expressed as a
percentage, the numerator of which is the denomination represented by such
Certificate and the denominator of which is the initial Certificate Principal
Balance of such Class. With respect to a Certificate to which an initial
principal balance is not assigned as of the Closing Date, the portion of the
Class of which such Certificate is a part evidenced by such Certificate,
expressed as a percentage stated on the face of such Certificate.
"Permitted Encumbrances": In respect of any Mortgaged Property or Real
Property:
(a) the lien of current real property taxes and assessments not yet
due and payable;
(b) covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording acceptable to prudent
mortgage lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the related originator and referred
to or otherwise considered in the appraisal made for the originator; and
(c) other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to be
provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property or Real Property.
"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.
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"Plan Asset Regulations": The Department of Labor regulations set forth
in 29 C.F.R. 'SS' 2510.3-101.
"Plan Investor": A Plan, a Person acting on behalf of a Plan or a Person
using the assets of a Plan.
"Pool Scheduled Principal Balance": For any Series, on any Distribution
Date, the aggregate of the Scheduled Principal Balances, immediately prior to
the beginning of the related Collection Period, of the related Assets that were
Outstanding at the beginning of such Collection Period, plus the aggregate of
the principal components of any Monthly Payments that were due prior to the
beginning of such Collection Period on such Assets, but which Monthly Payments
were not collected from a related Obligor or advanced by the Servicer and which
were not reflected in a corresponding reduction in the aggregate Certificate
Principal Balance of the related Certificates on the related Distribution Date.
The Pool Scheduled Principal Balance as of any date of determination that is not
a Distribution Date shall be the Pool Scheduled Principal Balance for the next
upcoming Distribution Date. The initial Pool Scheduled Principal Balance as of
the cut-off Date shall be the aggregate of the Cut-off Date Scheduled Principal
Balances.
"Pooling and Servicing Agreement": A Pooling and Servicing Agreement
among the Company, BCI and a Trustee, relating to the issuance of Certificates
of a Series, which shall incorporate these Standard Terms by reference.
"Pooling REMIC": If provided for in a Pooling and Servicing Agreement,
the REMIC consisting primarily of the related Assets.
"Pooling REMIC Regular Interest": A Regular Interest in a Pooling REMIC.
"Prepayment Period": With respect to each Distribution Date, the
calendar month immediately preceding the calendar month in which such
Distribution Date occurs.
"Primary Mortgage Insurance": The insurance provided under any Primary
Mortgage Insurance Policy.
"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.
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"Principal Cramdown Amount" means, with respect to any Prepayment Period
as to any Asset that has been the subject of a Principal Cramdown, the amount by
which (a) the Unpaid Principal Balance of such Asset exceeds (b) as applicable,
depending upon the type of Principal Cramdown that was applied to such Asset,
either (1) the portion of such Unpaid Principal Balance that remains secured by
the related Manufactured Home or Mortgaged Property after taking the related
Principal Cramdown into account or (2) the Unpaid Principal Balance after taking
into account the permanent forgiveness of debt ordered by the bankruptcy court
in connection with the related Principal Cramdown.
"Principal Prepayment": With respect to any Asset, a payment
attributable to principal of such Asset, other than a scheduled principal
payment on such Asset, which may be received (a) from the related Obligor
together with a regular Monthly Payment, (b) from the related Obligor together
with an Early Payment, or (c) in the form of Net Insurance Proceeds received by
the Servicer otherwise than as a component of Liquidation Proceeds.
"Private Certificate": Any Class of Certificates of a Series designated
as such in the related Pooling and Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Qualification Defect": With respect to an Asset, (a) a defective
document in the related Asset File, (b) the absence of a document in such Asset
File, or (c) the breach of any representation, warranty, or covenant with
respect to the Asset made by the Company, the Seller or the Servicer, but only
if, as a result of any of the foregoing, the affected Asset would cease to
qualify as a "qualified mortgage" for purposes of the REMIC Provisions. With
respect to a REMIC Regular Interest or a participation certificate described in
Code section 860G(a)(3), the failure to qualify as a "qualified mortgage" for
purposes of the REMIC Provisions.
"Qualified Bank": Any domestic bank, the deposits of which are insured
to the full extent permitted by law by the Federal Deposit Insurance
Corporation, not affiliated with the Seller or the Company (1) having long-term
unsecured debt obligations rated in one of the two highest rating categories
(without modifiers) of each applicable Rating Agency (and of any other Rating
Agency, if such bank's long-term unsecured debt obligations are rated by such
additional Rating Agency) or short-term unsecured debt 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.
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"Qualified Insurer": Any insurance company or surety or bonding company
licensed to do business and issue insurance in all relevant jurisdictions
(including, in the case of an insurer under a Standard Hazard Insurance Policy,
the jurisdiction in which each Manufactured Home or Real Property or Mortgaged
Property covered by such policy is located).
"Qualified Substitute Asset": An Asset substituted by the Company or the
Seller for a Replaced Asset which must, on the date of such substitution, (a)
have an Unpaid Principal Balance not greater than (and not more than $10,000
less than) the Unpaid Principal Balance of the Replaced Asset, (b) have an Asset
Rate not less than (and not more than one percentage point in excess of) the
Asset Rate of the Replaced Asset, (c) have a Net Rate not less than (and not
more than one percentage point in excess of) the Net Rate of the Replaced Asset,
(d) have a remaining term to maturity not greater than (and not more than one
year less than) that of the Replaced Asset, (e) have a Loan-to-Value Ratio as of
the first day of the month in which the substitution occurs equal to or less
than the Loan-to-Value Ratio of the Replaced Asset as of such date (in each
case, using the appraised value at origination, and after taking into account
the Monthly Payment due on such date), and (f) comply with each representation
and warranty set forth in Section 2.05 hereof and in the related Sales
Agreement. In the event that more than one Asset is substituted for a Replaced
Asset, the amount described in clause (a) hereof shall be determined on the
basis of aggregate Unpaid Principal Balances, the rates described in clauses (c)
(i), (ii), and (iii) hereof shall be determined on the basis of weighted average
Asset Rates and Net Rates, as the case may be, and the term described in clause
(d) hereof shall be determined on the basis of weighted average remaining terms
to maturity, provided that no Qualified Substitute Asset may have an original
term to maturity beyond the latest original term to maturity of any Asset
assigned to the Trust on the Closing Date. In the case of a Trust for which a
REMIC election has been or will be made, a Qualified Substitute Asset also shall
satisfy the following criteria as of the date of its substitution for a Replaced
Asset: (A) the Obligor shall not be 90 or more days delinquent in payment on the
Qualified Substitute Asset, (B) the Asset File for such Asset shall not contain
any material deficiencies in documentation, and shall include an executed
Contract or Mortgage Note, as applicable, and, if it is a Land Secured Contract
or a Mortgage Loan, a recorded Mortgage; (C) the Loan-to-Value Ratio of the
Asset must be 125% or less either (1) on the date of origination of the Asset,
or, if any of the terms of such Asset were modified other than in connection
with a default or imminent default on such Asset, on the date of such
modification, or (2) on the date of the substitution, based on an appraisal
conducted within the 60 day period prior to the date of the substitutions; (D)
no property securing such Asset may be subject to foreclosure, bankruptcy, or
insolvency proceedings; and (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
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Servicer. References herein to any rating category of a Rating Agency shall mean
such rating category without regard to any plus or minus or numerical
designation.
"Real Property": Land and improvements thereon subject to the lien of
the Mortgage securing a Land Secured Contract.
"Realized Interest Loss": A shortfall in interest resulting from the
receipt of Liquidation Proceeds in respect of a Contract or Mortgage Loan in an
amount that is insufficient to pay accrued and unpaid interest thereon.
"Realized Loss": Either (a) with respect to any Liquidated Asset, (1)
the Unpaid Principal Balance of the Liquidated Asset, plus accrued and unpaid
interest on such Liquidated Asset, plus amounts reimbursable to the Servicer for
previously unreimbursed Servicing Advances, minus (2) Net Liquidation Proceeds
collected in respect of the Liquidated Asset or (b) with respect to any Asset
that has been the subject of a Principal Cramdown, an Obligor Bankruptcy Loss
with respect to such Asset.
"Record Date": With respect to each Distribution Date, the close of
business on the last Business Day of the calendar month immediately preceding
the month in which such Distribution Date occurs.
"Recordation Report": A report substantially in the form of Exhibit 3
hereto provided by the Trustee (or the Custodian) pursuant to Section 2.03(c)(4)
hereof identifying those Mortgage Loans for which a Mortgage or an Assignment
remains unrecorded.
"Regular Certificate": A Certificate other than a Residual Certificate
and that is a Regular Interest in a REMIC or a combination of Regular Interests
in a REMIC.
"Regular Interests": Interests in a REMIC that are designated as
"regular interests" under the REMIC Provisions.
"Regulations": The regulations promulgated under the Code by the
Treasury.
"Related Proceeds': As defined in Section 3.04(c) hereof.
"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.
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"REMIC Loan-to-Value Ratio": The quotient, expressed as a percentage,
obtained by dividing (a) the original unpaid principal balance of an Asset, plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or pari passu with, such Asset by
(b) the sale price of the Manufactured Home or Mortgaged Property that secures
such Asset. Alternatively, the REMIC Loan-to-Value Ratio may be determined by
dividing (a) the unpaid principal balance of an Asset as of the Startup Day plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or pari passu with, such Asset by
(b) the fair market value of the Manufactured Home or Mortgaged Property that
secures such Asset on the Startup Day.
"REMIC Provisions": Provisions of the Code relating to real estate
mortgage investment conduits, which appear at sections 860A through 860G of the
Code, related Code provisions, and Regulations (whether in proposed, temporary
or final form), announcements and rulings thereunder, as the foregoing may be in
effect from time to time.
"Remittance Amount": With respect to any Remittance Date and related
Distribution Date, the sum of the following amounts:
(a) the Monthly Payment that was due on each Outstanding Asset on the
Due Date occurring in the related Collection Period and that was received by the
Servicer from the related Obligor;
(b) all amounts received during the related Collection Period in respect
of any Asset that was Outstanding at the beginning of the related Collection
Period representing late payments of principal and interest due on such Asset
prior to the Due Date occurring in the related Collection Period, to the extent
such amounts exceed outstanding unreimbursed P&I Advances made by the Servicer
with respect to such Asset;
(c) each Principal Prepayment (whether full or partial) of any Asset
that was Outstanding at the beginning of the related Prepayment Period received
by the Servicer during the related Prepayment Period;
(d) any amounts received by the Servicer during the related Prepayment
Period as Net Liquidation Proceeds with respect to any Asset that was
Outstanding at the beginning of the related Prepayment Period (net of
outstanding unreimbursed P&I Advances made by the Servicer with respect to such
Asset); and
(e) all amounts deposited into the Certificate Account during the
related Prepayment Period as a result of any purchase or repurchase of any Asset
pursuant to Section 2.06 hereof (net of outstanding unreimbursed P&I Advances
made by the Servicer with respect to such Asset);
less the Interest Deficiency Withdrawal for the previous Distribution Date.
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"Remittance Date": The Business Day preceding each Distribution Date,
which is the date by which funds must be remitted by the Servicer from the
Certificate Account to the Distribution Account or, if the Certificate Account
is maintained by the Trustee, the date on which the Servicer is to notify the
Trustee of the related Remittance Amount, in either case pursuant to Section
3.07(b) hereof.
"Remittance Report": As defined in Section 4.01 hereof.
"Rents From Real Property": With respect to any REO Property, gross
income of the character described in Code section 856(d) and Treasury
regulations thereunder.
"REO Property": A Mortgaged Property acquired by the Servicer in the
name of the Trust on behalf of the Certificateholders through foreclosure or
deed-in-lieu of foreclosure, as further described in Section 3.09 hereof.
"REO Property Disposition": The receipt by the Servicer of Insurance
Proceeds and other payments and recoveries (including Liquidation Proceeds)
which the Servicer recovers from the sale or other disposition of an REO
Property.
"Replaced Asset": An Asset replaced or to be replaced by a Qualified
Substitute Asset.
"Repo Property": A Manufactured Home (and any related Real Property)
acquired by the Servicer in the name of the Trust on behalf of the Trust
pursuant to a repossession, foreclosure, or similar proceeding in connection
with a Defaulted Contract.
"Repurchase Price": With respect to any Asset to be purchased or
repurchased pursuant to Section 2.06 hereof, an amount equal to the Unpaid
Principal Balance of such Asset as of the close of business on the date of such
purchase or repurchase, together with all accrued and unpaid interest thereon to
the end of the Collection Period in which such purchase or repurchase occurs.
"Repurchaser": Any Person that repurchases or purchases a Contract from
the Trust pursuant to Section 2.06 hereof.
"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.
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"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.
"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.
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"Securities Act": The Securities Act of 1933, as amended.
"Seller": As to any Contract or Mortgage Loan included in the Trust
Estate for a Series, the entity that sold such Contract or Mortgage Loan to the
Company under a Sales Agreement, which will be BCI unless otherwise specified in
the related Pooling and Servicing Agreement. For purposes of the definitions of
"Contract Documents" and "Mortgage Loan Documents" herein, documents (including,
without limitation, certificates of title, UCC filing instruments, assignments
and endorsements) indicating assignment or endorsement to, or the existence of a
security interest in, a name that is a registered trade name of the Seller in
the relevant jurisdiction shall satisfy any requirement of these Standard Terms
that such documents reflect the name of the "Seller."
"Series": A separate Series of Certificates issued pursuant to a Pooling
and Servicing Agreement, which Series may, as provided therein, be divided into
two or more Classes.
"Servicer": BCI, as servicer of any of the Assets under any Pooling and
Servicing Agreement, and its permitted successors and assigns thereunder.
"Servicer Contract File": As to each Contract, a file maintained by the
Servicer that contains the related loan application and credit report, any
correspondence relating to the Contract, and all other instruments, documents,
papers, ledger cards, accounting records, and computer print-outs maintained by
the Servicer now or hereafter in connection with the servicing of the Contracts,
which may be maintained on microfilm or on computer-readable optical disk or on
any other medium selected by the Servicer.
"Servicer Custodial Certification": A certification executed by an
Officer of the Servicer substantially in the form of Exhibit 1 hereto.
"Servicer File": As to any Asset, the related Servicer Contract File or
Servicer Mortgage Loan File, as applicable.
"Servicer Mortgage Loan File": As to each Mortgage Loan, a file
maintained by the Servicer that contains (1) an original Standard Hazard
Insurance Policy (and flood insurance policy, if required pursuant to Section
3.16 hereof) relating to the underlying Mortgaged Property or a certificate of
insurance issued by the insurer or its agent indicating that a Standard Hazard
Insurance Policy (and a flood insurance policy, if required pursuant to Section
3.16 hereof) is in effect with respect to such Mortgaged Property, (2) originals
or copies of all documents submitted to a Mortgage Insurer for credit and
property underwriting 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
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of the documentation effecting any such modifications or releases, (8)
collection notices or form notices sent to the related Mortgagor, (9)
foreclosure correspondence and legal notifications, if applicable, (10) water
and irrigation company stock certificates, if applicable, and (11) all other
documents relating to such Mortgage Loan which would customarily be maintained
in a mortgage loan file by the Servicer in order to service the mortgage loan
properly, as well as any other documents relating to such Mortgage Loan (other
than Mortgage Loan Documents) that come into the Servicer's possession.
"Servicing Account": As defined in Section 3.05 hereof.
"Servicing Advances": Advances required to be made by the Servicer as
described in Section 3.04(a) hereof, including, but not limited to, advances for
the payment of personal property taxes, real estate taxes and premiums for
Standard Hazard Insurance Policies.
"Servicing Fee": On each Distribution Date, the product obtained by
multiplying (a) one-twelfth of the Servicing Fee Rate by (b) the Scheduled
Principal Balance of the Assets immediately prior to the preceding Collection
Period (without giving effect to any Principal Prepayments, Net Liquidation
Proceeds and Repurchase Prices received (or Realized Losses incurred) on the day
preceding the beginning of such Collection Period).
"Servicing Fee Event": Provided that the Trustee has received a letter
from each Rating Agency from whom the Company requested a rating of any of the
related Certificates stating that such action will not result in a reduction of
the then current rating of the related Certificates rated by such Rating Agency
at the request of the Company, the Servicing Fee in respect of each Contract may
be retained by BCI at the time of the related collection on such Contract (or
may be withdrawn from the Certificate Account in accordance with Section
3.07(a)(2) upon giving written notice to the Trustee of a "Servicing Fee Event"
provided, that a Servicing Fee Event shall no longer be deemed to be occurring
if the Servicer delivers a notice to each Rating Agency from whom the Company
requested a rating of any of the related Certificates and to the Trustee stating
that a Servicing Fee Event shall no longer be occurring.
"Servicing Fee Rate": A per annum rate, to be specified in each Pooling
and Servicing Agreement.
"Shortfall": Due Date Interest Shortfall and Soldiers' and Sailors'
Shortfall.
"Soldiers' and Sailors' Shortfall": Interest losses on a Contract or
Mortgage Loan resulting from application of the Soldiers' and Sailors' Civil
Relief Act of 1940.
"Special Hazard Insurance Policy": An insurance policy covering a
Contract or Mortgage Loan against Special Hazard Loss.
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"Special Hazard Loss": A loss incurred on a Contract or Mortgage Loan
attributable to physical damage to the related Manufactured Home or Mortgaged
Property of a type which is not covered by standard hazard insurance policies
including vandalism and earthquakes and except where the related Obligor is
required to obtain flood insurance, floods and mud flows, and excluding losses
caused by war, nuclear reaction, nuclear or atomic weapons, insurrection or
normal wear and tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Holder's Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed transaction
or activity will not (a) affect adversely the status of the REMIC as a REMIC or
the related Regular Certificates as the regular interests therein, (b) affect
the timing or amount of distributions of interest or principal on such Regular
Certificates, or (c) result in the encumbrance of the Contracts by a tax lien.
"Standard Hazard Insurance Policy": With respect to each Contract, the
policy of fire and extended coverage insurance (and any federal flood insurance,
if applicable) required to be maintained for the related Manufactured Home as
provided herein, which may be a blanket mortgage impairment policy maintained by
the Servicer in accordance with the terms and conditions of the Pooling and
Servicing Agreement.
"Standard Terms": These Standard Terms to Pooling and Servicing
Agreement and all exhibits, schedules and appendices hereto, as amended and
supplemented from time to time.
"Startup Day": The Startup Day (within the meaning of Code section
860G(a)(9)) is the Closing Date.
"Tax Matters Person": The Person or Persons designated from time to time
hereunder to act as tax matters person (within the meaning of the REMIC
Provisions) of the REMIC.
"Terminating Purchase": The purchase of all Contracts and Mortgage Loans
and each Repo Property and REO Property owned by a Trust pursuant to Section
9.01 hereof.
"Termination Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on the Distribution Date on which the
earlier of (a) a Terminating Purchase or (b) the final payment or other
liquidation of the last Asset remaining in the Trust or the disposition of the
last Repo Property or REO Property remaining in the Trust is made are deposited.
The Termination Account shall be an Eligible Account.
"Termination Date": Any Distribution Date fixed for termination of the
Trust pursuant to the provisions of Sections 9.01 and 9.02 hereof.
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"Termination Price": With respect to any Terminating Purchase, the
greater of (a) the sum of (1) any Liquidation Expenses incurred by the Servicer
in respect of any Contract that has not yet been liquidated; (2) all amounts
required to be reimbursed or paid to the Servicer in respect of previously
unreimbursed Advances; and (3) the sum of (i) the aggregate Unpaid Principal
Balance of the Contracts, plus accrued and unpaid interest thereon at the
Contract Rates borne by such contracts through the end of the month preceding
the month of the terminating purchase, plus (ii) the lesser of (A) the aggregate
Unpaid Principal Balance of each Contract that had been secured by any Repo
Property remaining in the Trust, plus accrued interest thereon at the Contract
Rates borne by such Contracts through the end of the month preceding the month
of the terminating purchase, and (B) the current appraised value of any such
Repo Property (net of Liquidation Expenses to be incurred in connection with the
disposition of such property estimated in good faith by the Servicer), such
appraisal to be conducted by an appraiser mutually agreed upon by the Servicer
and the Trustee, plus all previously unreimbursed P&I Advances made in respect
of such Repo property, and (b) the aggregate fair market value of the assets of
the Trust (as determined by the Servicer as provided herein) plus all previously
unreimbursed P&I Advances made with respect to the Contracts. The fair market
value of the assets of the Trust as determined for purposes of a Terminating
Purchase shall be deemed to include accrued interest at the applicable Contract
Rate on the Unpaid Principal Balance of each Contract (including any Contract
that has become a Repo Property, which Repo Property has not yet been disposed
of by the Servicer) through the end of the month preceding the month of the
terminating purchase. The basis for any such valuation shall be furnished by the
Servicer to the Certificateholders upon request.
"Terminator": The Person making a Terminating Purchase or causing such
Terminating Purchase to be made.
"TIN": Taxpayer identification number.
"Title Insurance Policy": For any Mortgage Loan, an American Land Title
Association mortgagee's mortgage loan title policy form 1970, or other form of
mortgagee's title insurance acceptable to FNMA or FHLMC for the jurisdiction in
which the subject property is located, including all riders and endorsements
thereto, insuring that the related Mortgage creates a valid first lien on the
underlying Mortgaged Property subject only to Permitted Encumbrances.
"Transferee Agreement": An agreement substantially in the form of
Exhibit 6 hereto.
"Treasury": The United States Department of the Treasury.
"Trust": The trust created pursuant to the terms of a Pooling and
Servicing Agreement.
"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.
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"Trustee": The bank or trust company identified as the trustee under any
Pooling and Servicing Agreement.
"Trustee Mortgage Loan File": As to each Mortgage Loan, a file
containing all of the related Mortgage Loan Documents.
"UCC": The Uniform Commercial Code as in effect in any relevant
jurisdiction.
"Unpaid Principal Balance": With respect to any Asset, the outstanding
principal balance payable by the related Obligor pursuant to the terms of such
Asset.
"U.S. Person": A Person other than a Non-U.S. Person.
"USAP": As defined in Section 3.13 hereof.
"VA": The United States Department of Veterans Affairs.
"VA Asset": An Asset guaranteed in whole or in part by the VA.
"VA Guaranty": As to any VA Asset, VA's full or partial guaranty of
payment of amounts due thereunder.
"Voting Rights": With respect to any Certificate, the portion of the
voting rights of all of the Certificates of the related Series which is
allocated to such Certificate. Unless otherwise provided in the related Pooling
and Servicing Agreement, (a) if any Class of Certificates does not have a
Certificate Principal Balance or has an initial Certificate Principal Balance
that is less than or equal to 1% of the aggregate Certificate Principal Balance
of all the Certificates of its Series, then 1% of the Voting Rights for such
Series shall be allocated to each such Class, and the balance of the Voting
Rights for such Series shall be allocated among the remaining Classes of
Certificates of such Series in proportion to their respective Certificate
Principal Balances following the most recent Distribution Date, and (b) if no
Class of Certificates of such Series has an initial Certificate Principal
Balance less than 1% of the aggregate Certificate Principal Balance of all
Certificates of such Series, then all of the Voting Rights for such Series shall
be allocated among all the Classes of Certificates of such Series in proportion
to their respective Certificate Principal Balances following the most recent
Distribution Date. Voting Rights allocated to each Class of Certificates shall
be allocated among the Certificates of such Class in proportion to the
respective Percentage Interests of the Holders thereof.
"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.
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"Writedown Amount": With respect to any Distribution Date for a Series,
the amount, if any, by which (1) the aggregate Certificate Principal Balance of
all Certificates of such Series, after all distributions have been made on such
Certificates on such Distribution Date, exceeds (2) the Pool Scheduled Principal
Balance of the related Assets for the next Distribution Date.
ARTICLE II
THE ASSETS
SECTION 2.01. ASSIGNMENT OF ASSETS.
Pursuant to a Pooling and Servicing Agreement, the Company has sold to
the related Trust without recourse all the right, title and interest of the
Company in and to the Assets identified in such Pooling and Servicing Agreement,
any and all rights, privileges and benefits accruing to the Company under the
Sales Agreement(s) with respect to such Assets (except any rights of the Company
to fees payable by the Seller under such Sales Agreement and provided that the
Company shall retain its rights to indemnification from the Seller under such
Sales Agreement, but shall also convey rights to such indemnification to the
Trustee as its assignee), including the rights and remedies with respect to the
enforcement of any and all representations, warranties and covenants under such
Sales Agreements and assets included or to be included in the related Trust for
the benefit of the related Certificateholders as set forth in the conveyance
clause of the related Pooling and Servicing Agreement. Such assignment includes
all of the Company's rights to payments due with respect to the Assets on and
after the Cut-off Date.
SECTION 2.02. THE CONTRACTS.
(a) Servicer's Custody of Contract Files and Servicer Contract Files.
The parties to the Pooling and Servicing Agreement, by their execution thereof,
acknowledge the Servicer's appointment to serve as custodian of the Contract
Files and the Servicer Contract Files as described herein for the benefit of the
Certificateholders and the Trustee. The Servicer, by its execution of the
Pooling and Servicing Agreement, agrees to, and shall, retain possession of the
Contract File and the Servicer Contract File pertaining to each of the Contracts
on behalf of the Certificateholders and the Trustee.
The Servicer (or a custodian appointed by the Servicer) shall hold each
Contract and any other documents constituting each Contract File and each
Servicer Contract File that are in the possession of the Servicer or that at any
time come into the possession of the Servicer in trust as custodian for the
Holders of the Certificates, and the Servicer hereby acknowledges and declares
that it holds and will hold or has 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
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of all documents constituting the Contract Files in its possession in secure and
fireproof-rated locked files or vaults in accordance with customary standards
for such custody.
From time to time, the Company or the Seller shall deliver to the
Servicer for inclusion in the appropriate Contract File, the original Contract
Documents for any Contract to the extent that copies of such original documents
were initially included in such Contract File or in the event that only a copy
of an application for an original Contract Document was initially included among
the related Contract Documents. In addition, the Servicer shall add to the
appropriate Contract File any additional original documents received by the
Servicer that evidence a modification of the related Contract approved by the
Company.
The Servicer shall maintain custody of the Contract Files and Servicer
Contract Files for each Series in its possession at its offices where the
Contract Files and Servicer Contract Files are presently maintained or at such
other offices of the Servicer in the State of Florida as the Servicer may
identify to the Trustee by written notice provided at least ten days prior to
the Servicer's change of the location of its custody of the Contract Files and
Servicer Contract Files. The Servicer may not move the location of its custody
of the Contract Files and Servicer Contract Files for any Series outside of the
State of Florida without first giving 30 days' prior written notice of such
relocation to each applicable Rating Agency and the Trustee and obtaining each
such Rating Agency's written confirmation that such relocation will not result
in any downgrading of any Certificates of such Series. Notwithstanding the
foregoing, the Servicer may temporarily move individual Contract Files or any
portions thereof without notice to the Trustee or any Rating Agency as may be
necessary for it to conduct collection and other servicing activities in
accordance with its customary practices and procedures. In acting as custodian
of the Contract Files, the Servicer agrees not to assert any ownership interests
in the Contracts or the Contract Files, and to indicate to any third parties,
promptly upon their inquiry to the Servicer, that the Contracts and the Contract
Files have been sold and assigned to the appropriate Trust.
(b) Review of Contract Files. Prior to the Closing Date, the Servicer's
operations department will complete a review of all of the Contract Files
(including the certificates of title to, or other evidence of a perfected
security interest in, the related Manufactured Homes), confirming the accuracy
of the Contract Schedule delivered to the Trustee. On or before the Closing
Date, the Servicer shall deliver to the Trustee a Servicer Custodial
Certification signed by one of its Officers confirming that it is in possession
of the Contract File for each Contract identified on Schedule I to the Pooling
and Servicing Agreement, subject to any exceptions noted in a schedule to such
certificate. Such certification shall be substantially in the form of Exhibit 1
hereto.
In giving its Servicer's Custodial Certification with respect to a
Series, the Servicer shall be under no duty or obligation (A) to inspect, review
or examine any such documents, instruments, securities or other 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.
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If the Servicer discovers any discrepancy between any Contract and the
Contract Schedule, or that any required Contract Document is defective or
missing from the related Contract File, in either case in a manner that is
materially adverse to the interests of the Certificateholders, it shall
immediately provide written notice to the Seller (unless the Seller is the
Servicer) and the Trustee of such discrepancy, incompleteness or defect. If the
Seller does not cure such discrepancy or such incomplete or defective Contract
File within 90 days after discovery or its receipt of written notice of such
discrepancy, incompleteness or defect, the Servicer shall take all steps within
its power to enforce the Trustee's right to require the Seller to repurchase the
affected Contract (or in the alternative to substitute for such Contract, if the
substitution will take place within two years after the Closing Date) pursuant
to the applicable Sales Agreement or, in the alternative (if the discrepancy
consists of an overstatement in the Contract Schedule of the Cut-off Date
Principal Balance of a Contract), to deposit cash into the related Certificate
Account in the amount of such overstatement of the Cut-off Date Principal
Balance of a Contract in the Contract Schedule (as described in the applicable
Sales Agreement).
(c) Security Interests in the Contracts, Manufactured Homes and Real
Property.
(1) Perfection of Trustee's Security Interest in Contracts. On or
prior to the Closing Date, the Servicer shall cause to be filed in all
appropriate UCC filing offices, UCC-1 financing statements describing
the Trust Estate (including the Contracts and payments due thereon after
the Cut-off Date) and proceeds thereof as "collateral" and (1) naming
the Seller as "Debtor," the Company as "Secured Party," and the Trustee
on behalf of the Trust as "Assignee," and (2) naming the Company as
"Debtor" and the Trustee on behalf of the Trust as "Secured Party." The
Servicer shall cause to be filed all necessary continuation statements
for each of the aforementioned UCC-1 financing statements.
(2) Perfection of Trustee's Security Interest in Manufactured
Homes. So long as the Contract Documents for each Contract contain
evidence of perfection of either the Seller's, the Company's or the
Trustee's security interest in the related Manufactured Home, neither
the Seller nor the Company shall be required to cause notations to be
made on any certificate or other document of title relating to such
Manufactured Home or to execute any transfer instrument (including,
without limitation, any UCC-3 assignments) relating to such Manufactured
Home, except under the limited circumstances described in Section
2.06(b) below. Subject to the limitation described in the preceding
sentence, the Servicer shall take all steps necessary, at its own
expense, to maintain perfection of the Trustee's lien on each
Manufactured Home to the extent the Servicer receives notice of
relocation, re-registration or sale thereof.
(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
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before the Closing Date, the Seller shall deliver to the Trustee an
executed power of attorney substantially in the form of Exhibit 9
hereto, authorizing the Trustee to execute and record assignments of
Mortgages securing Land Secured Contracts from the Seller to the Trustee
in the event that recordation of such assignments becomes necessary for
foreclosure on the related Real Property by or on behalf of the Trustee.
Pursuant to such power of attorney, at the Servicer's instruction, the
Trustee shall execute any such assignments as are provided to the
Trustee by the Servicer. After execution of any such assignments, the
Trustee shall redeliver such assignments to the Servicer at the
Servicer's expense. Any expenses incurred by the Servicer in connection
with the foregoing or in connection with its recordation of assignments
in preparation for a foreclosure on a Land Secured Contract shall
constitute Liquidation Expenses.
SECTION 2.03. THE MORTGAGE LOANS.
(a) Custody of Trustee Mortgage Loan Files. In connection with the
transfer and assignment of the Mortgage Loans from the Company to the Trustee,
the Company shall deliver, or cause to be delivered, to the Trustee or its
Custodian on or before the Closing Date, a Trustee Mortgage Loan File containing
each of the documents listed in the definition thereof. If any Mortgage or an
Assignment of a Mortgage to the Trustee or any prior Assignment is in the
process of being recorded on the Closing Date, the Company shall cause each such
original recorded document or certified copy thereof, to be delivered to the
Trustee or its Custodian promptly following its recordation. The Company shall
also cause to be delivered to the Trustee any other original Mortgage Loan
Document to be included in the Trustee Mortgage Loan File if a copy thereof
initially was delivered.
In lieu of recording an Assignment of any Mortgage for any Mortgage
Loan, the Company may deliver or cause to be delivered to the Trust or its
Custodian the Assignment of the Mortgage from the Seller to the Trustee in a
form suitable for recordation, together with an Opinion of Counsel to the effect
that recording is not required to protect the Trustee's right, title and
interest in and to the related Mortgage Loan or, in case a court should
recharacterize the sale of the Mortgage Loans as a financing, to perfect a first
priority security interest in favor of the Trust in the related Mortgage Loan.
In the event that the Servicer receives notice that recording is required to
protect the right, title and interest of the Trust in and to any such Mortgage
Loan for which recordation of an Assignment has not previously been required,
the Servicer shall promptly notify the Trustee and the Trustee shall within five
Business Days of its receipt of such notice deliver, or cause to be delivered,
each previously unrecorded Assignment to the Servicer for recordation.
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.
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(b) Custody of Servicer Mortgage Loan Files. The Servicer has in its
possession a Servicer Mortgage Loan File for each Mortgage Loan containing each
of the documents listed in the definition thereof. All such documents shall be
held by the Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
(c) Review of Trustee Mortgage Loan Files.
(1) Initial Certification. The Trustee shall, for the benefit of
the Certificateholders for any Series, review each related Trustee
Mortgage Loan File prior to the related Closing Date to ascertain that
all documents required to be included in the Trustee Mortgage Loan File
are included therein, and shall deliver to the Company and the Servicer
on such Closing Date an Initial Certification with respect to each
underlying Mortgage Loan (except any Mortgage Loan that has been
liquidated or purchased from the related Trust prior to such Closing
Date) to the effect that, except as specifically noted on a schedule of
exceptions thereto, (A) all documents required to be contained in the
Trustee Mortgage Loan File are in its possession, (B) such documents
have been reviewed by it and appear regular on their face and relate to
such Mortgage Loan, and (C) based on its examination and only as to the
foregoing documents, the information set forth on the related Mortgage
Loan Schedule accurately reflects information set forth in the Trustee
Mortgage Loan File.
It is understood that before making the Initial Certification for
any Series, the Trustee shall examine the related Mortgage Loan
Documents to confirm that:
(A) each Mortgage Note and Mortgage bears an original
signature or signatures purporting to be that of the Person or
Persons named as the maker and mortgagor/trustor or, if
photocopies are permitted, that such copies bear a reproduction
of such signature or signatures;
(B) except for the endorsement to the Trustee, neither
the Mortgage nor any Assignment, on the face or the reverse
side(s) thereof, contain evidence of any unsatisfied claims,
liens, security interests, encumbrances or restrictions on
transfer;
(C) the principal amount of the indebtedness secured by
the related Mortgage is identical to the original principal
amount of the related Mortgage Note;
(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;
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(E) if intervening Assignments are included in the
Trustee Mortgage Loan File, each such intervening Assignment
bears an original signature of the related mortgagee and/or the
assignee (and any other necessary party) (or signatures
purporting to be that of the Seller and any such other party) or,
if photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(F) if either a Title Insurance Policy, a preliminary
title report or a written commitment to issue a Title Insurance
Policy is delivered, the address of the real property set forth
in such policy, report or written commitment is identical to the
real property address contained in the related Mortgage; and
(G) if any of a Title Insurance Policy, certificate of
title insurance or a written commitment to issue a Title
Insurance Policy is delivered, such policy, certificate or
written commitment is for an amount not less than the original
principal amount of the related Mortgage Note and such Title
Insurance Policy insures that the related Mortgage creates a
first lien, senior in priority to all other deeds of trust,
mortgages, deeds to secure debt, financing statements and
security agreements and to any mechanics' liens, judgment liens
or writs of attachment (or if the Title Insurance Policy or
certificate of title insurance has not been issued, the written
commitment for such insurance obligates the insurer to issue such
policy for an amount not less than the original principal amount
of the related Mortgage Note).
(2) Final Certification. Prior to the first anniversary date of
the Closing Date for a Series, the Trustee shall deliver to the Company
and the Servicer a Final Certification evidencing the completeness of
the Trustee Mortgage Loan File for each Mortgage Loan, with any
applicable exceptions noted on such Final Certification.
(3) Certifications Generally. In giving each of the Initial
Certification and the Final Certification with respect to a Series, the
Trustee shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereon are genuine, enforceable,
or appropriate for the represented purpose or that they have actually
been recorded or that they are other than what they purport to be on
their face or (B) to determine whether any Trustee Mortgage Loan File
should 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
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intervening Assignments or a copy thereof certified to be a true and
correct copy by the public recording office in possession of such
Assignment; provided, however, that the Trustee shall not be required to
provide a Recordation Report with respect to the recordation of an
Assignment for any Mortgage Loan for which there has been delivered an
Assignment in recordable form pursuant to Section 2.03(a) hereof unless
the Trustee has delivered such Assignment to the Servicer for
recordation, in which case, the Trustee shall deliver a Recordation
Report as to the status of such Assignment in accordance with this
paragraph commencing in the fourth month following the delivery of such
Assignment to the Servicer for recordation.
(5) Custodians. In lieu of taking possession of the Trustee
Mortgage Loan Files and reviewing such files itself, the Trustee may, in
accordance with Section 8.11 hereof, appoint one or more Custodians on
behalf of the Trust to hold the Trustee Mortgage Loan Files for a Series
on its behalf and to review them as provided in this Section 2.03. The
Company shall, upon notice of the appointment of a Custodian, deliver or
cause to be delivered all documents to the Custodian that would
otherwise be deliverable to the Trustee. In such event, the Trustee
shall obtain from each such Custodian, within the specified times, the
Initial and Final Certifications and the Recordation Reports with
respect to those Mortgage Loans held and reviewed by such Custodian and
may deliver such Certifications and Reports to the Company and the
Servicer in satisfaction of the Trustee's obligation to prepare such
Certification and Reports. The Trustee shall notify the Custodian of any
notices delivered to the Trustee with respect to those Trustee Mortgage
Loan Files.
(6) Recordation with Respect to Mortgage Loans. Notwithstanding
any provisions in these Standard Terms to the contrary, the Company
shall cause Assignments of Mortgages to the Trustee to be prepared and
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
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made hereunder are made by the Trustee without any independent investigation and
without recourse, representation or warranty, except that the Trustee believes
such representations and warranties to be true.
SECTION 2.05. REPRESENTATIONS AND WARRANTIES AS TO ASSETS.
The Company represents and warrants to the Trustee and the related
Trust, effective as of the Closing Date, that the following information is true
and correct in all material respects:
(a) The information pertaining to each Asset set forth in the Asset
Schedule was true and correct at the date or dates respecting which such
information was furnished.
(b) The Company is the owner of, or holder of a perfected first priority
security interest in, each Asset.
(c) The Company acquired its ownership of, or security interest in, each
such Asset in good faith without notice of any adverse claim.
(d) Except for the sale to the Trust the Company has not assigned any
interest or participation in each such Asset (or, if any such interest or
participation has been assigned, it has been released).
(e) The Company has full right to sell the Trust Estate to the Trust.
It is understood and agreed that the representations and warranties set
forth in this Section 2.05 shall survive delivery of the respective Contract
Files to the Servicer as custodian for the Trustee and of the respective Trustee
Mortgage Loan Files to the Trustee or its Custodian and shall inure to the
benefit of the Trustee notwithstanding any restrictive or qualified endorsement
or assignment. Upon the discovery by the Company, the Servicer or the Trustee of
a breach of any of the foregoing representations and 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.
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(1) Seller Breach. Upon discovery or receipt of notice of any
defective document in an Asset File, or of any breach by the Seller of
any representation, warranty or covenant hereunder or under the Sales
Agreement, which defect or breach materially and adversely affects the
value of any Asset or the interest of the Trust therein (it being
understood that any such defect or breach shall be deemed to have
materially and adversely affected the value of the related Asset or the
interest of the Trust therein if the Trust incurs a loss as a result of
such defect or breach), the Trustee shall promptly notify the Servicer
of such defect or breach and direct the Servicer to request the Seller
of such Asset to cure such defect or breach. The Seller must cure such
defect or breach, or purchase such Asset from the Trustee on behalf of
the related Trust for the benefit of the Certificateholders, within 90
days after the date on which the Seller was notified of such defect or
breach. In lieu of purchasing any such Asset as provided above, if so
provided in the related Sales Agreement, the Seller may cause such Asset
to be removed from the Trust (in which case it shall become a Replaced
Asset) and substitute one or more Qualified Substitute Assets in the
manner and subject to the limitations set forth in Section 2.06(g)
below. Notwithstanding the foregoing, however, if such breach is a
Qualification Defect and one or more REMIC elections have been made with
respect to the related Trust, such cure, purchase or substitution must
take place within 75 days of the Defect Discovery Date. It is understood
and agreed that enforcement of the obligation of the Seller to cure or
to purchase (or to substitute for) any Asset as to which a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing, shall constitute the sole remedy respecting
such defect or breach available to the Trustee on behalf of the
Certificateholders. The Servicer shall use its best efforts to enforce
the Seller's obligations under its Sales Agreement to repurchase or
substitute for Assets affected by breaches of the Seller's
representations and warranties contained in its Sales Agreement.
(2) Servicer Breach. In addition to taking any action required
pursuant to Section 7.01 hereof, upon discovery or notice of any breach
by the Servicer of any representation, warranty or covenant hereunder
not covered by Section 2.06(a)(1) above which materially and adversely
affects the value of any Asset or the interest of the Trust therein (it
being understood that 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
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affects the value of the Asset or the interest of the Trust therein (it
being understood that any such breach shall be deemed to have materially
and adversely affected the value of the related Asset or the interest of
the Trust therein if the Trust incurs a loss as a result of such defect
or breach), the Company shall (i) cure such breach in all material
respects, (ii) purchase the Asset from the Trustee on behalf of the
related Trust, or (iii) remove such Asset from the Trust (in which case
it shall become a Replaced Asset) and substitute one or more Qualified
Substitute Assets in the manner and subject to the limitations set forth
in Section 2.06(g) below. Notwithstanding the foregoing, however, if
such breach is a Qualification Defect and one or more REMIC elections
have been made with respect to the related Trust, such cure, purchase or
substitution must take place within 75 days of the Defect Discovery
Date.
(b) Failure to Retitle Manufactured Homes. Upon the occurrence of either
of the following events:
(1) the rendering of judgment by a court of competent
jurisdiction that the Trustee on behalf of the Trust does not have a
perfected first-priority security interest in a particular Manufactured
Home because the Seller has not caused notations to be made on any
certificate or other document of title relating to such Manufactured
Home or has not executed any transfer instrument (including any UCC
financing statement or UCC-3 assignment) relating to such Manufactured
Home, or
(2) the Servicer's receipt of written advice of counsel selected
by the Servicer from among the counsel used by the Servicer in the
ordinary course of its business to the effect that a court of competent
jurisdiction sitting in a jurisdiction in which some of the Manufactured
Homes underlying the Contracts are located has held that, solely because
of the failure of a pledgor or assignor of manufactured housing
contracts (whose pledgee or assignee has perfected its security interest
in such contracts) to cause notations to be made on any certificate or
other document of title relating to a manufactured home underlying the
pledged contracts or to execute any transfer instrument (including any
UCC financing statement or UCC-3 assignment) relating to any such
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.
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In connection with the foregoing obligation, the Servicer shall have no
obligation on an ongoing basis to seek any advice of counsel with respect to the
matters described in clause (2) of the preceding paragraph. However, the
Servicer shall seek advice with respect to such matters whenever information
comes to the attention of any of its executive officers which causes such
executive officer to determine that a holding of the type described in such
clause (2) might exist.
(c) Assignment Failure. If an Assignment to the Trustee on behalf of the
Trust of the Seller's interest in a Mortgage securing a Mortgage Loan has not
been recorded within one year after the Closing Date for the related Series of
Certificates (or in the case of Mortgage Loans for which recordation of an
Assignment was initially waived but subsequently required pursuant to Section
2.03(a) hereof, within one year after the Trustee's delivery of the Assignment
to the Servicer for recordation), (1) the Seller shall purchase the related
Mortgage Loan from the Trustee or (2) if there have been no defaults in the
Monthly Payments on such Mortgage Loan, the Seller shall deposit an amount equal
to the Repurchase Price therefor into an escrow account maintained by the
Trustee (which account shall not be an asset of the Trust or any REMIC), or
shall enforce the related Seller's obligation under its Sales Agreement to make
such purchase or deposit. Any such amounts deposited to an escrow account, plus
any earnings thereon, shall (A) be released to the Seller, as the case may be,
upon receipt by the Trustee of satisfactory evidence that the Assignment has
been recorded in the name of the Trustee or (B) be applied to purchase the
related Mortgage Loan in the event that the Servicer notifies the Trustee that
there has been a default thereon. Any amounts in the escrow account may be
invested in Eligible Investments at the written direction of the Seller.
(d) Optional Purchase by Servicer of Defaulted Contracts. At any time
after a Contract has become and remains a Defaulted Contract, the Servicer may,
at its option, purchase such Defaulted Contract from the Trust at the Repurchase
Price therefor in accordance with Section 2.06(e) below.
(e) Manner of Repurchase. Any Asset purchased pursuant to Section
2.06(a), (b), (c) or (d) hereof shall be purchased at the Repurchase Price for
such Asset. The Seller, the Company or the Servicer, as appropriate (any of the
foregoing, a "Repurchaser"), shall deposit into the Certificate Account, on the
date of purchase, the Repurchase Price for each Asset to be purchased. Upon such
deposit and upon being provided by the Repurchaser with appropriate instruments
of transfer or assignment, the Trustee 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.
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The Servicer will be responsible for determining the Repurchase Price
for any Asset (and the related Basis Limit Amount for any Converted Loan) to be
repurchased pursuant to this Section 2.06 and shall certify such amounts to the
Trustee at the time of any such purchase. If, for whatever reason, the Servicer
shall certify to the Trustee that there is a miscalculation of the amount to be
paid to the Trust, the Trustee shall from monies in the Distribution Account
return any overpayment that the Trust received as a result of such
miscalculation to the applicable Repurchaser upon the discovery of such
overpayment, and the Servicer shall collect from the applicable Repurchaser for
payment to the Trustee any underpayment that resulted from such miscalculation
upon the discovery of such underpayment. Recovery may be made either directly or
by set-off of all or any part of such underpayment against amounts owed by the
Trust to such Repurchaser.
(f) Manner of Substitution. Unless otherwise provided in the Pooling and
Servicing Agreement, the right to substitute a Qualified Substitute Asset for
any Replaced Asset that is an asset of the Trust shall be limited to (1) in the
case of substitutions pursuant to Section 2.06(a) or 2.06(c), the two-year
period beginning on the Closing Date and (2) in the case of any other
substitution, the three-month period beginning on the Closing Date.
As to any Replaced Asset for which the Company or the Seller substitutes
a Qualified Substitute Asset or Assets, the Company or the Seller, as the case
may be, shall effect such substitution by delivering to the Trustee for such
Qualified Substitute Asset or Assets a complete Contract File or Trustee
Mortgage Loan File, as appropriate, together with an Officer's Certificate of
the Company or the Seller, as the case may be, to the effect that each such
Qualified Substitute Asset complies with the terms of the Pooling and Servicing
Agreement. Monthly Payments due with respect to Qualified Substitute Assets in
the month of substitution are not part of the Trust and will be retained by the
Company or the Seller, as the case may be. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Replaced Asset during the month in which the substitution occurs, and the
Company or the Seller, as the case may be, shall thereafter be entitled to
retain all amounts subsequently received in respect of such Replaced Asset. The
Servicer shall amend the Asset Schedule to reflect the removal of such Replaced
Asset from the terms of the Pooling and Servicing Agreement and the substitution
of the Qualified Substitute Asset or Assets. Upon such substitution, such
Qualified Substitute Asset or Assets shall be subject to the terms of the
Pooling and Servicing Agreement in all respects, including, in the case of a
substitution effected by the Seller, the representations and warranties included
in the related Sales Agreement, and in the case 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
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Principal Balance of all such Replaced Assets (after application of Monthly
Payments due in the month of substitution) (the "Substitution Shortfall"). On
the date of such substitution, the Company or the Seller, as the case may be,
will deliver or cause to be delivered to the Trustee for deposit from its own
funds into the Distribution Account an amount equal to the Substitution
Shortfall.
(g) Qualification Defect. If any Person required to cure, purchase, or
substitute under Section 2.06(a) above for an Asset affected by a Qualification
Defect fails to perform within the time limit set forth in those subsections,
the Trustee shall dispose of such an Asset in such manner and for such price as
the Servicer advises the Trustee are appropriate, provided that the removal of
such Asset occurs no later than the 90th day from the Defect Discovery Date. It
is the express intent of the parties that an Asset affected by a Qualification
Defect be removed from the Trust before the 90th day from the Defect Discovery
Date so that the related REMIC or Pooling REMIC will continue to qualify as a
REMIC. Accordingly, the Trustee is not required to sell an affected Asset for
its fair market value nor shall the Trustee be required to make up any shortfall
resulting from the sale of such Asset. The person failing to perform under
Section 2.06(a) above shall be liable to the Trust for (1) any difference
between (A) the Unpaid Principal Balance plus accrued and unpaid interest
thereon at the applicable Asset Rate to the date of disposition and (B) the net
amount received by the Trustee from the disposition (after the payment of
related expenses), (2) interest on such difference at the Asset Rate from the
date of disposition to the date of payment and (3) any legal and other expenses
incurred by or on behalf of the Trust in seeking such payments. Except where the
Servicer is the person failing to perform, the Servicer shall pursue the legal
remedies of the Trust on the Trust's behalf and the Trust shall reimburse the
Servicer for any legal or other expenses of the Servicer related to such pursuit
not recovered from such person. If the Servicer is the person failing to
perform, the Trustee shall pursue the Trust's legal remedies against the
Servicer and the Trust shall reimburse the Trustee for its related legal or
other expenses.
(h) Notices. The Company or Seller, as the case may be, upon becoming
aware of such breach, will promptly notify the Trustee of any breach referred to
in this Section 2.06. Any person required under this Section 2.06 to give notice
or to make a request of another person to give notice shall give such notice or
make such request promptly.
ARTICLE III
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
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sales contracts and installment loan agreements for manufactured housing units
located in the jurisdictions in which the Manufactured Homes are located, except
as otherwise expressly provided by the Pooling and Servicing Agreement;
provided, however, that the Servicer shall not release or waive its right to
collect the unpaid principal balance of any Contract. The Servicer shall service
the Mortgage Loans (a) generally in compliance with FNMA standards and (b) in a
manner that is consistent with prudent residential mortgage loan servicing
standards generally accepted within the residential mortgage loan servicing
industry. The manner in which the Servicer services the Assets shall be
consistent with the manner in which the Servicer services all manufactured
housing retail installment sales contracts and residential mortgage loans in its
servicing portfolio, except for any differences specifically required by the
Pooling and Servicing Agreement. The Servicer shall have full power and
authority consistent with the aforementioned standards, acting alone and/or
through agents and designees as permitted by Section 6.07 hereof, to do any and
all things it may deem necessary or desirable in connection with such servicing
and administration; provided, however, that to the extent the Servicer is
prohibited by any applicable rule, regulation, judicial or administrative
determination or other order applicable to it from carrying out any of its
obligations or duties provided for herein or in any document contemplated
herein, such failure shall not constitute a breach of this Agreement.
(b) The Servicer may enter into subservicing agreements with
subservicers for the servicing and administration of all or part of the Assets.
References in this Agreement to actions taken or to be taken by the Servicer in
servicing the Assets include actions taken or to be taken by a subservicer on
behalf of the Servicer. Each subservicing agreement will be upon such terms and
conditions as are not inconsistent with this Agreement and as the Servicer and
the subservicer have agreed. The Servicer shall notify the Trustee in writing
promptly upon the appointment of any subservicer. For purposes of this
Agreement, the receipt by the subservicer of any amount with respect to a
Mortgage Loan or Contract (other than amounts representing servicing
compensation or reimbursement for an advance) shall be treated as the receipt by
the Servicer of such amount.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each subservicer under the related subservicing agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
subservicing agreements as appropriate, and the pursuit of other remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require 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.
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Notwithstanding any subservicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
subservicer or reference to actions taken through a subservicer or otherwise,
the Servicer shall remain obligated and liable to the Trust, the Trustee and
Certificateholders for the servicing and administering of the Assets in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Assets. The Servicer shall be entitled to
enter into any agreement with a subservicer for indemnification of the Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement that may be entered into and any other
transactions or services relating to the Assets involving a subservicer in its
capacity as such and not as an originator shall be deemed to be between the
subservicer and the Servicer alone and the Trustee and Certificateholders shall
not be deemed parties thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the subservicer. The Servicer shall be
solely liable for any fees payable to a subservicer.
If the Servicer shall for any reason no longer be the Servicer
hereunder, the Servicer shall thereupon terminate each subservicing agreement
that may have been entered into and the Trustee, its designee or the successor
servicer shall not be deemed to have assumed any of the Servicer's interest
therein or to have replaced the Servicer as a party to any such subservicing
agreement.
SECTION 3.02. MAINTENANCE OF RECORDS; INSPECTION OF ASSET FILES.
(a) The Servicer shall retain all data relating directly to or
maintained in connection with the servicing of the Assets for any Series at the
address of the Servicer set forth in Section 11.04 hereof or at such other place
where the servicing offices of the Servicer are located.
The Servicer shall permit the Trustee or any authorized agent of the
Trustee reasonable access, upon reasonable prior written notice to the Servicer,
during the Servicer's normal business hours, to the Asset Files, the Servicer
Files, and the Servicer's other records, if any, relating to the Assets for any
related Series. Any such examination of such files or records will be conducted
in a manner that does not 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.
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(c) On or before the date of the Servicer's delivery of the Remittance
Report to the Trustee in any month, the Servicer will, upon the written request
of the Trustee, provide to the Trustee a list of outstanding Assets, setting
forth the Scheduled Principal Balance of each such Asset as of the preceding
Distribution Date.
(d) Notwithstanding the provisions of this Section 3.02, the Trustee
shall at no time have any duty or obligation to examine any records of the
Servicer or to recalculate or otherwise verify the accuracy of any certificate
or report prepared by the Servicer, and no implied duty to do so shall be
asserted against the Trustee.
(e) On or before the Closing Date for a Series, the Servicer shall
deliver to the Trustee a list of Officers of the Servicer (each a "Servicing
Officer") involved in, or responsible for, the administration and servicing of
the Assets underlying such Series, which list shall be amended from time to time
as necessary by the Servicer by delivery of an amended list of Servicing
Officers to the Trustee.
SECTION 3.03. COLLECTION OF PAYMENTS ON ASSETS; SERVICING DELINQUENT ACCOUNTS.
Continuously from the Cut-off Date until the earliest to occur of the
following with respect to each Asset sold to the Trust in connection with the
issuance of the Certificates: (i) the principal and interest on such Asset are
paid in full, (ii) such Asset is foreclosed and the related Manufactured Home or
Mortgaged Property is liquidated pursuant to Section 3.08 hereof, (iii) all of
the proceeds of a liquidating claim under the Standard Hazard Insurance Policy
relating to such Asset have been deposited to the Certificate Account, or (iv)
the Liquidation Proceeds relating to such Asset have been deposited to the
Certificate Account, the Servicer will proceed diligently and in a manner
consistent with its standards for servicing Assets described in Section 3.01
above, to collect all payments due under each Asset when such payments become
due and payable and to apply such payments in accordance with Sections 3.05,
3.06 and 3.07 hereof.
SECTION 3.04. ADVANCES.
(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
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such Repo Property or REO Property (except as similar coverage may be provided
under a blanket policy maintained by the Servicer pursuant to Section 3.16
below) unless the Servicer, in its reasonable judgment, determines that any such
Servicing Advance would be a Non-Recoverable Advance.
(b) P&I Advances. If any Obligor fails to make a Monthly Payment by the
related Remittance Date, the Servicer shall deposit such amount in the
Distribution Account on or before such Remittance Date, as a "P&I Advance,"
unless the Servicer, in its reasonable judgment, determines that any such P&I
Advance would be a Non-Recoverable Advance, or such Monthly Payment can be
offset by Early Payments, as provided in Section 3.07(c) hereof. In addition, if
the Certificate Account is maintained with the Trustee, the Servicer may
instruct the Trustee to use any investment earnings on such account to defray
its P&I Advance obligation, and the Trustee shall honor any such instructions
(including standing instructions).
(c) Recovery of Advances. The Servicer shall be entitled to
reimbursement for any Advances made by it in respect of any Asset out of late
collections from the related Obligor or from Insurance Proceeds, Liquidation
Proceeds or a Repurchase Price recovered by it in respect of such Asset
("Related Proceeds") and shall be entitled to reimburse itself for unreimbursed
Advances made that have become Non-Recoverable Advances in accordance with
Section 3.07(a)(1) below.
(d) Non-Recoverable Advances. If the Servicer does not make an Advance
on the grounds that it is a Non-Recoverable Advance, or if an Advance previously
made by the Servicer is determined by the Servicer to have become a
Non-Recoverable Advance, then the Servicer shall provide the Trustee with an
Officer's Certificate stating this fact and stating the basis upon which the
Servicer determined that such Advance would be or was a Non-Recoverable Advance.
The Trustee shall not be responsible for determining whether any such
determination was reasonable.
SECTION 3.05. [RESERVED]
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
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received by it on each Outstanding Asset on or after the effective date of the
related Pooling and Servicing Agreement (including: (1) all Obligor payments in
respect of principal, including principal prepayments, on the Contracts and
Mortgage Loans; (2) all Obligor payments in respect of interest on the Contracts
and Mortgage Loans, together with moneys transferred from any Buy-Down Fund or
GPM Fund; (3) all Net Liquidation Proceeds received and retained in connection
with the liquidation or disposition of defaulted Contracts, Mortgage Loans or
property acquired in respect thereof through repossession, foreclosure or
otherwise; (4) all proceeds received under any title, hazard or other insurance
policy covering any Contract or Mortgage Loan, other than proceeds received as
part of Liquidation Proceeds or such proceeds that are to be applied to the
restoration or repair of the related Manufactured Home or Mortgaged Property or
released to the Obligor; (5) any condemnation awards or settlements which are
not released to Obligors in accordance with normal servicing procedures; (6) all
amounts received from credit enhancement provided with respect to a Series of
Certificates; (7) all proceeds of any Contract or Mortgage Loan (or property
acquired in respect thereof) that is repurchased by the related Seller or by a
terminating party; and (8) all amounts, if any, required to be transferred to
the Certificate Account from a Reserve Fund pursuant to the Agreement, but
excluding any prepayment fees, assumption fees or any fees imposed in connection
with the replacement by such Obligors or the related standard Hazard Insurance
Policy), except amounts collected in respect of Monthly Payments due prior to
the Cut-off Date. On or prior to the Closing Date, the Servicer shall deposit
into the Certificate Account all installments of principal and interest due on
the Assets on or after the Cut-off Date and received by the Servicer prior to
the Closing Date, plus each Principal Prepayment of any Asset (including any
related payment of interest) received by the Servicer on or after the Cut-off
Date but prior to the Closing Date.
(c) Amounts on deposit in the Certificate Account shall be invested at
the written direction of the Servicer in Eligible Investments, and earnings on
amounts deposited in such account shall be credited to the account of the
Servicer as servicing compensation in addition to the Servicing Fee and shall
offset P&I Advances due from the Servicer in respect of the Distribution Date
next succeeding the date on which such earnings were made or, in the alternative
at the Servicer's option, may be released to the Servicer on such Distribution
Date. The amount of any losses incurred in respect of any such investments shall
be 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;
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(2) to pay any Servicing Fees and other servicing compensation
provided for herein due to the Servicer; provided, however, that if BCI
is the Servicer and a Servicing Fee Event is not in effect, it shall
only be entitled to withdraw its Servicing Fee in respect of any
Distribution Date from the Certificate Account in accordance with this
clause to the extent the amounts on deposit in the Certificate Account
and attributable to the Available Distribution Amount for such
Distribution Date exceed the sum of all amounts to be distributed on the
Certificates of the related Series on such Distribution Date prior to
the distribution to BCI of its Servicing Fees as described in the
related Pooling and Servicing Agreement in the Section thereof entitled
"Distributions"; and
(3) to enable the Servicer to remit the Remittance Amount on each
Remittance Date, as described in Section 3.07(b) below.
(b) Remittance Dates. On or prior to the Remittance Date for any
Distribution Date, the Servicer shall remit the Remittance Amount for such
Distribution Date, from and to the extent of the funds in the Certificate
Account, plus all required P&I Advances, by wire transfer or otherwise, in
immediately available funds, for distribution in accordance with Section 4.02.
If the Certificate Account is maintained by the Trustee, on each Remittance
Date, the Servicer shall notify the Trustee as to the amount of the related
Remittance Amount and the amount of all required P&I Advances to be covered by
investment earnings on the Certificate Account, and the Trustee shall distribute
such amount in accordance with Section 4.02 on the related Distribution Date. In
such event, the Servicer shall still remit any P&I Advances not covered by
investment earnings on the Certificate Account to the Trustee for distribution
in accordance with Section 4.02 on the Remittance Date.
Notwithstanding the foregoing, if a Terminating Purchase is to be made
on such Distribution Date, and the Servicer shall have received the Termination
Price or shall be the Terminator, the Servicer shall remit the Termination Price
rather than the Remittance Amount to the Trustee for distribution in accordance
with Section 4.02.
(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.
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(a) The Servicer shall repossess, foreclose upon or otherwise comparably
convert the ownership of any Manufactured Home and any related Real Property and
any Mortgaged Property securing an Asset that comes into and continues in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.03 hereof. In connection with such
repossession, foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual for responsible holders of retail installment sales contracts
and installment loan agreements for manufactured housing (in the case of
defaulted Contracts) and for responsible holders of residential, one- to
four-family mortgage loans (in the case of defaulted Mortgage Loans) and as
shall be in compliance with all applicable laws; provided, that such practices
and procedures shall be, in all circumstances, undertaken with a view toward
maximizing the amount of principal and interest recovered on the Assets.
(b) The Servicer may commence and prosecute any Proceedings in respect
of any Asset in default in its own name on behalf of the Trust or, if the
Servicer deems it necessary, in the name of the Trust. If the Servicer elects to
commence a Proceeding to enforce an Asset, the act of commencement shall be
deemed to entail an automatic assignment of the Asset to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding in which the Servicer seeks to collect payments due on any Asset, it
is held that the Servicer lacks standing to enforce an Asset (or otherwise is
not permitted to enforce an Asset) on the grounds that it is not a real party in
interest or a holder entitled to enforce the Asset, the Trustee, on behalf of
the Trust, shall take such steps as the Servicer deems necessary to enforce the
Asset, including bringing suit in its name or in the names of the Trust. Any
such action by the Trustee shall be taken at the Servicer's expense, but such
expenses (including, without limitation, attorneys' fees) shall be deemed
Liquidation Expenses which the Servicer shall have no obligation to incur to the
extent it makes a good faith determination that such Liquidation Expenses will
not be recoverable out of Liquidation Proceeds of the related Asset.
(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.
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(e) Notwithstanding any of the foregoing, the Servicer shall not
repossess, foreclose upon or otherwise comparably convert the ownership of any
Manufactured Home, Real Property or Mortgaged Property securing an Asset in
cases where the Servicer has actual knowledge that the Manufactured Home, Real
Property or Mortgaged Property is situated on a toxic waste site as determined
by the United States Environmental Protection Agency or other comparable federal
or state agency and where, in the good faith judgment of the Servicer, the
liabilities that would be imposed upon the Trust with respect to such toxic
waste site would exceed the Net Liquidation Proceeds that could be realized upon
liquidation of the related Asset. The Servicer shall have no affirmative duty or
obligation to determine whether any Manufactured Home, Real Property or
Mortgaged Property is situated on a toxic waste site. The Servicer shall not be
liable to the holders of any Certificates if the Servicer forecloses on a
Mortgaged Property or Real Property and takes title to a Mortgaged Property or
Real Property that is so contaminated or effected.
SECTION 3.09. TITLE, CONSERVATION, AND DISPOSITION OF REPO PROPERTY AND
REO PROPERTY.
(a) The Servicer shall maintain, protect, and insure any Repo Property
or REO Property acquired pursuant to Section 3.08 hereof, on behalf of the
Trust, in accordance with standard industry practice solely for the purpose of
its prompt disposition and sale and with a view toward maximizing the amount of
principal and interest recovered on the Assets. During any period in which the
Trust holds a Repo Property or REO Property, the Servicer shall not (1) lease
the Repo Property or REO Property, (2) authorize or permit any construction on
the Repo Property or REO Property, other than the completion of a building or
improvement thereon, and then only if more than 10% of the construction of such
building or other improvement was completed before default on the related Asset
became imminent, all within the meaning of section 856(e)(4)(B) of the Code, or
(3) allow the Repo Property or REO Property to be used in any trade or business
conducted by the Trust. If one or more REMIC elections are made with respect to
the assets of the Trust, the Servicer shall use its best efforts to dispose of
such Repo Property or REO Property for its fair market value within 12 months
after its acquisition by the Trust pursuant to the Servicer's ordinary
commercial practices. If the Servicer is unable to sell such Repo Property or
REO Property in the course of its ordinary commercial practices within that
12-month period, the Servicer shall (i) purchase such Repo Property or REO
Property at a price equal to such Repo Property's or REO Property's fair market
value or (ii) auction such Repo Property or REO Property to the highest bidder
in an auction reasonably designed to produce a fair price (an "Auction") that
takes place within one month after the end of the 12-month period. If the
Servicer and the Trustee either (1) receive an Opinion of Counsel indicating
that, under then-current law, the REMIC may hold Repo Property or REO Property
associated with a REMIC Asset for a period longer than 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 12-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
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to be made with respect to the assets of the Trust, the 12-month period for
disposing of any Repo Property or REO Property as described in the preceding two
sentences shall be an eleven-month period. The Servicer shall either sell any
Repo Property or REO Property remaining after such date in an Auction or
purchase such Repo Property or REO Property (at the price set forth in this
paragraph) before the end of the Extended Holding Period. In the event of any
such sale of a Repo Property or REO Property, the Trustee shall, at the written
request of the Servicer and upon being supplied with appropriate forms therefor,
within five Business Days after its receipt of the proceeds of such sale or
auction, instruct the Servicer to release to the purchaser the related Contract
File and Servicer Contract File (in the case of a Repo Property), and the
Trustee shall release to the purchaser the related Trustee Mortgage Loan File
and shall instruct the Servicer to release to the purchaser the related Servicer
Mortgage Loan File (in the case of a Mortgage Loan), and in any event the
Trustee shall execute and deliver such instruments of transfer or assignment
provided to it, in each case without recourse, representation or warranty, as
shall be necessary to vest in the auction purchaser title to the Repo Property
or REO Property, and shall deliver to such purchaser any Asset Documents
relating to such Contract that are in the Trustee's possession, whereupon the
Trustee shall have no further responsibility with regard to any related Asset
File or Servicer File. Neither the Trustee nor the Servicer, acting on behalf of
the Trust, shall provide financing from such Trust to any purchaser of a Repo
Property or REO Property.
(b) In the event that title to any Repo Property or REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee on
behalf of the Trust for the benefit of the Certificateholders. The Servicer
shall, in accordance with Section 3.09(a), use its reasonable efforts to sell
any Repo Property or REO Property as expeditiously as possible, but in all
events within the time period, and subject to the conditions set forth in
Section 3.09(a) hereof. Pursuant to its efforts to sell such Repo Property or
REO Property, the Servicer shall either itself or through an agent selected by
the Servicer protect and conserve such Repo Property or REO Property in the same
manner and to such extent as it 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
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existing at the time of disposition and upon such terms and conditions as the
Servicer shall deem necessary or advisable, and as are in accordance with
accepted servicing practices and in accordance with Section 3.09(a) above.
(f) The Liquidation Proceeds from the final disposition of any Repo
Property or REO Property shall be deposited into the Certificate Account
promptly following receipt of such Liquidation Proceeds and, subject to such
withdrawals as may be permitted by Section 3.07(a) above, shall be transferred
to the Distribution Account pursuant to Section 3.07(b) above.
(g) The Servicer shall prepare and file reports of foreclosure and
abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, the Servicer,
acting on behalf of the Trustee hereunder, shall not rent, lease, or otherwise
earn income or take any action on behalf of the Trust with respect to any REO
Property that might (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) result in the receipt by any related REMIC of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the Code or
any "net income from foreclosure property" within the meaning of section
860G(c)(2) of the Code, both of which types of income are subject to tax under
the REMIC Provisions, unless the Trustee has received an Opinion of Counsel at
the Trust's expense (the costs of which shall be recoverable out of the
applicable Certificate Account), to the effect that, under the REMIC Provisions
and any relevant proposed legislation, any income generated for any related
REMIC by the REO Property would not result in the imposition of a tax upon such
REMIC.
Without limiting the generality of the foregoing, the Servicer shall
not:
(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; DISTRIBUTION OF REMITTANCE AMOUNT.
(a) The Trustee shall establish and maintain a Distribution Account for
the benefit of the Certificateholders. The Distribution Account shall be an
Eligible Account and shall be either held in the Trustee's name or designated in
a manner that reflects the custodial nature of the account and that all funds in
such account are held in trust for the benefit of the Trustee. The Trustee shall
deposit into the Distribution Account amounts remaining after all other
distributions have been made in accordance with Section 4.02(b)(1) though (4)
below.
(b) The Trustee shall, in accordance with the related Remittance Report,
distribute from the Certificate Account the Remittance Amount in the following
order of priority:
(1) if BCI is not the Servicer or BCI is the Servicer and a
Servicing Fee Event has occurred, to pay the Servicer its monthly
Servicing Fee, to the extent not previously retained or withdrawn from
the Certificate Account by such Servicer or, if BCI is the Servicer and
a Servicing Fee Event is not in effect, to pay BCI its monthly Servicing
Fee in respect of a Distribution Date, but only to the extent that the
amounts on deposit in the Certificate Account and attributable to the
Remittance Amount for such Distribution Date exceed the sum of all
amounts to be distributed on the Certificates of the related Series on
such Distribution Date prior to the distribution to BCI of its Servicing
Fee, as described in the related Pooling and Servicing Agreement in the
Section thereof entitled "Distributions";
(2) to reimburse the Servicer from any amounts on deposit in the
Distribution Account for any Advance previously made which has become a
Non-Recoverable Advance, or to reimburse the Servicer for any other
Advance out of Related Proceeds on deposit in the Distribution Account,
in either case to the extent not previously retained or withdrawn from
the Certificate Account by the Servicer;
(3) to reimburse the Company or the Servicer for expenses
incurred by or reimbursable to them pursuant to Section 6.05 hereof;
(4) to refund any overpayment of a Repurchase Price for an Asset
pursuant to Section 2.06(f) hereof; and
(5) for deposit into the Distribution Account.
The Servicer shall keep and maintain separate accounting, on an
Asset-by-Asset basis, for the purpose of justifying any payment to and from the
Distribution Account.
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SECTION 4.03. ALLOCATION OF AVAILABLE DISTRIBUTION AMOUNT.
On each Distribution Date for a Series, the Trustee shall withdraw all
monies on deposit in the related Distribution Account in accordance with the
related Remittance Report and shall distribute to the Certificateholders (or, if
more than one REMIC election has been made with respect to the Trust, to
distribute to the holders of the Regular Interests and the Residual Interest in
the Pooling REMIC), the amount of the Available Distribution Amount in
accordance with the applicable Pooling and Servicing Agreement.
SECTION 4.04. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Trustee shall comply with all federal withholding requirements
respecting payments of interest or principal to the extent of accrued original
issue discount on Certificates to each Holder of such Certificates who (a) is
not a "United States person," within the meaning of Code section 7701(a)(30),
(b) fails to furnish its TIN to the Trustee, (c) furnishes the Trustee an
incorrect TIN, (d) fails to report properly interest and dividends, or (e) under
certain circumstances, fails to provide the Trustee or the Certificateholder's
securities broker with a certified statement, signed under penalties of perjury,
that the TIN provided by such Certificateholder to the Trustee or such broker is
correct and that the Certificateholder is not subject to backup withholding. The
consent of such a Certificateholder shall not be required for such withholding.
In the event the Trustee does withhold the amount of any otherwise required
distribution from interest payments on the Assets (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
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the related Remittance Report, (b) the Record Date for such distribution, (c)
the Distribution Date for such distribution and (d) the aggregate Certificate
Principal Balance of each Class of Certificates reported pursuant to clause (10)
of Section 4.01 hereof in such month.
SECTION 4.06. PREPARATION OF REGULATORY REPORTS.
(a) Subject to the provisions of subsections (b) and (c) of this Section
4.06, the Servicer shall prepare or cause to be prepared, on behalf of the
Trust, such supplementary and periodic information, documents and reports (such
information, documents or reports are referred to hereinafter as "Periodic
Reports") as may be required pursuant to Section 12(g) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), by the rules
and regulations of the Commission thereunder or as a condition to approval of
any application for relief ("Application for Relief") hereinafter referred to
and, in connection therewith, shall prepare such applications and requests for
exemption and other relief from such provisions as it may deem appropriate. The
Servicer shall be deemed to certify as to each Periodic Report that it conforms
in all material respects to applicable reporting requirements imposed by the
Exchange Act or is otherwise in form and content appropriate for filing with the
Commission. The Servicer is hereby authorized to and shall execute all such
Periodic Reports or Applications for Relief on the Trustee's behalf and file the
same with the Commission and other required filing offices, if any, on behalf of
the Trust.
(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
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does not appear on the Certificate Register, including any information
concerning the ownership of Persons for whom a nominee is the Holder of record.
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
SECTION 5.01. POOLING REMIC INTERESTS.
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Pooling and Servicing Agreement will set forth the terms of
the Regular Interests and Residual Interest of the Pooling REMIC. Unless
otherwise specified in the Pooling and Servicing Agreement, (a) the Pooling
REMIC Regular Interests will be "regular interests" for purposes of the REMIC
Provisions but will not constitute securities or certificates of interest in the
Trust; and (b) the Trustee will be the owner of any such Regular Interests,
which may not be transferred to any person other than a successor trustee
appointed pursuant to Section 8.08 hereof unless the party desiring the transfer
obtains a Special Tax Opinion.
SECTION 5.02. THE CERTIFICATES.
The Certificates shall be designated in the Pooling and Servicing
Agreement. The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Trust Estate (or in the Issuing 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
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evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication,
except that those Certificates delivered on the Closing Date may be dated the
Accrual Date.
The Trust in issuing the Certificates may use "CUSIP" or "private
placement" numbers (if then generally in use), and, if so, the Trustee shall
indicate the "CUSIP" or "private placement" numbers of the Certificates in
notices of redemption and related materials as a convenience to
Certificateholders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Certificates or as contained in any notice of redemption and related
materials.
SECTION 5.03. BOOK-ENTRY CERTIFICATES.
(a) The Book-Entry Certificates will be represented initially by one or
more certificates registered in the name of CEDE & Co., as nominee of the
Clearing Agency. The Company, the Servicer and the Trustee and its officers,
directors, employees and agents may for all intents and purposes (including the
making of payments on the Book-Entry Certificates) deal with the Clearing Agency
as the authorized representative of the Beneficial Owners of the Book-Entry
Certificates for as long as those Certificates are registered in the name of the
Clearing Agency. The rights of Beneficial Owners of the Book-Entry Certificates
shall be limited to those established by law and agreements between such
Beneficial Owners and the Clearing Agency and Clearing Agency Participants. The
Beneficial Owners of the Book-Entry Certificates shall not be entitled to
certificates for the Book-Entry Certificates as to which they are the Beneficial
Owners, except as provided in subsection (c) below. Requests and directions
from, and votes 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
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Agency, which in turn will notify all Beneficial Owners of Book-Entry
Certificates through Clearing Agency Participants, of the availability of
certificated Certificates. Upon surrender by the Clearing Agency of the
certificates representing the Book-Entry Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Book-Entry
Certificates as certificated Certificates to the Beneficial Owners identified in
writing by the Clearing Agency. Such certificated Certificates shall not
constitute Book-Entry Certificates. All reasonable costs associated with the
preparation and delivery of certificated Certificates shall be borne by the
Company.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee will
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
If a Person other than the Trustee is appointed by the Trustee as
Certificate Registrar, such Person will give the Trustee prompt written notice
of the location, and any change in the location, of the Certificate Register,
and the Trustee shall have the right to inspect the Certificate Register at all
reasonable times and to obtain copies thereof, and the Trustee shall have the
right to rely upon a certificate executed on behalf of the Certificate Registrar
by an Officer thereof as to the names and addresses of the Holders of the
Certificates and the principal amounts and numbers of such Certificates.
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
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governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be
destroyed by the Trustee.
The Trustee will (or will cause the Certificate Registrar to) provide
notice to the Trustee of each transfer of a Certificate, and will provide the
Trustee and Servicer with an updated copy of the Certificate Register on January
1 and July 1 of each year (or at such other time as the Servicer may request).
SECTION 5.05. RESTRICTIONS ON TRANSFER.
(a) Securities Law Compliance. No transfer of any Private Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify the Company, the Trustee and the Servicer against any liability that
may result if any transfer of such Certificates by such Holder is not exempt
from registration under the Securities Act and all applicable state securities
laws or is not made in accordance with such federal and state laws. Neither the
Company, the Trustee nor the Servicer is obligated to register or qualify any
Private Certificate under the Securities Act or any other securities law or to
take any action not otherwise required under these Standard Terms or the related
Pooling and Servicing Agreement to permit the transfer of such Certificates
without such registration or qualification. The Trustee shall not register any
transfer of a Private Certificate (other than a Residual Certificate) unless and
until the prospective transferee provides the Trustee with a Transferee
Agreement or, if the Certificate to be transferred is a Rule 144A Certificate, a
Rule 144A Agreement certifying to facts which, if true, would mean that the
proposed transferee is a 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.
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The Company shall provide to any transferee Holder of a Rule 144A
Certificate and any prospective transferee designated by such Holder information
regarding the related Certificates and the related Assets and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A, upon the request for such information by such
Holder.
(b) ERISA Compliance.
(1) Book-Entry Certificates. No transfer of all or any portion of
any Class of Book-Entry Certificates that are ERISA Restricted
Certificates shall be made to a transferee that is a Plan Investor, and
each Beneficial Owner of such a Certificate shall be deemed to have
represented, by virtue of its acquisition of such a Certificate, that it
is not a Plan Investor.
(2) Certificated Certificates. No transfer of all or any portion
of any Class of Certificates that (A) are not Book-Entry Certificates
and (B) are ERISA Restricted Certificates shall be made unless and until
the prospective transferee provides the Trustee and the Servicer with a
properly completed and executed Benefit Plan Affidavit, together with a
Benefit Plan Opinion if required in order to comply with such Affidavit.
Notwithstanding anything else to the contrary herein, any purported
transfer of such a Certificate to or on behalf of a Plan Investor
without delivery of a Benefit Plan Opinion shall be null and void.
(c) Residual Certificates. The Trustee shall not register any transfer
of a Residual Certificate (including any beneficial interest therein) unless it
shall have received the written consent of the Servicer. No Residual Certificate
may be transferred to a Disqualified Organization. The Servicer will not consent
to any proposed transfer or sale of a Residual Certificate (1) to any investor
that it knows is a Disqualified Organization or (2) if the transfer involves
less than an entire interest in a Residual Certificate, unless (A) 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
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of the prerequisites described above, the Servicer may withhold its consent to,
or the Trustee may refuse to recognize, a transfer of a Residual Certificate,
but only to the extent necessary to avoid a risk of disqualification as a REMIC
of a REMIC consisting of Trust assets or the imposition of a tax upon a REMIC.
Any attempted transfer in violation of the foregoing restrictions shall be null
and void and shall not be recognized by the Trustee.
If a tax or a reporting cost is borne by a REMIC consisting of Trust
assets as a result of the transfer of a Residual Certificate or any beneficial
interest therein in violation of the restrictions set forth in this Section, the
transferor shall pay such tax or cost and, if such tax or cost is not so paid,
the Trustee, upon notification from the Servicer, shall pay such tax or cost or
may pay such tax or reporting cost with amounts that otherwise would have been
paid to the transferee of the Residual Certificate (or beneficial interest
therein). In that event, neither the transferee nor the transferor shall have
any right to seek repayment of such amounts from the Company, the Trustee, the
REMIC, the Servicer, or the other Holders of any of the Certificates, and none
of such parties shall have any liability for payment of any such tax or
reporting cost. In the event that a Residual Certificate is transferred to a
Disqualified Organization, the Servicer shall make, or cause to be made,
available the information necessary for the computation of the excise tax
imposed under section 860E(e) of the Code.
SECTION 5.06. ACCRUAL OF INTEREST ON THE CERTIFICATES.
Certificates entitled to receive interest in accordance with the related
Pooling and Servicing Agreement shall accrue interest at the applicable
Pass-Through Rates on the basis of a 360-day year consisting of twelve 30-day
months and on the assumption that each Interest Accrual Period consists of 30
days.
SECTION 5.07. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft 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 if the Servicer is contesting such decree or order in force, the
remaining of such decree or order in force undischarged or unstayed for a period
of 60 consecutive days;
(d) the Servicer's consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of, or relating to, the Servicer
or of, or relating to, all or substantially all of the property of the Servicer;
or
(e) the Servicer's (1) admission in writing of its inability to pay its
debts generally as they become due, (2) filing of a petition to take advantage
of, or commence a voluntary case under, any present or future federal or state
bankruptcy, insolvency or reorganization statute, (3) making of an assignment
for the benefit of its creditors, or (4) voluntarily suspending payment of its
obligations.
If an Event of Default concerning the Servicer shall occur hereunder,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied or waived, the
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Trustee may, and at the direction of the Holders of Certificates evidencing
greater than 50% of the Voting Rights, shall, by notice then given in writing to
the Servicer, terminate all of the rights and obligations of the Servicer as
servicer. On and after the receipt by the Servicer of any such written notice,
all authority and power of the Servicer hereunder, whether with respect to the
Certificates (except its rights as a Holder thereof) or the Contracts or
otherwise, shall pass to and be vested in the Trustee or successor servicer
pursuant to and under this Section 7.01 (provided, however, that the Servicer
shall continue to be entitled to receive all amounts accrued and owing to it as
Servicer under the Pooling and Servicing Agreement on or prior to the occurrence
of a Event of Default specified in Section 7.01(a) above or, in the case of any
other Event of Default, on or prior to the date of such termination); and,
without limitation, the Trustee hereby is authorized and empowered on behalf of
the Servicer, as attorney-in-fact or otherwise, to execute and deliver any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Contracts and related documents or otherwise.
The Servicer shall cooperate with the Trustee in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, (1) transferring to the Trustee for
administration by it of all cash amounts that shall be held at the time by the
Servicer for deposit, shall have been deposited by the Servicer into the
Servicing Account, the Certificate Account or the Distribution Account, or shall
be received thereafter with respect to a Contract, and (2) the prompt provision
to the Trustee (in no event later than ten Business Days subsequent to its
receipt of such notice of termination) of all documents and records, electronic
and otherwise, reasonably requested by the Trustee or its designee in order for
the Trustee or its designee to assume and carry out the duties and obligations
that otherwise were to have been performed and carried out by the Servicer under
the Pooling and Servicing Agreement but for the termination of the Servicer.
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
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therefor, the Trustee, except as provided in Section 7.01 hereof, shall be
entitled to such compensation (whether payable out of the Distribution Account
or otherwise) as the Servicer would have been entitled to receive hereunder if
no such notice of termination had been given, as well as all protections and
indemnification afforded the Servicer pursuant to Section 6.05 above.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint, or petition a court of
competent jurisdiction to appoint, any established housing finance institution
having a net worth of not less than $40,000,000 and the regular business of
which shall have included, for at least one year prior to such appointment, the
servicing of a portfolio of manufactured housing receivables of not less than
$100,000,000, as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. No appointment of a successor to the Servicer shall be effective
until the assumption by the successor of all future responsibilities, duties and
liabilities of the Servicer under the Pooling and Servicing Agreement. Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee or an Affiliate of the Trustee
shall act as Servicer hereunder as provided above. Notwithstanding any of the
foregoing, the successor Servicer shall not be required to purchase any Assets
from the Trust pursuant to these Standard Terms except (i) under Section
2.06(a)(2) hereof to the extent the obligation to repurchase arose out of a
breach of a representation, warranty or covenant by the successor Servicer and
(ii) under Section 2.06(b) hereof to the extent the Servicer's obligation to
effect remedial action as described in such Section arose after the successor
Servicer began serving as Servicer. It is understood that any predecessor
Servicer shall remain liable for any breaches of representations, warranties and
covenants that it committed while it was the Servicer, and shall remain
responsible for effecting remedial actions described in Section 2.06(b) hereof
(and for repurchasing Assets pursuant to such Section 2.06(b)) to the extent the
obligation to undertake such remedial action arose while such predecessor
Servicer was the Servicer hereunder.
In connection with the appointment of a successor Servicer, the Trustee
may make such arrangements for the compensation of such successor servicer out
of payments on the related Assets as 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
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each and every remedy shall be cumulative and in addition to any other remedy
and no delay or omission to exercise any right or remedy shall impair any such
right or remedy or shall be deemed to be a waiver of any Event of Default.
Amounts payable to the Trustee to reimburse it for any expenses it incurs in
connection with any actions taken by it pursuant to this paragraph are intended
to constitute administrative expenses. Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or vote for or accept or
adopt on behalf of any Certificateholder any plan of reorganization,
arrangement, adjustment or composition affecting the Certificates or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Certificateholder in any such Proceeding.
For the purposes of this Section 7.02 and Section 7.03 hereof, the
Trustee shall not be deemed to have knowledge of a Default or an Event of
Default hereunder unless an Officer of the Trustee having direct responsibility
for the administration of the Pooling and Servicing Agreement has actual
knowledge thereof or unless written notice of any Event of Default is received
by the Trustee and such notice references the Certificates or the Trust.
SECTION 7.03. NOTIFICATIONS TO SERVICER AND TO CERTIFICATEHOLDERS.
(a) Upon obtaining actual knowledge of any Default, the Trustee shall
promptly notify the Servicer and each Certificateholder (at their respective
addresses appearing in the Certificate Register) thereof.
(b) Upon any termination of, or appointment of a successor to, the
Servicer pursuant to Section 7.02 hereof, the Trustee shall give prompt written
notice thereof to the Certificateholders at their respective addresses appearing
in the Certificate Register.
(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
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exercise such of the rights and powers vested in it by the Pooling and Servicing
Agreement, and shall use the same degree of care and skill in their exercise, as
a corporate trustee would exercise or use under the circumstances in the
administration of a corporate trust agreement.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of the Pooling and Servicing Agreement, shall examine them to determine whether
they conform to the requirements of the Pooling and Servicing Agreement;
provided, however, that the Trustee shall be under no duty to recalculate,
verify or recompute the information provided to it hereunder by the Company or
the Servicer. If any such instrument is found not to conform to the requirements
of the Pooling and Servicing Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee will
provide notice thereof to the related Certificateholders.
No provision of the Pooling and Servicing Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(a) prior to the occurrence of an Event of Default with respect to the
Servicer of which the Trustee has notice or knowledge, and after the curing or
waiver of any such Event of Default, the duties and obligations of the Trustee
shall be determined solely by the express provisions of the Pooling and
Servicing Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in the Pooling and
Servicing Agreement, no implied covenants or obligations shall be read into the
Pooling and Servicing Agreement against the Trustee and, in the absence 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
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evidence) thereof in a proceeding before a court of competent jurisdiction in
which the Trustee has had an opportunity to defend; and
(e) in no event shall the Trustee be held liable for the actions or
omissions of the Servicer or the Company (excepting the Trustee's own actions as
Servicer), and in connection with any action or claim or recovery sought against
the Trustee based upon facts involving the acts or omissions of the Servicer or
the Company, or involving any allegation or claim of liability or recovery
against the Trustee by the Servicer or by the Company, the Trustee shall not be
held to a greater standard of care than the Servicer or the Company would be
held in such situation.
Except as specifically required herein, the Trustee shall not be
required to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or indemnity reasonably satisfactory to
it against such risk or liability is not reasonably assured to it.
SECTION 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 8.01 hereof:
(1) In the absence of bad faith, the Trustee may rely, and shall
be protected in acting or refraining from acting in reliance upon, any
resolution, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Further, the
Trustee may accept a copy of the vote of the Board of 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
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any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions
of the Pooling and Servicing Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein
or thereby.
(5) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Holders of Certificates of a Series entitled to at least 25% of the
related Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation, in the
opinion of the Trustee, is not assured to the Trustee by the security
afforded to it by the terms of the Pooling and Servicing Agreement, the
Trustee may require indemnity against such expense or liability as a
condition to taking any such action. The expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee,
shall be repaid by the Servicer upon demand.
(6) The Trustee may execute any of the trusts or powers under the
Pooling and Servicing Agreement or perform any duties hereunder either
directly or by or through agents, attorneys, custodians or nominees and
the Trustee shall not be responsible for any misconduct or negligence on
the part of or for supervision of, any agent, attorney, custodian or
nominee appointed with due care and in good faith by it under the
Pooling and Servicing Agreement.
(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.
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(11) In the event that the Trustee is also acting as Custodian,
Paying Agent or Transfer Agent or Certificate Registrar hereunder, the
rights and protections afforded to the Trustee pursuant to this Article
VIII shall also be afforded to the Custodian, Paying Agent, Transfer
Agent and Certificate Registrar.
(12) In no event shall the Trustee be liable for the selection of
Eligible Investments or for investment losses incurred thereon. The
Trustee shall have no liability in respect of losses incurred as a
result of the liquidation of any Eligible Investment prior to its stated
maturity or the failure of the Servicer to provide timely written
investment direction. The Trustee shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of written investment
direction.
(13) The Trustee shall have no duty to monitor the performance of
the Company or the Servicer, nor shall it have any liability in
connection with the malfeasance or nonfeasance by the Company or the
Servicer. The Trustee shall have no liability in connection with
compliance by the Company or the Servicer with statutory or regulatory
requirements related to the Contracts or the Mortgage Loans. The Trustee
shall not make or be deemed to have made any representations or
warranties with respect to the Assets or the validity or sufficiency of
any assignment of the Assets to the Trust or the Trustee.
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.
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SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES.
The Trustee, in its individual capacity or any other capacity, may
become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.
SECTION 8.05. TRUSTEE'S FEES AND EXPENSES.
The Servicer shall pay to the Trustee from time to time, pursuant to the
Pooling and Servicing Agreement or a separate fee agreement, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts created under the Pooling and Servicing
Agreement and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and shall reimburse the Trustee for all reasonable
expenses, disbursements and advances (other than any expenses incurred by the
Trustee in connection with its assumption of the obligations of the Servicer
pursuant to Section 7.02 hereof) incurred or made by the Trustee in accordance
with any of the provisions of the Pooling and Servicing Agreement (including but
not limited to the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Servicer and held harmless against any loss, liability or
expense, including reasonable attorney's fees and expenses, incurred as a result
of or in connection with the Pooling and Servicing Agreement or the
Certificates, including, but not limited to, any such loss, liability, or
expense incurred in connection with any legal action against the Trust or the
Trustee or any director, officer, employee or agent thereof, the performance of
any of the Trustee's duties under the Pooling and Servicing Agreement or
relating to or arising out of any Environmental Law, including, without
limitation, any judgment, award, settlement, reasonable attorneys' fees and
expenses and other costs or expenses incurred in connection with the defense of
any actual or threatened action, proceeding or claim, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties under the Pooling and Servicing
Agreement or by reason of reckless disregard of obligations and duties under the
Pooling and Servicing Agreement. Any payment hereunder made by the Servicer to
the Trustee shall be from the Servicer's own funds without any right to
reimbursement therefor. The obligations of the Servicer under this Section 8.05
shall survive the termination of the Trust and the resignation or removal of the
Trustee.
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee shall at all times be a corporation or national banking
association that is not an Affiliate of the Company or the Servicer, organized
and doing business under the laws of any state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 (or qualifying as a Qualified Bank)
and subject to supervision or examination by federal or state regulatory
authorities. If such corporation or association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
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Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07 hereof. The Servicer and the Company may maintain normal banking
relations with the Trustee if the Trustee is a depository.
SECTION 8.07. RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
created pursuant to the Pooling and Servicing Agreement by giving written notice
of such resignation to the Company, the Servicer and to all related
Certificateholders. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor Trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
Trustee. A copy of such instrument shall be delivered to the Certificateholders
and to the Servicer by the Company. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the resigning
Trustee's giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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 or equal to 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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(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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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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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
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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
(including amendment to this Standard Terms) or any agreement assigned
to the Trust;
(2) the occurrence of any Event of Default involving the Servicer
that has not been cured or waived;
(3) the resignation, termination or merger of the Company, the
Servicer or the Trustee;
(4) the purchase or repurchase or substitution of Contracts
pursuant to Section 2.06 hereof;
(5) the final payment to the Certificateholders;
(6) any change in the location of the related Certificate Account
or the Distribution Account;
(7) any event that would result in the inability of the Servicer
to make Advances regarding the related Assets;
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(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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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 (November 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
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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 (November 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
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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
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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 (November 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>
<PAGE>
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>
<PAGE>
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 (November 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>
<CAPTION>
MORTGAGE LOANS DOCUMENTS NOT RECEIVED
- -------------- --------------------------------------------------------------
ORIGINAL RECORDED
ORIGINAL RECORDED ASSIGNMENT OF
MORTGAGE MORTGAGE
OR CERTIFIED COPY OR CERTIFIED COPY
BCI LOAN NUMBER THEREOF THEREOF*
- --------------- ------- -------
<S> <C> <C>
[TRUSTEE]
as Trustee
By: ___________________________________________
Its: ___________________________________________
</TABLE>
- ----------------
* NOT REQUIRED FOR MORTGAGE LOANS FOR WHICH THE COMPANY HAS WAIVED RECORDATION
OF ASSIGNMENTS.
Exhibit 3 - Page 1
<PAGE>
<PAGE>
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 (November 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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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 (November 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>
<PAGE>
ANNEX A1 TO EXHIBIT 5
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Transferee.
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"), because (a) the Transferee owned and/or invested on
a discretionary basis at least $____ in securities [Note to reviewer - the
amount in the previous blank must be at least $100,000,000 unless the Transferee
is a dealer, in which case the amount filled in the previous blank must be at
least $10,000,000.] (except for the excluded securities referred to in paragraph
3 below) as of ______ [specify a date on or since the end of the Transferee's
most recently ended fiscal year] (such amount being calculated in accordance
with Rule 144A) and (b) the Transferee meets the criteria listed in the category
marked below.
_______ Corporation, etc. The Transferee is an organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, a corporation (other than a bank as defined in
Section 3(a)(2) of the 1933 Act or a savings and loan
association or other similar institution referenced in Section
3(a)(5)(A) of the Act), a partnership, or a Massachusetts or
similar business trust.
_______ Bank. The Transferee (a) is a national bank or banking
institution as defined in Section 3(a)(2) of the 1933 Act and
is organized under the laws of a state, territory or the
District of Columbia. The business of the Transferee is
substantially confined to banking and is supervised by the
appropriate state or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. bank, and not more than 18
months preceding the date of this certification in the case of
a foreign bank or equivalent institution, a copy of which
financial statements is attached hereto.
_______ Savings and Loan. The Transferee is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution referenced in
Section 3(a)(5)(A) of the 1933 Act. The Transferee is
supervised and examined by a state or federal authority having
supervisory authority over any such institutions or is a
foreign savings and loan association or equivalent institution
and has an audited net worth of at least $25,000,000 as
demonstrated in
Exhibit 5 - Page 3
<PAGE>
<PAGE>
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>
<PAGE>
accounting principles and if the investments of such subsidiaries are managed
under the Transferee's direction. However, such securities were not included if
the Transferee is a majority-owned, consolidated subsidiary of another
enterprise and the Transferee is not itself a reporting company under the 1934
Act.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing ______ ______
the Purchased Certificates only YES NO
for the Transferee's own account?
If the answer to the foregoing question is "NO", the Transferee agrees
that, in connection with any purchase of securities sold to the Transferee for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Transferee will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of Rule
144A. In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ___day of ___________, 19__.
________________________________________
Print Name of Transferee
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Date: _______________________________________
Exhibit 5 - Page 5
<PAGE>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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 (November 1998
Exhibit 6 - Page 1
<PAGE>
<PAGE>
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>
<PAGE>
(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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
EXHIBIT 7
BENEFIT PLAN AFFIDAVIT
Re: Bombardier Capital Mortgage Securitization
Corporation, BCMSC Trust ______________ (the "Trust")
Pass-Through Certificates, Class ______,
Class ______ and Class _____
)
) ss:
)
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete.
1. That I am a duly authorized officer of _________________________, a
______________ corporation (the "Purchaser"), whose taxpayer identification
number is _______________________, and on behalf of which I have the authority
to make this affidavit.
2. That the Purchaser is acquiring the Class Certificates ("the
Purchased Certificates"), each representing an interest in the Trust, for
certain assets of which one or more real estate mortgage investment conduit
("REMIC") elections are to be made under Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a plan ("Plan") described in or subject to the
Department of Labor regulations set forth in 29 C.F.R. 'SS' 2510.3-101
(the "Plan Asset Regulations"), a person acting on behalf of a Plan, or
a person using the assets of a Plan and (B) either (I) is not an
insurance company or (II) is an insurance company, in which case none
of the funds used by the Purchaser in connection with its purchase of
the Purchased Certificates constitute plan assets as defined in the
Plan Asset Regulations ("Plan Assets") and its purchase of the
Purchased Certificates shall not result in the certificates issued by
or the assets of the Trust being deemed to be Plan Assets;
(ii) is an insurance company and (A) the Purchaser is
acquiring the Purchased Certificates with funds held in an "insurance
company general account" (as defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), as published in 60
Fed. Reg. 35925 (July 12, 1995)), (B) there is no Plan with respect to
which the amount of such general account's reserves and liabilities for
all contracts held by or on
Exhibit 7 - Page 1
<PAGE>
<PAGE>
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 (November 1998 Edition), among the Company, Bombardier Capital Inc., and
______________________, as Trustee.
Exhibit 7 - Page 2
<PAGE>
<PAGE>
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>
<PAGE>
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, November 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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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>
<PAGE>
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 (November 1998 Edition), among the Company, Bombardier Capital Inc., and
______________________________, as Trustee.
Exhibit 8-A - Page 3
<PAGE>
<PAGE>
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>
<PAGE>
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>
<PAGE>
with a view to the transfer of direct or indirect record or beneficial ownership
to, a Disqualified Organization. For the purposes hereof, a Disqualified
Organization is any of the following: (i) the United States, any State or
political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing; (ii) any
organization (other than a farmer's cooperative as defined in Section 521 of the
Code) that is exempt from federal income taxation (including taxation under the
unrelated business taxable income provisions of the Code); (iii) any rural
telephone or electrical service cooperative described in 'SS' 1381(a)(2)(C) of
the Code; or (iv) any other entity so designated by Treasury rulings or
regulations promulgated or otherwise in effect as of the date hereof. In
addition, a corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof if all of its activities
are subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
governmental unit.
5. The Transferee agrees to consent to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Issuer (upon advice of
counsel to the Issuer) to constitute a reasonable arrangement to ensure that no
interest in a Residual Certificate will be owned directly or indirectly by a
Disqualified Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
____________, 19__, which incorporates by reference the Standard Terms thereto
(November 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>
<PAGE>
Subscribed and sworn before me this ___ day of ___________, 19__.
_________________________________________
Notary Public
My commission expires the __________ day of ___________________, 19___.
Exhibit 8-B - Page 3
<PAGE>
<PAGE>
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 (November 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>
<PAGE>
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
------------------------------------
PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
------------------------------------
JULY 1998
<PAGE>
<PAGE>
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, manufactured housing
installment sales agreements ("Contracts") secured by units of manufactured
housing ("Manufactured Homes"), Contracts secured by liens on the real estate on
which the related Manufactured Homes are located 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
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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. 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 and documents incorporated by
reference therein, 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."
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(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 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
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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 any
judgment,
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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
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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 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, 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
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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.
(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) For the purposes of Section 9-103(3)(d) of the Uniform
Commercial Code as in effect in the State of New York, Schedule I hereto
sets forth the locations of the Company's offices for the filing of any
UCC-1 financing statements, and the offices of the Company where it keeps
its records concerning the Assets are also listed in said
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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.
(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
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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
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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 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) For the purposes of Section 9-103(3)(d) of the Uniform Commercial
Code as in effect in the State of New York, Schedule I hereto sets forth
the locations of BCI's offices for the filing of any UCC-1 financing
statements, 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.
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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 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
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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
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
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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
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Contracts and 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, prior to its
first delivery of such Collateral Term Sheet to a potential investor,
delivered such Collateral Term Sheet (in hard copy) to the Company or its
counsel and received any consent required by the related Terms Agreement
and has substantially contemporaneously with its first delivery of such
Collateral Term Sheet to a potential investor, delivered such Collateral
Term Sheet (in 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, prior to its first delivery of any such Structural Term Sheet,
Series Term Sheets or Computational Materials to a potential investor,
delivered such Structural Term Sheet, Series Term Sheets or Computational
Materials (in hard copy) to the Company or its counsel and received any
consent required by the related Terms Agreement and has promptly provided
any such Structural Term Sheet, Series Term Sheets or Computational
Materials (in EDGAR format) to the Company or its counsel, which Structural
Term Sheet, 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
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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 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-
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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.
(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
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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.
(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
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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
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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.
(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
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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, 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 (x) in reliance upon and in conformity with any
Underwriters' Information or (y) in any Collateral Term Sheet, Structural
Term Sheet, Series Term Sheet or Computational Materials, except in the
case of this clause (y) to the extent that any untrue statement or alleged
untrue statement therein results (or is alleged to have resulted) from an
error or material omission in the information concerning the
characteristics of the Assets furnished by the Company to the Underwriters
for use in the preparation of any Collateral Term Sheet, Structural Term
Sheet, Series Term Sheet and/or Computational Materials (any such
information, the "Asset Pool Information"), which error was not superseded
or corrected by the delivery to the Underwriters of corrected written or
electronic information, or for which the Company provided written notice of
such error to
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the Underwriters prior to the confirmation of the sale of the applicable
Certificates (any such uncorrected Asset Pool Information an "Asset Pool
Error"); 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
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statement or omission or alleged omission was made in reliance upon and in
conformity with any Underwriters' Information; and will 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
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<PAGE>
<PAGE>
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 investigating 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.
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
-24-
<PAGE>
<PAGE>
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.
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>
<PAGE>
SCHEDULE I
Locations of Offices
--------------------
Bombardier Capital Mortgage 1600 Mountain View Drive
Securitization Corporation Colchester, Vermont 05446
12735 Gran Bay Parkway West
Suite 1000
Jacksonville, Florida 32258
Bombardier Capital Inc. 1600 Mountain View Drive
Colchester, Vermont 05446
12735 Gran Bay Parkway West
Suite 1000
Jacksonville, Florida 05446
Locations of Records
--------------------
Bombardier Capital Mortgage 12735 Gran Bay Parkway West
Securitization Corporation Suite 1000
Jacksonville, Florida 32258
Bombardier Capital Inc. 12735 Gran Bay Parkway West
Suite 1000
Jacksonville, Florida 32258
I-26
<PAGE>
<PAGE>
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
July 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 (July 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/or] installment sales agreements secured by units of manufactured
housing ("Manufactured Homes") [and] contracts secured by liens on the real
estate on which the related Manufactured Homes are located (collectively, the
"Contracts") with original terms to maturity not exceeding 30 years [and/or]
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.
A-27
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<PAGE>
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
$__________.
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
A-28
<PAGE>
<PAGE>
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 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.]
A-29
<PAGE>
<PAGE>
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:
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:
A-30
<PAGE>
<PAGE>
Name:
Title:
Accepted and Acknowledged
As of the Date First
Above Written:
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
By:
Name:
Title:
By:
Name:
Title:
BOMBARDIER CAPITAL INC.
By:
Name:
Title:
By:
Name:
Title:
A-31
<PAGE>
<PAGE>
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/or]
installment sales agreements secured by units of manufactured housing
("Manufactured Homes"), [and] contracts secured by liens on the real estate on
which the related Manufactured Homes are located (collectively, the "Contracts")
[and/or] 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 (July 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, July
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:
<PAGE>
<PAGE>
[Name of Underwriter(s)]
_______________, 19 __
Page 33
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 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'
B-33
<PAGE>
<PAGE>
[Name of Underwriter(s)]
_______________, 19 __
Page 34
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 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
Agreements to which it is a party, the performance of their respective
obligations
B-34
<PAGE>
<PAGE>
[Name of Underwriter(s)]
_______________, 19 __
Page 35
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 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)
B-35
<PAGE>
<PAGE>
[Name of Underwriter(s)]
_______________, 19 __
Page 36
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.
(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
B-36
<PAGE>
<PAGE>
[Name of Underwriter(s)]
_______________, 19 __
Page 37
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 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
B-37
<PAGE>
<PAGE>
[Name of Underwriter(s)]
_______________, 19 __
Page 38
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-38
<PAGE>
<PAGE>
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/or]
installment sales agreements secured by units of manufactured housing
("Manufactured Homes") [and] contracts secured by liens on the real estate on
which the related Manufactured Homes are located (collectively, the "Contracts")
[and/or] 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 (July 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 (July 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:
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 40
(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;
(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
B-2-40
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 41
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 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:
B-2-41
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 42
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) 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 or Instruments in the event that the Trustee
B-2-42
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 43
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 "certified
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 [and Mortgage Note] is in one
of the forms supplied by BCI in the Officers' Certificate;
(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
B-2-43
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 44
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:
(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-2-44
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 45
(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;
(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;
B-2-45
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 46
(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 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)
B-2-46
<PAGE>
<PAGE>
[Name of Underwriter(s)]
__________ ____, 19 __
Page 47
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-2-47
