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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 (Date of earliest event
Reported) September 27, 1996
CS FIRST BOSTON MORTGAGE SECURITIES CORP., (as depositor under the
Pooling and Servicing Agreement, dated as of September 1, 1996, pursuant to
which Associates Manufactured Housing Contract Pass-Through Certificates,
Series 1996-1 are issued).
CS FIRST BOSTON MORTGAGE SECURITIES CORP.
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(Exact name of registrant as specified in its charter)
Delaware 333-11263 13-3320910
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
55 East 52nd Street
New York, New York 10055
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 909-2000
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Item 5. Other Events.
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On September 27, 1996, CS First Boston Mortgage Securities Corp. (the
"Company") entered into a Pooling and Servicing Agreement dated as of
September 1, 1996 (the "Pooling and Servicing Agreement"), by and among, the
Company, as depositor, Ford Consumer Finance Company, Inc., as servicer and
seller, and The Chase Manhattan Bank, as trustee. The Pooling and Servicing
Agreement is annexed hereto as Exhibit 1.
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibit:
1. Pooling and Servicing Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CS FIRST BOSTON MORTGAGE SECURITIES CORP.
By: /s/ Joy E. Margolies
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Joy E. Margolies
Vice President
Dated: September 27, 1996
Exhibit Index
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Exhibit Page
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1. Pooling and Servicing Agreement
EXHIBIT 1
EXECUTION COPY
CS FIRST BOSTON MORTGAGE SECURITIES CORP.,
as Depositor,
FORD CONSUMER FINANCE COMPANY, INC.,
as Seller and Servicer,
and
THE CHASE MANHATTAN BANK,
as Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1996
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$920,211,764
Associates Manufactured Housing Contract
Pass-Through Certificates,
Series 1996-1
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE TWO
CONVEYANCE OF CONTRACTS; CUSTODY OF CONTRACTS
Section 2.01. Conveyance of Contracts and Other Rights. . . . . . . . . 29
Section 2.02. Filing; Name Change or Relocation . . . . . . . . . . . . 30
Section 2.03. Acceptance by Trustee . . . . . . . . . . . . . . . . . . 32
Section 2.04. Conditions to Closing . . . . . . . . . . . . . . . . . . 32
Section 2.05. REMIC Election . . . . . . . . . . . . . . . . . . . . . 32
Section 2.06. Contribution of Assets. . . . . . . . . . . . . . . . . . 32
Section 2.07. Execution and Authentication of Certificates. . . . . . . 32
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as to the Seller . . . . . 33
Section 3.02. Representations and Warranties as to Each Contract. . . . 34
Section 3.03. Representations and Warranties as to the Contracts. . . . 37
Section 3.04. Representations and Warranties as to the Contract Files . 38
Section 3.05. Repurchase of Contracts for Breach . . . . . . . . . . . 39
Section 3.06. Representation and Warranty as to the Depositor . . . . . 40
ARTICLE FOUR
THE CERTIFICATES
Section 4.01. The Certificates . . . . . . . . . . . . . . . . . . . . 41
Section 4.02. Registration of Transfer and Exchange of Certificates . . 41
Section 4.03. Book-Entry Certificates . . . . . . . . . . . . . . . . . 43
Section 4.04. Mutilated, Destroyed, Lost or Stolen Certificates . . . . 44
Section 4.05. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 44
Section 4.06. Appointment of Paying Agent . . . . . . . . . . . . . . . 45
Section 4.07. Access to List of Certificateholder Names and Addresses . 45
Section 4.08. Authenticating Agents . . . . . . . . . . . . . . . . . . 45
Section 4.09. The Class R Certificates. . . . . . . . . . . . . . . . . 46
ARTICLE FIVE
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 5.01. Responsibility for Contract Administration and Servicing. 49
Section 5.02. Standard of Care. . . . . . . . . . . . . . . . . . . . . 49
Section 5.03. Records . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.04. Inspection. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.05. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . 50
Section 5.06. Enforcement . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.07. Hazard Insurance Policies . . . . . . . . . . . . . . . . 51
Section 5.08. Reserved . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.09. Hazard Insurance Policy Collections; Consent to
Manufactured Home Transfers; Assumption Agreements. . . . 52
Section 5.10. Realization upon Defaulted Contracts. . . . . . . . . . . 52
Section 5.11. Costs and Expenses. . . . . . . . . . . . . . . . . . . . 53
Section 5.12. Trustee to Cooperate. . . . . . . . . . . . . . . . . . . 53
Section 5.13. Servicing and Other Compensation. . . . . . . . . . . . . 54
Section 5.14. Custody of Contracts. . . . . . . . . . . . . . . . . . . 54
Section 5.15. REO Disposition . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE SIX
DISTRIBUTIONS
Section 6.01. Monthly Payments. . . . . . . . . . . . . . . . . . . . . 56
Section 6.02. Withdrawals from the Certificate Account. . . . . . . . . 60
Section 6.03. Advances . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.04. Establishment of and Deposits in Certificate Account. . . 61
Section 6.05. Reserve Fund. . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.06. Reserve Accounts. . . . . . . . . . . . . . . . . . . . . 63
Section 6.07. Transfer of Certificate Account, Reserve Fund and
Reserve Accounts. . . . . . . . . . . . . . . . . . . . . 64
ARTICLE SEVEN
REPORTS
Section 7.01. Monthly Reports . . . . . . . . . . . . . . . . . . . . . 65
Section 7.02. Servicer's Certificate. . . . . . . . . . . . . . . . . . 65
Section 7.03. Other Data. . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.04. Annual Statement as to Compliance . . . . . . . . . . . . 65
Section 7.05. Annual Independent Public Accountants' Servicing Report . 65
Section 7.06. Statements to Certificateholders. . . . . . . . . . . . . 66
Section 7.07. Annual Opinion of Counsel . . . . . . . . . . . . . . . . 68
ARTICLE EIGHT
INDEMNITIES; THE DEPOSITOR AND THE SERVICER
Section 8.01. Liabilities to Obligors . . . . . . . . . . . . . . . . . 69
Section 8.02. Tax Indemnification . . . . . . . . . . . . . . . . . . . 69
Section 8.03. Servicer's Indemnities. . . . . . . . . . . . . . . . . . 69
Section 8.04. Operation of Indemnities. . . . . . . . . . . . . . . . . 69
Section 8.05. Merger or Consolidation of the Depositor, the Seller
or the Servicer . . . . . . . . . . . . . . . . . . . . . 69
Section 8.06. Limitation on Liability of the Depositor and Others . . . 70
Section 8.07. Assignment by Servicer. . . . . . . . . . . . . . . . . . 70
Section 8.08. Successor to the Servicer . . . . . . . . . . . . . . . . 71
ARTICLE NINE
DEFAULT
Section 9.01. Events of Default . . . . . . . . . . . . . . . . . . . . 73
Section 9.02. Waiver of Defaults. . . . . . . . . . . . . . . . . . . . 74
Section 9.03. Trustee to Act; Appointment of Successor. . . . . . . . . 74
Section 9.04. Notification to Certificateholders. . . . . . . . . . . . 74
Section 9.05. Effect of Transfer. . . . . . . . . . . . . . . . . . . . 74
ARTICLE TEN
THE TRUSTEE
Section 10.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . 76
Section 10.02. Certain Matters Affecting the Trustee. . . . . . . . . . 76
Section 10.03. Trustee Not Liable for Certificates or Contracts . . . . 78
Section 10.04. Trustee May Own Certificates . . . . . . . . . . . . . . 78
Section 10.05. Servicer to Pay Fees and Expenses of Trustee . . . . . . 78
Section 10.06. Eligibility Requirements for Trustee . . . . . . . . . . 79
Section 10.07. Resignation and Removal of the Trustee . . . . . . . . . 79
Section 10.08. Successor Trustee. . . . . . . . . . . . . . . . . . . . 80
Section 10.09. Merger or Consolidation of Trustee . . . . . . . . . . . 80
Section 10.10. Appointment of Co-Trustee or Separate Trustee. . . . . . 80
Section 10.11. Appointment of Office or Agency. . . . . . . . . . . . . 81
Section 10.12. REMIC Compliance . . . . . . . . . . . . . . . . . . . . 82
ARTICLE ELEVEN
TERMINATION
Section 11.01. Termination. . . . . . . . . . . . . . . . . . . . . . . 84
Section 11.02. Auction Call . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE TWELVE
MISCELLANEOUS PROVISIONS
Section 12.01. Severability of Provisions . . . . . . . . . . . . . . . 87
Section 12.02. Limitation on Rights of Certificateholders . . . . . . . 87
Section 12.03. Acts of Certificateholders . . . . . . . . . . . . . . . 88
Section 12.04. Calculations . . . . . . . . . . . . . . . . . . . . . . 88
Section 12.05. Amendment. . . . . . . . . . . . . . . . . . . . . . . . 88
Section 12.06. Recordation of Agreement . . . . . . . . . . . . . . . . 90
Section 12.07. Certificates Nonassessable and Fully Paid. . . . . . . . 90
Section 12.08. No Petition. . . . . . . . . . . . . . . . . . . . . . . 90
Section 12.09. Governing Law. . . . . . . . . . . . . . . . . . . . . . 90
Section 12.10. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 12.11. Merger and Integration of Documents. . . . . . . . . . . 90
Section 12.12. Headings . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 12.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . 91
EXHIBITS
Exhibit A - Contract Schedule . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Face of Class A Certificates. . . . . . . . . . . B-1
Exhibit C - Form of Face of Class B Certificates. . . . . . . . . . . C-1
Exhibit D - Form of Reverse of Class A and Class B Certificates . . . D-1
Exhibit E - Form of Class M Certificates. . . . . . . . . . . . . . . E-1
Exhibit F - Form of Class R Certificates. . . . . . . . . . . . . . . F-1
Exhibit G - Form of Certificate Assignment. . . . . . . . . . . . . . G-1
Exhibit H - Form of Servicer's Certificate. . . . . . . . . . . . . . H-1
Exhibit I - Form of Transfer Affidavit. . . . . . . . . . . . . . . . I-1
Exhibit J - Form of Investment Letter of Holder of Residual Interest. J-1
This Pooling and Servicing Agreement, dated as of September 1, 1996, is
among CS First Boston Mortgage Securities Corp., as depositor (the
"Depositor"), Ford Consumer Finance Company, Inc., as seller and servicer
(respectively, the "Seller" and the "Servicer"), and The Chase Manhattan
Bank, as trustee (the "Trustee").
WITNESSETH:
In consideration of the premises and the mutual agreements hereinafter
set forth, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Whenever used herein, unless the context
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otherwise requires, the following words and phrases shall have the following
meanings:
"Actuarial Advance" means, with respect to any Due Period and Actuarial
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Contract that was Outstanding as of the first day of such Due Period, the
amount, if any, of the Monthly Payment allocable to interest that was not
timely paid.
"Actuarial Contract" means any Contract with respect to which payments
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are calculated and applied pursuant to the "actuarial" method.
"Advance" means, with respect to each Distribution Date, the sum of the
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Actuarial Advance and the Simple Interest Advance.
"Advance Reimbursement Amount" means any amount received or deemed to
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be received by the Servicer pursuant to Section 6.03(c) in reimbursement of
an Advance made out of its own funds.
"AFCC" means Associates First Capital Corporation, and its successors.
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"Affiliate" means, with respect to any specified Person, any other
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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" or "controlled" have meanings correlative to the foregoing.
"Agreement" means this Pooling and Servicing Agreement and all amend
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ments hereof and supplements hereto.
"AHFSI" means Associates Housing Finance Services, Inc.
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"Annual Percentage Rate" or "APR" of a Contract means the annual
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interest rate specified in such Contract.
"Applicants" shall have the meaning specified in Section 4.07.
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"Appraised Value" means, with respect to any Manufactured Home, the
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value of such Manufactured Home as determined by a professional appraiser or
an employee of the Servicer who, as part of such employment, regularly
appraises manufactured housing units.
"Authenticating Agent" means an authenticating agent appointed pursuant
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to Section 4.08.
"Available Distribution Amount" means, with respect to any Distribution
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Date and the related Due Period, (i) the sum of (a) the amount on deposit in
the Certificate Account as of the related Deposit Date, (b) the Advance made
in respect of such Distribution Date and (c) any Reserve Fund Draw Amount
made in respect of such Distribution Date, reduced by (ii) the sum of (a)
aggregate Repossession Profits and (b) amounts permitted to be withdrawn by
the Servicer from the Certificate Account pursuant to Section 6.02(a)(i)
through (a)(vii).
"Average Sixty-Day Delinquency Ratio" means, with respect to any
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Distribution Date, the average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two immediately preceding Distribution Dates.
"Average Thirty-Day Delinquency Ratio" means, with respect to any
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Distribution Date, the average of the Thirty-Day Delinquency Ratios for such
Distribution Date and the two immediately preceding Distribution Dates.
"Benefit Plan" means an employee benefit plan subject to Section 406 of
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ERISA or Section 4975 of the Code.
"Book-Entry Certificate" means any Certificate registered in the name
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of the Depository or its nominee ownership of which is reflected on the books
of the Depository or on the books of a person maintaining an account with
such Depository (directly or as an indirect participant in accordance with
the rules of such Depository).
"Business Day" means any day other than (i) a Saturday or Sunday or (ii)
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a day on which banking institutions in the States of New York or Texas are
authorized or obligated by law or executive order to be closed.
"Certificate Account" means the custodial account or accounts created
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and maintained pursuant to Section 6.04.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
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person who is the beneficial owner of the related Certificate.
"Certificate Register" and "Certificate Registrar" mean the register
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maintained and the registrar (or any successor thereto) appointed pursuant
to Section 4.02.
"Certificateholder" or "Holder" means the Person in whose name a Certif
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icate is registered in the Certificate Register, except that, solely for the
purposes of giving any consent, notice, waiver, request or demand pursuant
to this Agreement, any Certificate registered in the name of the Depositor,
the Servicer or any Affiliate of the Servicer and any Certificate in respect
of which the Depositor, the Servicer or any Affiliate thereof is the
Certificate Owner (as shall be certified to the Trustee upon its request)
shall be deemed not to be outstanding and the Percentage Interest and
Fractional Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests or
Fractional Interests necessary to effect such consent, notice, waiver,
request or demand has been obtained, unless, in the case of (i) the Class A
Certificates, all Class A Certificates are held by such Persons, (ii) the
Class M Certificates, all Class A Certificates and Class M Certificates are
held by such Persons, (iii) the Class B-1 Certificates, all Class A
Certificates, Class M Certificates and Class B-1 Certificates or (iv) the
Class B-2 Certificates, all Certificates are held by such Persons, or, in
each case, the Certificates of the related Class or Classes have been fully
paid.
"Certificates" means the Class A Certificates, the Class B Certificates,
------------
the Class M Certificates and the Class R Certificates.
"Chase Manhattan" means The Chase Manhattan Bank, and its successors.
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"Class" means all Certificates whose form is identical except for
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variation in denomination, principal amount, owner or designation of class.
"Class A Certificates" means any one of the Class A-1, Class A-2, Class
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A-3, Class A-4 or Class A-5 Certificates.
"Class A Distribution Amount" means, with respect to any Distribution
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Date, the sum of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5
Distribution Amounts.
"Class A/M Percentage" means, with respect to any Distribution Date, the
--------------------
percentage equivalent of a fraction (not to exceed one), the numerator of
which is the sum of the Class A and Class M Principal Balances and the
denominator of which is the sum of the Class A, Class M and Class B Principal
Balances, in each case determined as of the immediately preceding
Distribution Date (or as of the Closing Date in the case of the first
Distribution Date).
"Class A Principal Balance" means, at any time, the Initial Class A
-------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class A Certificateholders pursuant to Section 6.01(a)(v), (a)(vi) and
(a)(xv).
"Class A Principal Shortfall" means, with respect to any Distribution
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Date, the excess of that portion of the amount equal to the Formula Principal
Distribution Amount due to the Class A Certificateholders over the actual
amount of principal distributed to the Class A Certificateholders on such
Distribution Date in respect of such amount for such Distribution Date.
"Class A-1 Certificate" means any one of the Certificates designated
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Class A-1, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits B, D and G.
"Class A-1 Distribution Amount" means, with respect to any Distribution
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Date, the aggregate amount distributed to Class A-1 Certificateholders on
such Distribution Date pursuant to Section 6.01(a).
"Class A-1 Interest Formula Distribution Amount" means, with respect to
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any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class A-1 Pass-Through Rate on the Class A-1 Principal Balance as of
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the period from the Closing Date through October 14, 1996
on the Initial Class A-1 Principal Balance) and (ii) any Class A-1 Unpaid
Interest Shortfall.
"Class A-1 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class A-1
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class A-1 Interest Formula
Distribution Amount".
"Class A-1 Pass-Through Rate" means 6.20% per annum.
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"Class A-1 Principal Balance" means, at any time, the Initial Class A-1
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Principal Balance minus the sum of all amounts previously distributed to the
Class A-1 Certificateholders pursuant to Section 6.01(a)(v), clause (1) of
Section 6.01(a)(vi) and Section 6.01(a)(xv).
"Class A-1 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class A-1
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to Class A-1 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
A-1 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible) at the Class A-1 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class A-1
Certificateholders on any Distribution Date, the distribution of interest to
Class A-1 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class A-1 Interest Formula Distribution Amount" and
then to any Class A-1 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class A-2 Certificate" means any one of the Certificates designated as
---------------------
Class A-2, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits B, D and G.
"Class A-2 Distribution Amount" means, with respect to any Distribution
-----------------------------
Date, the aggregate amount distributed to the Class A-2 Certificateholders
on such Distribution Date pursuant to Section 6.01(a).
"Class A-2 Interest Formula Distribution Amount" means, with respect to
----------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class A-2 Pass-Through Rate on the Class A-2 Principal Balance as of
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, for the period from the Closing Date through October 14,
1996 on the Initial Class A-2 Principal Balance) and (ii) any Class A-2
Unpaid Interest Shortfall.
"Class A-2 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class A-2
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class A-2 Interest Formula
Distribution Amount".
"Class A-2 Pass-Through Rate" means 6.70% per annum.
---------------------------
"Class A-2 Principal Balance" means, at any time, the Initial Class A-2
---------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class A-2 Certificateholders pursuant to Section 6.01(a)(v), clause (2) of
Section 6.01(a)(vi) and Section 6.01(a)(xv).
"Class A-2 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class A-2
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class A-2 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
A-2 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible) at the Class A-2 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class A-2
Certificateholders on any Distribution Date, the distribution of interest to
Class A-2 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class A-2 Interest Formula Distribution Amount" and
then to any Class A-2 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class A-3 Certificate" means any one of the Certificates designated
---------------------
Class A-3, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits B, D and G.
"Class A-3 Distribution Amount" means, with respect to any Distribution
-----------------------------
Date, the aggregate amount distributed to the Class A-3 Certificateholders
on such Distribution Date pursuant to Section 6.01(a).
"Class A-3 Interest Formula Distribution Amount" means, with respect to
----------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class A-3 Pass-Through Rate on the Class A-3 Principal Balance as of
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the period from the Closing Date through October 14, 1996
on the Initial Class A-3 Principal Balance) and (ii) any Class A-3 Unpaid
Interest Shortfall.
"Class A-3 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class A-3
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class A-3 Interest Formula
Distribution Amount".
"Class A-3 Pass-Through Rate" means 7.00% per annum.
---------------------------
"Class A-3 Principal Balance" means, at any time, the Initial Class A-3
---------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class A-3 Certificateholders pursuant to Section 6.01(a)(v), clause (3) of
Section 6.01(a)(vi) and Section 6.01(a)(xv).
"Class A-3 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class A-3
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class A-3 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
A-3 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible) at the Class A-3 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class A-3
Certificateholders on any Distribution Date, the distribution of interest to
Class A-3 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class A-3 Interest Formula Distribution Amount" and
then to any Class A-3 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class A-4 Certificate" means any one of the Certificates designated
---------------------
Class A-4, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits B, D and G.
"Class A-4 Distribution Amount" means, with respect to any Distribution
-----------------------------
Date, the aggregate amount distributed to the Class A-4 Certificateholders
on such Distribution Date pursuant to Section 6.01(a).
"Class A-4 Interest Formula Distribution Amount" means, with respect to
----------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class A-4 Pass-Through Rate on the Class A-4 Principal Balance as of
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, for the period from the Closing Date through October 14,
1996 on the Initial Class A-4 Principal Balance) and (ii) any Class A-4
Unpaid Interest Shortfall.
"Class A-4 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class A-4
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class A-4 Interest Formula
Distribution Amount".
"Class A-4 Pass-Through Rate" means 7.30% per annum.
---------------------------
"Class A-4 Principal Balance" means, at any time, the Initial Class A-4
---------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class A-4 Certificateholders pursuant to Section 6.01(a)(v), clause (4) of
Section 6.01(a)(vi) and Section 6.01(a)(xv).
"Class A-4 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class A-4
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class A-4 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
A-4 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible) at the Class A-4 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class A-4
Certificateholders on any Distribution Date, the distribution of interest to
Class A-4 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class A-4 Interest Formula Distribution Amount" and
then to any Class A-4 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class A-5 Certificate" means any one of the Certificates designated
---------------------
Class A-5, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits B, D and G.
"Class A-5 Distribution Amount" means, with respect to any Distribution
-----------------------------
Date, the aggregate amount distributed to the Class A-5 Certificateholders
on such Distribution Date pursuant to Section 6.01(a).
"Class A-5 Interest Formula Distribution Amount" means, with respect to
----------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class A-5 Pass-Through Rate on the Class A-5 Principal Balance as of
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, for the period from the Closing Date through October 14,
1996 on the Initial Class A-5 Principal Balance) and (ii) any Class A-5
Unpaid Interest Shortfall.
"Class A-5 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class A-5
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class A-5 Interest Formula
Distribution Amount".
"Class A-5 Pass-Through Rate" means 7.60% per annum.
---------------------------
"Class A-5 Principal Balance" means, at any time, the Initial Class A-5
---------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class A-5 Certificateholders pursuant to Section 6.01(a)(v), clause (5) of
Section 6.01(a)(vi) and Section 6.01(a)(xv).
"Class A-5 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class A-5
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class A-5 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
A-5 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible) at the Class A-5 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class A-5
Certificateholders on any Distribution Date, the distribution of interest to
Class A-5 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class A-5 Interest Formula Distribution Amount" and
then to any Class A-5 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class B Certificate" means any one of the Class B-1 or Class B-2
-------------------
Certificates.
"Class B Cross-over Date" means the later to occur of (i) the March 2001
-----------------------
Distribution Date and (ii) the first Distribution Date as of which the
percentage of the Pool Balance represented by the Class B Principal Balance
equals or exceeds 1.75 times the Class B Percentage as of the Closing Date.
"Class B Distribution Amount" means, with respect to any Distribution
---------------------------
Date, the aggregate amount distributed to Class B Certificateholders on such
Distribution Date pursuant to Section 6.01(a).
"Class B Percentage" means, with respect to any Distribution Date, 100%
------------------
minus the Class A/M Percentage.
"Class B Principal Balance" means, at any time, the sum of the Class B-1
-------------------------
Principal Balance and the Class B-2 Principal Balance.
"Class B Principal Distribution Tests" will be satisfied with respect
------------------------------------
to any Distribution Date, if (i) the Average Sixty-Day Delinquency Ratio is
less than or equal to 3.50%, (ii) the Average Thirty-Day Delinquency Ratio
is less than or equal to 5.50%, (iii) the Cumulative Realized Loss Test is
satisfied and (iv) the Current Realized Loss Test does not exceed 2.50%.
"Class B-1 Adjusted Principal Balance" means, with respect to any
------------------------------------
Distribution Date, the Class B-1 Principal Balance as of such Distribution
Date minus the Class B-1 Liquidation Loss Amount, if any.
"Class B-1 Certificate" means any one of the Certificates designated
---------------------
Class B-1, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits C, D and G.
"Class B-1 Interest Formula Distribution Amount" means, with respect to
----------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class B-1 Pass-Through Rate on the Adjusted Class B-1 Principal
Balance as of the immediately preceding Distribution Date (or, in the case
of the first Distribution Date, for the period from the Closing Date through
October 14, 1996 on the Initial Class B-1 Principal Balance) and (ii) any
Class B-1 Unpaid Interest Shortfall.
"Class B-1 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class B-1
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class B-1 Interest Formula
Distribution Amount".
"Class B-1 Liquidation Loss Amount" means, with respect to any
---------------------------------
Distribution Date, the lesser of (i) the amount, if any, by which the sum of
the Class A, Class M and Class B-1 Principal Balances exceeds the Pool
Balance and (ii) the Class B-1 Principal Balance, in each case after giving
effect to all distributions of principal made on such Distribution Date.
"Class B-1 Liquidation Loss Interest Amount" means, with respect to any
------------------------------------------
Distribution Date, an amount equal to one month's interest at the Class B-1
Pass-Through Rate on the Class B-1 Liquidation Loss Amount, if any, for the
immediately preceding Distribution Date.
"Class B-1 Pass-Through Rate" means, with respect to any Distribution
---------------------------
Date, the lesser of (i) 8.00% per annum and (ii) the Weighted Average Net
Contract Rate.
"Class B-1 Principal Balance" means, at any time, the Initial Class B-1
---------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class B-1 Certificateholders pursuant to Section 6.01(a)(x), (a)(xi) and
(a)(xv).
"Class B-1 Principal Shortfall" means, with respect to any Distribution
-----------------------------
Date, the excess, if any, of that portion of the amount equal to the Formula
Principal Distribution Amount due to the Class B-1 Certificateholders on such
Distribution Date over the actual amount of principal distributed to the
Class B Certificateholders on such Distribution Date in respect of such
amount for such Distribution Date.
"Class B-1 Reserve Account" means the account entitled "Class B-1
-------------------------
Reserve Account" created and maintained pursuant to Section 6.06.
"Class B-1 Reserve Account Draw Amount" means, with respect to any
-------------------------------------
Distribution Date, the lesser of (i) the amount on deposit in the Class B-1
Reserve Account or (ii) the aggregate amount of any Class B-1 Interest
Formula Distribution Amounts, Class B-1 Liquidation Loss Interest Amounts and
Class B-1 Unpaid Liquidation Loss Interest Shortfalls that will not be
distributed out of the Available Distribution Amount on such Distribution
Date.
"Class B-1 Reserve Account Requirement" means, with respect to any
-------------------------------------
Distribution Date, three months of interest at the initial Class B-1 Pass-
Through Rate on the Class B-1 Principal Balance as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
the Initial Class B-1 Principal Balance).
"Class B-1 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class B-1
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class B-1 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
B-1 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible) at the Class B-1 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class B-1
Certificateholders on any Distribution Date, the distribution of interest to
Class B-1 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class B-1 Interest Formula Distribution Amount" and
then to any Class B-1 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class B-1 Unpaid Liquidation Loss Interest Shortfall" means, with
----------------------------------------------------
respect to any Distribution Date, the amount, if any, by which the aggregate
unreimbursed Class B-1 Liquidation Loss Interest Amounts for one or more
prior Distributions Dates exceeds the amount previously distributed to the
Class B-1 Certificates in respect of Liquidation Loss Interest Amounts on one
or more prior Distribution Dates.
"Class B-2 Adjusted Principal Balance" means, as of any Distribution
------------------------------------
Date, the Class B-2 Principal Balance as of such Distribution Date minus the
Class B-2 Liquidation Loss Amount, if any.
"Class B-2 Certificate" means any one of the Certificates designated
---------------------
Class B-2, executed and authenticated as provided herein, substantially in
the form set forth in Exhibits C, D and G.
"Class B-2 Floor Amount" means (a) if the Class M Principal Balance has
----------------------
not been reduced to zero after the distribution in Section 6.01(a)(ix), 2.00%
of the Cut-off Date Pool Balance and (b) if the Class M Principal Balance has
been reduced to zero after the distribution in Section 6.01(a)(ix), zero.
"Class B-2 Interest Formula Distribution Amount" means, with respect to
----------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class B-2 Pass-Through Rate on the Adjusted Class B-2 Principal
Balance as of the immediately preceding Distribution Date (or, in the case
of the first Distribution Date, for the period from the Closing Date through
October 14, 1996 on the Initial Class B-2 Principal Balance) and (ii) any
Class B-2 Unpaid Interest Shortfall.
"Class B-2 Interest Shortfall" means, with respect to any Distribution
----------------------------
Date, any amount by which the amount of interest distributed to Class B-2
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class B-2 Interest Formula
Distribution Amount".
"Class B-2 Liquidation Loss Amount" means, with respect to any
---------------------------------
Distribution Date, the lesser of (i) the amount, if any, by which the sum of
the Class A, Class M, Class B-1 and Class B-2 Principal Balances exceeds the
Pool Balance and (ii) the Class B-2 Principal Balance, in each case after
giving effect to all distributions of principal made on such Distribution
Date.
"Class B-2 Liquidation Loss Interest Amount" means, with respect to any
------------------------------------------
Distribution Date, an amount equal to one month's interest at the Class B-2
Pass-Through Rate on the Class B-2 Liquidation Loss Amount, if any, for the
immediately preceding Distribution Date.
"Class B-2 Pass-Through Rate" means, with respect to any Distribution
---------------------------
Date, the lesser of (i) 9.00 % per annum and (ii) the Weighted Average Net
Contract Rate.
"Class B-2 Principal Balance" means, at any time, the Initial Class B-2
---------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class B-2 Certificateholders pursuant to Section 6.01(a)(xiii), (a)(xiv) and
(a)(xv).
"Class B-2 Principal Shortfall" means, with respect to any Distribution
-----------------------------
Date, the excess, if any, of that portion of the amount equal to the Formula
Principal Distribution Amount due to the Class B-2 Certificateholders on such
Distribution Date over the actual amount of principal distributed to the
Class B-2 Certificateholders on such Distribution Date in respect of such
amount for such Distribution Date.
"Class B-2 Reserve Account" means the account entitled "Class B-2
-------------------------
Reserve Account" created and maintained pursuant to Section 6.06.
"Class B-2 Reserve Account Draw Amount" means, with respect to any
-------------------------------------
Distribution Date, the lesser of (i) the amount on deposit in the Class B-2
Reserve Account or (ii) aggregate amount of any Class B-2 Interest Formula
Distribution Amounts, Class B-2 Liquidation Loss Interest Amounts and Class
B-2 Unpaid Liquidation Loss Interest Shortfalls that will not be distributed
out of the Available Distribution Amount on such Distribution Date.
"Class B-2 Reserve Account Requirement" means, with respect to any
-------------------------------------
Distribution Date, three months of interest at the initial Class B-2 Pass-
Through Rate on the Class B-2 Principal Balance as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
the Initial Class B-2 Principal Balance).
"Class B-2 Unpaid Interest Shortfall" means, with respect to any
-----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class B-2
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class B-2 Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
B-2 Interest Formula Distribution Amount", plus accrued interest (to the
extent payment thereof is legally permissible at the Class B-2 Pass-Through
Rate on the amount thereof from such prior Distribution Dates to the current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class B-2
Certificateholders on any Distribution Date, the distribution of interest to
Class B-2 Certificateholders on such Distribution Date shall be allocated
first to the monthly interest requirement calculated pursuant to clause (i)
of the definition of "Class B-2 Interest Formula Distribution Amount" and
then to any Class B-2 Unpaid Interest Shortfall pursuant to such clause (ii).
"Class B-2 Unpaid Liquidation Loss Interest Shortfall" means, with
----------------------------------------------------
respect to any Distribution Date, the amount, if any, by which the aggregate
unreimbursed Class B-2 Liquidation Loss Interest Amounts for one or more
prior Distributions Dates exceeds the amount previously distributed to the
Class B-2 Certificateholders in respect of Liquidation Loss Interest Amounts
on one or more prior Distribution Dates.
"Class M Adjusted Principal Balance" means, with respect to any
----------------------------------
Distribution Date, the Class M Principal Balance as of such Distribution Date
minus the Class M Liquidation Loss Amount, if any.
"Class M Certificate" means any one of the Certificates designated Class
-------------------
M, executed and authenticated as provided herein, substantially in the form
set forth in Exhibits E and G.
"Class M Distribution Amount" means, with respect to any Distribution
---------------------------
Date, the aggregate amount distributed to the Class M Certificateholders on
such Distribution Date pursuant to Section 6.01(a).
"Class M Interest Formula Distribution Amount" means, with respect to
--------------------------------------------
any Distribution Date, an amount equal to the sum of (i) one month's interest
at the Class M Pass-Through Rate on the Adjusted Class M Principal Balance
as of the immediately preceding Distribution Date (or, in the case of the
first Distribution Date, the period from the Closing Date through October 14,
1996 on the Initial Class M Principal Balance) and (ii) any Class M Unpaid
Interest Shortfall.
"Class M Interest Shortfall" means, with respect to any Distribution
--------------------------
Date, any amount by which the amount of interest distributed to Class M
Certificateholders on such Distribution Date is less than the amount computed
pursuant to clause (i) of the definition of "Class M Interest Formula
Distribution Amount".
"Class M Liquidation Loss Amount" means, with respect to any
-------------------------------
Distribution Date, the lesser of (i) the amount, if any, by which the sum of
the Class A and Class M Principal Balances exceeds the Pool Balance and (ii)
the Class M Principal Balance, in each case after giving effect to all
distributions of principal made on such Distribution Date.
"Class M Liquidation Loss Interest Amount" means, with respect to any
----------------------------------------
Distribution Date, an amount equal to one month's interest at the Class M
Pass-Through Rate on the Class M Liquidation Loss Amount, if any, for the
immediately preceding Distribution Date.
"Class M Pass-Through Rate" means, with respect to any Distribution
-------------------------
Date, the lesser of (i) 7.90% per annum and (ii) the Weighted Average Net
Contract Rate.
"Class M Principal Balance" means, at any time, the Initial Class M
-------------------------
Principal Balance minus the sum of all amounts previously distributed to the
Class M Certificateholders since the Closing Date pursuant to Section
6.01(a)(vii), (a)(viii) and (a)(xv).
"Class M Principal Shortfall" means, with respect to any Distribution
---------------------------
Date, the excess, if any, of that portion of the amount equal to the Formula
Principal Distribution Amount due to the Class M Certificateholders on such
Distribution Date over the actual amount of principal distributed to the
Class M Certificateholders on such Distribution Date in respect of such
amount for such Distribution Date.
"Class M Reserve Account" means the account entitled "Class M Reserve
-----------------------
Account" created and maintained pursuant to Section 6.06.
"Class M Reserve Account Draw Amount" means, with respect to any
-----------------------------------
Distribution Date, the lesser of (i) the amount on deposit in the Class M
Reserve Account or (ii) aggregate amount of any Class M Interest Formula
Distribution Amounts, Class M Liquidation Loss Interest Amounts and Class M
Unpaid Liquidation Loss Interest Shortfalls that will not be distributed out
of the Available Distribution Amount on such Distribution Date.
"Class M Reserve Account Requirement" means, with respect to any
-----------------------------------
Distribution Date, three months of interest at the initial Class M Pass-
Through Rate on the Class M Principal Balance as of the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the
Initial Class M Principal Balance).
"Class M Unpaid Interest Shortfall" means, with respect to any
---------------------------------
Distribution Date, the amount, if any, by which the aggregate Class M
Interest Shortfalls for prior Distribution Dates exceeds the aggregate of the
amounts distributed to the Class M Certificateholders on prior Distribution
Dates in respect of amounts due under clause (ii) of the definition of "Class
M Interest Formula Distribution Amount", plus accrued interest (to the extent
payment thereof is legally permissible) at the Class M Pass-Through Rate on
the amount thereof from such prior Distribution Dates to such current
Distribution Date. For purposes of determining whether amounts distributable
pursuant to such clause (ii) were actually distributed to Class M
Certificateholders on any Distribution Date, the distribution of interest to
Class M Certificateholders on such Distribution Date shall be allocated first
to the monthly interest requirement calculated pursuant to clause (i) of the
definition of "Class M Interest Formula Distribution Amount" and then to any
Class M Unpaid Interest Shortfall pursuant to such clause (ii).
"Class M Unpaid Liquidation Loss Interest Shortfall" means, with respect
--------------------------------------------------
to any Distribution Date, the amount, if any, by which the aggregate
unreimbursed Class M Liquidation Loss Interest Amounts for one or more prior
Distributions Dates exceeds the amount previously distributed to the Class
M Certificateholders in respect of Liquidation Loss Interest Amounts on one
or more prior Distribution Dates.
"Class R Certificates" means any one of the Certificates designated
--------------------
Class R, executed and authenticated as provided herein, substantially in the
form set forth in Exhibits F and G.
"Class R Distribution Amount" means, with respect to any Distribution
---------------------------
Date, the aggregate amount distributed to the Class R Certificateholder
pursuant to Section 6.01(a)(xxi).
"Closing Date" means September 27, 1996.
------------
"Code" means The Internal Revenue Code of 1986, as amended.
----
"Computer Tape" means the computer tape generated by the Seller which
-------------
provides information relating to the Contracts, and includes the master file
and the history file.
"Contract File" means, with respect to each (1) Contract that is not a
-------------
Land Home Contract, (i) the original copy of the Contract; (ii) the original
title document, or application for title, for the related Manufactured Home
of the type issued to lienholders, unless the laws of the jurisdiction in
which the related Manufactured Home is located do not provide for the
issuance of such title documents for manufactured housing; (iii) evidence of
one or more of the following types of perfection of the security interest in
the related Manufactured Home granted by such Contract, as appropriate, (a)
notation of such security interest on the title document, (b) a financing
statement meeting the requirements of the UCC, with evidence of recording in
the appropriate offices indicated thereon, or (c) such other evidence of
perfection of a security interest in a manufactured housing unit as is
customary in such jurisdiction; (iv) the assignment of the Contract from the
originator to FCFC; and (v) any extension, modification or waiver
agreement(s), and (2) each Land Home Contract, (i) the original copy of the
Contract; (ii) the related Mortgage with evidence of recording thereon and
any title document for the related Manufactured Home; (iii) an assignment of
the Mortgage that is in blank (which may be a blanket assignment if permitted
in the applicable jurisdiction); (iv) if applicable, the assignment of the
Contract from the originator to FCFC; and (v) any extension, modification or
waiver agreement(s).
"Contract Pool" means the pool of Contracts held in the Trust Fund.
-------------
"Contract Principal Balance" means, with respect to any Contract and any
--------------------------
date of determination, the unpaid principal balance of such Contract as of
such date of determination, computed on the basis of the simple interest
method or the actuarial method, as the case may be.
"Contract Schedule" means the list identifying each Contract
-----------------
constituting part of the corpus of the Trust Fund, which list is attached
hereto as Exhibit A, and which identifies each Contract by contract number
and name of the Obligor and sets forth the unpaid principal balance of each
Contract as of the Cut-off Date.
"Contracts" means the manufactured housing installment sales contracts
---------
and installment loan agreements described in the Contract Schedule and
constituting part of the Trust Fund, which Contracts are to be sold and
assigned by the Depositor to the Trustee and which are the subject of this
Agreement.
"Corporate Trust Office" means the principal office of the Trustee at
----------------------
which at any particular time its corporate business shall be administered,
which office at the date of execution of this Agreement is located at 450
West 33rd Street, New York, New York 10001.
"Cumulative Realized Loss Test" means, with respect to any Distribution
-----------------------------
Date, the following:
(i) if such Distribution Date occurs between March 1, 2001 and
August 31, 2002, the Cumulative Realized Loss Test will be satisfied if
Cumulative Realized Losses as of such Distribution Date are less than or
equal to 5.0% of the Cut-off Date Pool Balance;
(ii) if such Distribution Date occurs between September 1, 2002
and August 31, 2003, the Cumulative Realized Loss Test will be satisfied if
Cumulative Realized Losses as of such Distribution Date are less than or
equal to 6.0% of the Cut-off Date Pool Balance; and
(iii) if such Distribution Date occurs after September 1, 2003,
the Cumulative Realized Loss Test will be satisfied if Cumulative Realized
Losses as of such Distribution Date are less than or equal to 8.0% of the
Cut-off Date Pool Balance;
"Cumulative Realized Losses" means, with respect to any Distribution
--------------------------
Date, the sum of Realized Losses with respect to such Distribution Date and
each preceding Distribution Date.
"Current Realized Loss Ratio" means, with respect to any Distribution
---------------------------
Date, a fraction, expressed as a percentage, the numerator of which is the
aggregate Realized Losses as of such Distribution Date and each of the two
immediately preceding Distribution Dates, multiplied by four, and the
denominator of which is the arithmetic average of the Pool Balance as of the
third preceding Distribution Date and the Pool Balance as of such
Distribution Date.
"Cut-off Date" means September 1, 1996.
------------
"Cut-off Date Pool Balance" means the Pool Balance as of the Cut-off
-------------------------
Date.
"Deficiency Event" means the Distribution Date, if any, on which the
----------------
Pool Balance becomes equal to or less than the Class A Principal Balance.
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
4.03(b).
"Deposit Date" means, with respect to any Distribution Date, the
------------
Business Day immediately preceding such Distribution Date.
"Depositor" means CS First Boston Mortgage Securities Corp., or its
---------
successor in interest or any successor under this Agreement appointed as
herein provided.
"Depository" means DTC, the nominee of which is CEDE & CO., as the
----------
registered Holder of the Book-Entry Certificates, and its successors. The
Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Participant" means a broker, dealer, bank or other financial
----------------------
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the second Business Day preceding each
------------------
Distribution Date.
"Distribution Date" means the fifteenth day of any month, or if such day
-----------------
is not a Business Day, the first Business Day immediately succeeding such
day, commencing October 15, 1996.
"DTC" means The Depository Trust Company, and its successors.
---
"Due Date" means, with respect to any Contract, the day of the month
--------
specified in such Contract on which each Monthly Payment is due, exclusive
of any grace period.
"Due Period" means, with respect to any Distribution Date, the month
----------
immediately preceding the month in which such Distribution Date occurs.
"Electronic Ledger" means the electronic master record of the Seller's
-----------------
manufactured housing installment sales contracts and installment loan
agreements clearly identifying each Contract that is part of the Trust Fund.
"Eligible Account" means an account that is either (i) maintained with
----------------
a depository institution organized under the laws of the United States or any
state, the deposits of which are insured by the Federal Deposit Insurance
Corporation to the fullest extent permitted by law, (a) the long-term deposit
rating or the long-term unsecured debt obligations of which (or in the case
of the principal bank in a bank holding company system, the long-term
unsecured debt obligations of such bank holding company) have been rated by
each Rating Agency in one of its two highest rating categories, or (b) the
commercial paper of which (or, in the case of a principal bank in a bank
holding company system, of such bank holding company) is rated A-1+ by
Standard & Poor's, P-1 by Moody's and F-1 if rated by Fitch, (ii) a trust
account maintained with the Trustee in its corporate trust department in
which the funds are either uninvested or invested solely in Eligible
Investments or (iii) otherwise acceptable to each Rating Agency, as evidenced
by a letter from such Rating Agency, without a reduction or withdrawal of the
rating of any Rated Certificates.
"Eligible Investments" means one or more of the following:
--------------------
(i) obligations of, or guaranteed as to principal and
interest by, the United States or any agency or instrumentality thereof,
which obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition thereof,
provided that the long-term unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by each Rating Agency in
one of its two highest rating categories; and provided further that the
short-term debt obligations of such party shall be rated A-1+ by Standard &
Poor's and P-1 by Moody's;
(iii) federal funds, certificates of deposit, time deposits and
bankers' acceptances, each of which shall not have an original maturity of
more than 90 days, of any depository institution or trust company
incorporated under the laws of the United States or any State (including
those of the Trustee or its affiliates); provided that the short-term
obligations of such depository institution or trust company shall be rated
in the highest rating category by the Rating Agencies;
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the United
States or any State; provided that such commercial paper shall be rated A-1+
by Standard & Poor's and P-1 by Moody's;
(v) any money market fund rated AAm or AAm-G or higher by
Standard & Poor's and acceptable to Moody's and Fitch (including funds as to
which the Trustee may act as sponsor, manager, advisor or depository); and
(vi) other obligations or securities that are acceptable as
an Eligible Investment to each Rating Agency, as evidenced by a letter from
such Rating Agency, and will not result in a reduction in or withdrawal of
the rating of any Rated Certificates;
provided, however, that no instrument shall be an Eligible Investment if such
instrument evidences a right to receive only interest payments with respect
to the obligations underlying such instrument; provided further, that no
instrument shall be an Eligible Investment unless such instrument matures on
the Deposit Date next succeeding the date of investment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Default" means any one of the events described in Section
----------------
9.01.
"Extension Fee" means any extension fee paid by the Obligor on a
-------------
Contract.
"FCFC" means Ford Consumer Finance Company, Inc., a New York
----
corporation, or its successors in interest or assigns permitted under this
Agreement.
"Fitch" means Fitch Investor Service, L.P., and its successors.
-----
"Formula Principal Distribution Amount" means, with respect to any
-------------------------------------
Distribution Date and the related Due Period, an amount, computed, with
respect to Actuarial Contracts, in accordance with the actuarial method and
with respect to Simple Interest Contracts, in accordance with the simple
interest method, equal to the sum of (i) the principal portion of all Monthly
Payments on Contracts that were Outstanding at the beginning of such Due
Period, to the extent not duplicative with amounts described in clauses
(ii) through (v); (ii) all Partial Prepayments applied during such Due
Period; (iii) the Contract Principal Balance of each Contract for which a
Principal Prepayment in Full was received during such Due Period; (iv) the
Contract Principal Balance of each Contract that became a Liquidated Contract
during such Due Period; and (v) the Contract Principal Balance of each
Contract that was purchased during such Due Period pursuant to Section 3.05.
"Fractional Interest" means, with respect to any Certificate of any
-------------------
Class, the product of (i) the Percentage Interest evidenced by such Certif-
icate multiplied by (ii) the amount derived from dividing the Principal
Balance of such Class by the sum of the Principal Balances of Certificates
of all Classes. For purposes of the foregoing, the Class R Certificates will
have a Principal Balance of zero.
"Hazard Insurance Policy" means, with respect to each Contract, the
-----------------------
policy of fire and extended coverage insurance required to be maintained for
the related Manufactured Home, pursuant to Section 5.07 which may be a
blanket insurance policy maintained by the Servicer.
"Initial Class A Principal Balance" means $754,573,000.
---------------------------------
"Initial Class A-1 Principal Balance" means $215,000,000.
-----------------------------------
"Initial Class A-2 Principal Balance" means $147,000,000.
-----------------------------------
"Initial Class A-3 Principal Balance" means $137,000,000.
-----------------------------------
"Initial Class A-4 Principal Balance" means $72,000,000.
-----------------------------------
"Initial Class A-5 Principal Balance" means $183,573,000.
-----------------------------------
"Initial Class B Principal Balance" means $101,224,764.
---------------------------------
"Initial Class B-1 Principal Balance" means $69,015,000.
-----------------------------------
"Initial Class B-2 Principal Balance" means $32,209,764.
-----------------------------------
"Initial Class M Principal Balance" means $64,414,000.
---------------------------------
"Initial Reserve Fund Deposit Amount" means $4,601,058.83.
-----------------------------------
"Land Home Contract" means a Contract that is secured, or intended to
------------------
be secured, in part, by the lien of a Mortgage.
"Late Payment Fees" means any late payment fees paid by Obligors on
-----------------
Contracts, determined in accordance with the terms thereof.
"Lien" means any lien, claim, charge, security interest or other
----
encumbrance.
"Liquidated Contract" means any defaulted Contract as to which the
-------------------
Servicer has determined that all amounts which it expects to recover from or
on account of such Contract have been recovered; provided that any defaulted
Contract in respect of which the related Manufactured Home and, in the case
of Land Home Contracts, Mortgaged Property have been realized upon and
disposed of and the proceeds of such disposition have been received shall be
deemed to be a Liquidated Contract.
"Liquidation Expenses" means all reasonable out-of-pocket expenses
--------------------
(exclusive of overhead expenses) which are incurred by the Servicer in
connection with the liquidation of any defaulted Contract, on or prior to the
date on which the related Manufactured Home and, in the case of Land Home
Contracts, Mortgaged Property are disposed of, including, without limitation,
reasonable legal fees and expenses, any unreimbursed amount expended by the
Servicer pursuant to Section 5.05 or 5.11 (to the extent such amount is
reimbursable pursuant to Section 5.05 or 5.07, as the case may be) respecting
such Contract and any unreimbursed expenditures for property taxes or for
property restoration or preservation that are related to such liquidation.
"Liquidation Proceeds" means cash (including insurance proceeds other
--------------------
than those applied to the restoration of the related Manufactured Home or
released to the related Obligor in accordance with the normal servicing
procedures of the Servicer) received in connection with the liquidation of
defaulted Contracts, whether through repossession or otherwise.
"Loan-to-Value Ratio" means the fraction, expressed as a percentage, the
-------------------
numerator of which is the original principal balance of the related Contract
and the denominator of which is the sum of the down payment (which includes
the value of any trade-in unit), the original amount financed on the related
Contract, which may include sales and other taxes, and, in the case of a Land
Home Contract, the value of the land securing the Contract as appraised by
an independent appraiser.
"Manufactured Home" means a unit of manufactured housing which either
-----------------
(a) meets the requirements of Section 25(e)(10) of the Code, including all
accessions thereto, securing the indebtedness of the Obligor under a Contract
or (b) meets the requirements set forth in the Private Letter Ruling.
"Monthly Payment" means, with respect to any Contract, the amount of
---------------
each fixed monthly payment payable by the related Obligor in accordance with
the terms thereof.
"Monthly Report" means the monthly report described in Section 7.01.
--------------
"Monthly Servicing Fee" means, as of any Distribution Date, an amount
---------------------
equal to one-twelfth of 1.00% (or, in the case of a successor Servicer
engaged at any time after FCFC is no longer the Servicer, the percentage
agreed upon pursuant to Section 8.08) of the Pool Balance for the immediately
preceding Distribution Date.
"Moody's" means Moody's Investors Service, Inc., and its successors.
-------
"Mortgage" means the mortgage creating a first lien on an estate in fee
--------
simple interest in the real property securing a Contract.
"Mortgaged Property" means the property subject to a Mortgage.
------------------
"Net Liquidation Loss" means, with respect to a Liquidated Contract, the
--------------------
amount, if any, by which (i) the unpaid principal balance of such Liquidated
Contract plus accrued and unpaid interest thereon at the related APR to the
date on which such Contract became a Liquidated Contract exceeds (ii) the
related Net Liquidation Proceeds.
"Net Liquidation Proceeds" means, with respect to any Liquidated
------------------------
Contract, Liquidation Proceeds net of the sum of (i) Liquidation Expenses and
(ii) any amount required to be paid to the Obligor or any other party with
an interest in the Manufactured Home or any related Mortgaged Property that
is senior to the interest of the Trust Fund.
"Nonrecoverable Advance" means any advance made or proposed to be made
----------------------
pursuant to Section 6.03, which the Servicer believes, in its good faith
judgment, is not, or if made would not be, ultimately recoverable from
Liquidation Proceeds or otherwise from the related Contract. In determining
whether an Advance is or will be nonrecoverable, the Servicer need not take
into account that it might receive any amounts in a deficiency judgment. The
determination by the Servicer that any Advance is, or if made would
constitute, a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Servicer delivered to the Trustee and stating the reasons
for such determination.
"Obligor" means each person who is indebted under a Contract or who has
-------
acquired a Manufactured Home subject to a Contract.
"Officer's Certificate" means a certificate signed by the President, a
---------------------
Vice President, the Treasurer, an Assistant Treasurer, the Secretary, an
Assistant Secretary or any other duly authorized officer of the Depositor or
the Servicer, as the case may be, and delivered to the Trustee as required
by this Agreement.
"Opinion of Counsel" means a written opinion of counsel, who may be the
------------------
counsel for the Depositor or the Servicer, addressed and delivered to the
Trustee and any other entity or entities specified herein who shall be
reasonably acceptable to the Trustee.
"Original Value" means, with respect to any Manufactured Home that was
--------------
new at the time the related Contract was originated, the purchase price of
such Manufactured Home (including, for this purpose, any Mortgaged Property
not constituting a part of the Manufactured Home), plus taxes and, to the
extent financed under such Contract, fees, insurance and prepaid finance
charges. With respect to any Manufactured Home that was used at the time the
related Contract was originated, the total delivered sales price of such
Manufactured Home (including, for this purpose, any Mortgaged Property not
constituting a part of the Manufactured Home), plus taxes and, to the extent
financed under such Contract, fees, insurance and prepaid finance charges.
"Outstanding" means, with respect to any Contract as to the time of
-----------
reference thereto, a Contract that has not been fully prepaid and has not
become either a Liquidated Contract or a Repurchased Contract prior to such
time of reference.
"Outstanding Amount Advanced" means, with respect to any Distribution
---------------------------
Date, the aggregate of all Advances remitted by the Servicer pursuant to
Section 6.03 less the aggregate of all Advance Reimbursement Amounts actually
received prior to such Distribution Date.
"Ownership Interest" means any legal or beneficial, direct or indirect,
------------------
ownership or other interest.
"Partial Prepayment" means (i) any Principal Prepayment other than a
------------------
Principal Prepayment in Full and (ii) any cash deposited in the Certificate
Account pursuant to Section 6.04(b)(iii) to the extent that such deposit
represents monies in respect of clause (i) of the second sentence of Section
3.05(a).
"Pass-Through Rate" means, as to any Class of Certificates, the Class
-----------------
A-1 Pass-Through Rate, the Class A-2 Pass-Through Rate, the Class A-3 Pass-
Through Rate, the Class A-4 Pass-Through Rate, the Class A-5 Pass-Through
Rate, the Class M Pass-Through Rate or the Class B-1 Pass-Through Rate or the
Class B-2 Pass-Through Rate, as the case may be.
"Paying Agent" means any paying agent appointed pursuant to Section
------------
4.06.
"Percentage Interest" means, with respect to a Certificate of any Class,
-------------------
the percentage interest evidenced thereby in distributions required to be
made on the Certificates of such Class, such percentage interest being equal
to the percentage obtained by dividing the denomination of such Certificate
by the aggregate of the denominations of all of the outstanding Certificates
of such Class (or, in the case of the Class R Certificate, being equal to the
percentage specified on the face of such Class R Certificate).
"Permitted Transferee" means any Person other than (i) the United
--------------------
States, a State or any political subdivision thereof, any possession of the
United States or any agency or instrumentality of any of the foregoing (other
than an instrumentality that is a corporation if all of its activities are
subject to tax and, except for the Federal Home Loan Mortgage Corporation,
a majority of its board of directors is not selected by any such governmental
unit); (ii) a foreign government, international organization or agency or
instrumentality of either of the foregoing (other than an instrumentality
that is a corporation if all of its activities are subject to tax and a
majority of its board of directors is not selected by any such governmental
unit); (iii) an organization which is exempt from tax imposed by Chapter 1
of the Code (including the tax imposed by Code Section 511 on unrelated
business taxable income) on any excess inclusions (as defined in Code Section
860E(c)(1)) with respect to a Class R Certificate (except certain farmers'
cooperatives described in Code Section 521); (iv) rural electric and
telephone cooperatives described in Code Section 1381(a)(2); (v) a Non-U.S.
Person; and (vi) any other Person so designated by the Servicer based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Class
R Certificate to such Person may cause the Trust Fund to fail to qualify as
a REMIC at any time that any Certificates are outstanding. For purposes of
the foregoing, the terms "United States," "State" and "International
Organization" shall have the meanings set forth in Code Section 7701 or
successor provisions. A "Non-U.S. Person" means an individual, corporation,
partnership or other person other than a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in
or under the laws of the United States or any political subdivision thereof,
or an estate or trust that is subject to U.S. federal income tax regardless
of the source of its income.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or any agency or political subdivision
thereof.
"Pool Factor" means, with respect to any Distribution Date and as to any
-----------
Class of Certificates, the percentage, carried out to seven decimal places,
obtained by dividing the Principal Balance of such Class of Certificates,
after giving effect to all distributions made on such Distribution Date, by
the Original Principal Balance of such Class of Certificates.
"Pool Balance" means, with respect to any Distribution Date, the aggre
------------
gate of the Contract Principal Balances of each Outstanding Contract as of
the last day of the related Due Period.
"Principal Balance" means, with respect to (i) any Class of
-----------------
Certificates, the Principal Balance of such Class of Certificates and (ii)
all Classes of Certificates, the Principal Balances of all Certificates.
"Principal Prepayment" means, with respect to any Contract, a payment
--------------------
or other recovery of principal made on or in respect thereof (exclusive of
Liquidation Proceeds) which is received in advance of the related Due Date
and applied upon receipt (or, in some instances with respect to a Partial
Prepayment made on an Actuarial Contract, upon one or more future Due Dates)
to reduce the unpaid principal balance of such Contract prior to the Due Date
or Due Dates on which such principal amounts are due.
"Principal Prepayment In Full" means any Principal Prepayment of the
----------------------------
unpaid principal balance of a Contract.
"Private Letter Ruling" means the private letter ruling granted by the
---------------------
Internal Revenue Service to FCFC on April 15, 1996 which requires that the
related Manufactured Home: (i) be between 375 and 399 square feet, without
taking into account any sunrooms, raised screened porches, carports, decks,
skirting, patios and awnings (collectively, "Additions"), with the minimum
width in excess of 102 inches prior to being sited, (ii) has its wheels and
axles removed once it is sited, (iii) is anchored to the ground by metal
straps and rods set into the ground designed to permanently affix it to the
ground and (iv) have one or more attached Additions.
"PTCE 95-60" means Prohibited Transaction Class Exemption 95-60.
----------
"Qualified Bidders" means firms and institutions that are engaged in the
-----------------
business of buying and selling manufactured housing installment sales and
installment loan contracts.
"Rated Certificates" means each Class of Certificates that has been
------------------
rated by a Rating Agency.
"Rating Agencies" means Standard & Poor's, Fitch and Moody's.
---------------
"Realized Losses" means, with respect to any Distribution Date, the
---------------
aggregate Net Liquidation Losses of all Contracts that became Liquidated
Contracts during the related Due Period.
"Record Date" means (a) with respect to any Distribution Date and the
-----------
Book-Entry Certificates, the close of business on the day immediately
preceding such Distribution Date, and (b) with respect to any Distribution
Date and the Definitive Certificates (including the Class B-2 Certificates),
the close of business on the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.
"Remainder Certificate" shall have the meaning specified in Section
---------------------
4.01.
"REMIC" means a real estate mortgage investment conduit within the
-----
meaning of Section 860D(a) of the Code.
"REMIC Provisions" means provisions of the federal income tax law
----------------
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be
in effect from time to time.
"REO Property" means any Manufactured Home or Mortgaged Property
------------
acquired by the Servicer in a repossession or foreclosure.
"Repossession Profits" means, with respect to any Distribution Date, the
--------------------
excess, if any, of Net Liquidation Proceeds in respect of each Contract that
became a Liquidated Contract during the related Due Period over the sum of
the unpaid principal balance of such Contract plus accrued and unpaid
interest thereon at the related APR from the Due Date to which interest was
last paid by the Obligor to the Due Date in the Due Period in which such
Contract became a Liquidated Contract.
"Repurchase Price" means, with respect to any Repurchased Contract, an
----------------
amount equal to the unpaid principal balance of such Contract as of the
beginning of the month of repurchase plus accrued interest from the Due Date
with respect to which the Obligor last made a payment to the Due Date in the
Due Period in which such Contract is repurchased.
"Repurchased Contract" means a Contract repurchased or required to be
--------------------
repurchased by the Seller pursuant to Section 3.05(a).
"Reserve Account" means any of the Class M Reserve Account, the Class
---------------
B-1 Reserve Account or the Class B-2 Reserve Account.
"Reserve Account Requirement" means, with respect to the Class M
---------------------------
Certificates, the Class B-1 Certificates or the Class B-2 Certificates, the
Class M Reserve Account Requirement, the Class B-1 Reserve Account
Requirement or the Class B-2 Reserve Account Requirement, respectively.
"Reserve Fund" means the account or accounts created and maintained
------------
pursuant to Section 6.05.
"Reserve Fund Draw Amount" means, with respect to any Distribution Date,
------------------------
the lesser of (i) the amount on deposit in the Reserve Fund or (ii) the
amount by which the aggregate of amounts due to Certificateholders pursuant
to Section 6.01(a)(i) through (xvi) exceeds the Available Distribution Amount
for such Distribution Date.
"Reserve Fund Requirement" means $9,202,117.65.
------------------------
"Responsible Officer" means, when used with respect to the Trustee, the
-------------------
chairman or vice chairman of the board of directors, the chairman or vice
chairman of any executive committee of the board of directors, the president,
any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the
controller, any assistant controller 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 of and familiarity with the particular subject.
"Sale and Purchase Agreement" means that certain sale and purchase
---------------------------
agreement, dated as of the date hereof, between the Seller and the Depositor,
regarding the sale by the Seller and purchase by the Depositor of the
Contracts.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller" means FCFC, in its capacity as Seller under the Sale and
------
Purchase Agreement and this Agreement, and its successors.
"Servicer" means FCFC or AHFSI, upon the transfer contemplated by
--------
Section 8.07, or their successor in interest or any successor under this
Agreement as provided by Section 8.08.
"Servicer's Certificate" means an Officer's Certificate of the Servicer
----------------------
completed, executed and delivered pursuant to Section 7.02, substantially in
the form of Exhibit H.
"Servicing File" means all documents, records, and other items main
--------------
tained by the Servicer with respect to a Contract and not included in the
corresponding Contract File, including the credit application, credit reports
and verifications, appraisals, tax and insurance records, payment records,
insurance claim records, correspondence and the Computer Tape.
"Servicing Officer" means any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Contracts whose name
appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Simple Interest Advance" means, with respect to any Due Period and any
-----------------------
Simple Interest Contract that was Outstanding as of the first day of such Due
Period which had a Monthly Payment which was not timely made, an amount equal
to (i) the product of (a) the Contract Principal Balance of such Contract on
the first day of such Due Period and (b) one-twelfth of its APR, minus (ii)
the amount of interest actually received on such Simple Interest Contract
during such Due Period.
"Simple Interest Contract" means any Contract with respect to which
------------------------
payments of principal are calculated and applied on the simple interest
method.
"Sixty-Day Delinquency Ratio" means, with respect to any Distribution
---------------------------
Date, a fraction, expressed as a percentage, the numerator of which is the
aggregate unpaid principal balance of all Contracts that were delinquent 60
or more days as of the end of the related Due Period (including Contracts in
respect of which the related Manufactured Homes have been repossessed but are
still in inventory), and the denominator of which is the Pool Balance as of
the end of such Due Period.
"Standard & Poor's" means Standard & Poor's, a division of The McGraw
-----------------
Hill Companies, and its successors.
"State" means any state of the United States or the District of
-----
Columbia.
"Subordinate Certificates" means the Class M and Class B Certificates.
------------------------
"Tax" means any tax, including interest, penalties, additional amounts
---
or additions to tax.
"Termination Price" means the sum of (i) any Liquidation Expenses
-----------------
incurred by the Servicer in respect of any Contract that has not yet been
liquidated, (ii) all amounts required to be reimbursed or paid to the
Servicer in respect of previously unreimbursed Advances and (iii) the greater
of (a) the sum of (1) the aggregate unpaid principal balances of all
Contracts, plus accrued and unpaid interest at the related APRs through the
end of the Due Period immediately preceding the Due Period in which the
termination purchase will occur, plus (2) the lesser of (A) the aggregate
unpaid principal balance of each Contract that had been secured by any REO
Property remaining in the Trust Fund, plus accrued interest thereon at the
related APRs through the end of the Due Period immediately preceding the Due
Period in which the termination purchase will occur, and (B) the current
appraised value of any such REO Property (net of Liquidation Expenses to be
incurred in connection with the disposition of such REO 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
unreimbursed Advances made with respect of the Contract relating to each such
REO Property and (b) the aggregate fair market value of the assets comprising
the Trust Estate (as determined by the Servicer) plus all unreimbursed
Advances. For purposes of the foregoing, the fair market value of the assets
comprising the Trust Estate shall be deemed to include accrued interest at
the related APR on the unpaid principal balance of each Contract (including
each Contract relating to any REO Property, which REO Property has not yet
been disposed of by the Servicer) through the end of the Due Period
immediately preceding the Due Period in which the termination purchase will
occur.
"Thirty-Day Delinquency Ratio" means, with respect to any Distribution
----------------------------
Date, a fraction, expressed as a percentage, the numerator of which is the
aggregate unpaid principal balance of all Contracts that were delinquent 30
or more days as of the end of the related Due Period (including Contracts in
respect of which the related Manufactured Homes have been repossessed but are
still in inventory), and the denominator of which is the Pool Balance as of
the end of such Due Period.
"Transfer" means any direct or indirect transfer or sale of any
--------
Ownership Interest in a Class R Certificate.
"Transfer Affidavit" means an affidavit of the Transferee of a Class R
------------------
Certificate, substantially in the form of Exhibit I.
"Transferee" means any Person who is acquiring by Transfer any Ownership
----------
Interest in a Class R Certificate.
"Trust Fund" means the corpus of the trust created by this Agreement,
----------
to the extent described herein, consisting of the Contracts (including,
without limitation, the security interest created thereby), including all
rights to receive payments on the Contracts due on and after the Cut-off
Date, such assets as shall from time to time be identified as deposited in
the Certificate Account, a Manufactured Home and any related Mortgaged
Property which secured a Contract (other than a Repurchased Contract) and
which have been acquired in realizing upon such Contract, the Mortgages, the
obligation of the Seller to repurchase Repurchased Contracts pursuant to
Section 3.05, the proceeds of the Hazard Insurance Policies, the Reserve
Fund, the Class M Reserve Account, the Class B-1 Reserve Account, the Class
B-2 Reserve Account and all rights of the Depositor under the Sale and
Purchase Agreement.
"Trustee" means The Chase Manhattan Bank, or its successors or assigns
-------
under this Agreement.
"Trustee's Fees" means the fees, expenses and disbursements of the
--------------
Trustee set forth in Section 10.05.
"UCC" means the Uniform Commercial Code as in effect in the relevant
---
jurisdiction or, in the case of Louisiana, the comparable provisions of
Louisiana law.
"Underwriter" means each of CS First Boston Corporation, Goldman, Sachs
-----------
& Co. and Morgan Stanley & Co. Incorporated.
"United States" means the United States of America.
-------------
"Unpaid Class A Principal Shortfall" means, with respect to any
----------------------------------
Distribution Date, the amount, if any, by which the aggregate unreimbursed
Class A Principal Shortfalls for one or more prior Distribution Dates exceeds
the amount previously distributed to the Class A Certificateholders in
respect of Class A Principal Shortfalls on one or more prior Distribution
Dates.
"Unpaid Class B-1 Principal Shortfall" means, with respect to any
------------------------------------
Distribution Date, the amount, if any, by which the aggregate Class B-1
Principal Shortfalls for one or more prior Distribution Dates exceeds the
amount previously distributed to the Class B-1 Certificateholders in respect
of Class B-1 Principal Shortfalls on one or more prior Distribution Dates.
"Unpaid Class B-2 Principal Shortfall" means, with respect to any
------------------------------------
Distribution Date, the amount, if any, by which the aggregate Class B-2
Principal Shortfalls for one or more prior Distribution Dates exceeds the
amount previously distributed to the Class B-2 Certificateholders in respect
of Class B-2 Principal Shortfalls on one or more prior Distribution Dates.
"Unpaid Class M Principal Shortfall" means, with respect to any
----------------------------------
Distribution Date, the amount, if any, by which the aggregate Class M
Principal Shortfalls for one or more prior Distribution Dates exceeds the
amount previously distributed to the Class M Certificateholders in respect
of Class M Principal Shortfalls on one or more prior Distribution Dates.
"Vice President" of any Person means any vice president of such Person,
--------------
whether or not designated by a number or words before or after the title
"Vice President", who is a duly elected officer of such Person.
"Weighted Average Net Contract Rate" means, with respect to any
----------------------------------
Distribution Date, the per annum rate equal to (i) the weighted average of
the APRs borne by the Contracts and applicable to Monthly Payments due in the
related Due Period less (ii) the Monthly Servicing Fee.
ARTICLE TWO
CONVEYANCE OF CONTRACTS; CUSTODY OF CONTRACTS
Section 2.01. Conveyance of Contracts and Other Rights.
----------------------------------------
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, sell, assign, set over and otherwise convey to the Trustee
without recourse (i) all of its right, title and interest in, to and under
the Contracts (including, without limitation, the security interests created
thereby) and any related Mortgages, including all interest and principal
received with respect to the Contracts on and after the Cut-off Date, (ii)
all of the rights under any Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the creditor of such
Contract, (iii) all documents contained in the Contract Files, (iv) all other
of its rights relating to and payments made with respect to other assets
comprising the Trust Fund, the Reserve Fund, the Class M Reserve Account, the
Class B-1 Reserve Account and the Class B-2 Reserve Account, and (v) all
proceeds of the foregoing.
The ownership of each Contract and the contents of the related Contract
File and Servicing File are vested in the Trustee. The contents of each
Contract File and Servicing File are and shall be held in trust by the
Servicer for the benefit of the Trustee as the owner thereof and the
Servicer's possession of the contents of each Servicing File so retained is
for the sole purpose of servicing the related Contract, and such retention
and possession by the Servicer is in a custodial capacity only. Neither the
Depositor nor the Servicer claim any ownership interest in the Contracts;
provided, however, that the Servicer shall retain the customer list and have
the right to solicit obligors for products it customarily makes available to
obligors in general.
It is the intention of the parties hereto that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to
this Agreement shall constitute a purchase and sale and not a loan. If the
conveyance of the Contracts from the Seller to the Depositor to the Trustee
is characterized as a pledge and not a sale, then the Depositor shall be
deemed to have transferred to the Trustee, in addition to the Trust Fund, all
of the Depositor's right, title and interest in, to and under the obligation
deemed to be secured by said pledge; and it is the intention of this
Agreement that the Seller and the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Seller's and the Depositor's right, title and interest in, to and under the
obligation deemed to be secured by said pledge and that the Trustee shall be
deemed to be an independent custodian for purposes of perfection of such
security interest.
If the conveyance of the Contracts from the Depositor to the Trustee is
characterized as a pledge, it is the intention of the parties hereto that
this Agreement shall constitute a security agreement under applicable law,
and that each of the Seller and the Depositor shall be deemed to have granted
to the Trustee a first priority security interest in all of its right, title
and interest in, to and under the Contracts, all payments of interest and
principal due on or in respect of the Contracts on and after the Cut-off
Date, all other rights relating to and payments made in respect of the Trust
Fund, and all proceeds thereof. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person as a Holder
or Certificate Owner of any Certificates, the security interest created
hereby shall continue in full force and effect and the Trustee shall be
deemed to be the collateral agent for the benefit of such Person.
Section 2.02. Filing; Name Change or Relocation.
---------------------------------
(a)(i) On or prior to the Closing Date, the Servicer shall cause to
be filed, in the office of the Secretary of State of each of the States of
Florida, Georgia, Ohio, Oregon and Texas, UCC-1 financing statements
describing the Contracts and other items of the Trust Estate as collateral
and naming the Seller as debtor and the Depositor as secured party. On or
prior to the Closing Date, the Servicer shall cause to be filed, in the
office of the Secretary of State of the State of New York and each of the
States of Florida, Georgia, Ohio, Oregon and Texas, a UCC-1 financing
statement describing the Contracts and other items of the Trust Estate as
collateral and naming the Depositor as debtor and the Trustee as secured
party. The Servicer shall also cause to be filed all necessary continuation
statements for each of the foregoing UCC-1 financing statements.
(ii) Subject to the following sentence, from time to time the Servicer
shall take and cause to be taken such actions and execute such documents as
are necessary to perfect and protect the Certificateholders' interests in the
Contracts and other items of the Trust Estate and their proceeds and the
Manufactured Homes and any related Mortgaged Property against all other
Persons, including, without limitation, the filing of financing statements
and continuation statements, the execution of transfer instruments and the
making of notations on or taking possession of all records or documents of
title. FCFC, so long as it is the Servicer, shall not be required to cause
notations to be made on any document of title relating to any Manufactured
Home or to execute any transfer instrument (including, without limitation,
any UCC-3 assignments) relating to any Manufactured Home (other than a
notation or a transfer instrument necessary to show the Seller as the
lienholder or legal title holder) or to file documents in real property
records with respect to a Manufactured Home or related Contract or any
related Mortgaged Property, absent notice from the Trustee or the Depositor
or actual knowledge that such Manufactured Home (other than a Manufactured
Home securing a Land Home Contract) has become real property under applicable
state law; provided this sentence shall not have any effect on the
representation and warranty in Section 3.02(j) and the Seller's obligations
in respect thereof in Section 3.05; provided, further, that the Servicer
shall not be required to protect the Trustee from any Liens on the Contracts,
their proceeds or the Manufactured Homes created by the Depositor or
conveyances of the Contracts or their proceeds by the Depositor. Nothing in
the preceding sentence shall be construed to limit the indemnification
obligations of the Servicer set forth in Section 10.05. The Seller and the
Depositor agree to take whatever action is necessary to enable the Servicer
to file financing statements and continuation statements and otherwise act
to perfect and protect the Certificateholders' interests in the Contracts,
the Manufactured Homes and any related Mortgaged Property as set forth in
this Agreement. Assuming that the Depositor and the Trustee perform such
actions as are required at the direction of the Servicer, the Servicer will
maintain a first priority security interest in each Manufactured Home and any
related Mortgaged Property so long as the related Contract is the property
of the Trust; provided, however, that the Seller, so long as it is the
Servicer, shall not be required to cause notations to be made on any document
of title relating to any Manufactured Home, to execute any transfer instru-
ment (including, without limitation, any UCC-3 assignments) relating to any
Manufactured Home (other than a notation or a transfer instrument necessary
to show the Seller as lienholder or legal title holder) or to file documents
in real property records with respect to a Manufactured Home or related
Contract or any related Mortgaged Property, absent notice from the Trustee,
or the Depositor or actual knowledge that such Manufactured Home (other than
a Manufactured Home securing a Land Home Contract) has become real property
under applicable state law or to protect the Trustee from any Liens created
by the Depositor on any Manufactured Home.
Notwithstanding anything in the preceding paragraph to the contrary,
with respect to each Land Home Contract if (i) the credit rating of the
long-term unsecured senior debt of AFCC, the indirect parent of FCFC, is
reduced below A- from Standard & Poor's or below Baa3 from Moody's or (ii)
AFCC does not own, directly or indirectly, a majority of the common stock of
FCFC, then the Servicer shall, within 45 days after such reduction or the
failure to maintain ownership, either (a) record an assignment of mortgage
for each Land Home Contract or (b) prepare and deliver to the Trustee an
assignment of the related Mortgage to the Trustee in recordable form (which
may be a blanket assignment to the extent permitted in the applicable juris-
diction) together with an Opinion of Counsel to the effect that recording is
not required to protect the Trustee's right, title and interest in, to and
under the related Land Home Contract.
(b) During the term of this Agreement, neither the Seller nor the
Depositor shall change its name, identity or structure or relocate its chief
executive office without first giving notice to the Trustee. If any change
in the Seller's or the Depositor's name, identity or structure or the
relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any
title statute, the Seller or the Depositor, as the case may be, no later than
five days after the effective date of such change, shall file such amendments
as may be required to preserve and protect the Certificateholders' interests
in the Contracts and proceeds thereof and in the Manufactured Homes.
(c) The Seller hereby represents and warrants that its current chief
executive offices are located in the State of Texas. The Depositor hereby
represents and warrants that its chief executive offices are in the State of
New York. During the term of this Agreement, the Seller and the Depositor
will each maintain its respective chief executive office in one of the States
of the United States, except Louisiana and Tennessee.
(d) The Servicer agrees to pay all reasonable costs and disbursements
in connection with the perfection and the maintenance of perfection, as
against all third parties, of the Certificateholders' right, title and
interest in, to and under the Contracts (including, without limitation, the
security interest in the Manufactured Homes granted thereby) and any related
Mortgages.
Section 2.03. Acceptance by Trustee. The Trustee hereby acknowledges
---------------------
conveyance of the Contracts and any related Mortgages to the Trustee and
declares that the Trustee, directly or through a custodian (which shall be
the Servicer pursuant to Section 5.14), holds and will hold such Contract
Files in trust for the use and benefit of all present and future
Certificateholders. The Trustee hereby certifies that it has no notice or
knowledge of (i) any adverse Lien with respect to any Contract, (ii) any
Contract being overdue or dishonored, (iii) any evidence on the face of any
Contract of any security interest therein adverse to the Trustee's interest
or (iv) any defense against or claim against any Contract by the Obligor or
by any other party.
Section 2.04. Conditions to Closing. On the Closing Date, the Trustee
---------------------
shall authenticate and deliver the Certificates only upon receipt of letters
from Standard & Poor's, Fitch and Moody's confirming that (i) the Class A
Certificates have been rated AAA, AAA and Aaa, respectively, (ii) the Class
M Certificates have been rated at least AA, AA and Aa3, respectively, and
(iii) the Class B-1 Certificates have been rated at least BBB, BBB and Baa2,
respectively.
Section 2.05. REMIC Election. The Trustee will cause the Trust Fund
--------------
to be treated as a REMIC. The Class A Certificates, the Class B Certificates
and the Class M Certificates will constitute "regular interests" in the
REMIC. The Class R Certificates will constitute the sole class of "residual
interests" in the REMIC. The holders of the Class R Certificates hereby
agree to pay any taxes assessed against it as holder of the "residual
interest" in the REMIC. The tax year of the Trust Fund shall be the calendar
year and the Trust Fund shall use the accrual method of accounting. The
Closing Date is hereby designated as the "startup day" of the REMIC within
the meaning of Section 860G(a)(9) of the Code. The name of the REMIC shall
be "CS First Boston Mortgage Securities Corp., Associates Manufactured
Housing Contract Pass-Through Certificates, Series 1996-1 REMIC."
Section 2.06. Contribution of Assets. Except as provided in Section
----------------------
3.05(a) as relates to a deposit in lieu of repurchase of a Contract the
principal balance of which is incorrectly set forth on the Contract Schedule,
following the Closing Date, the Trustee shall not accept any contribution of
additional assets to the Trust Fund unless the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that (i) the contribution of such
assets into the Trust Fund will not cause the Trust Fund to fail to qualify
as a REMIC so long as any Certificate is outstanding and (ii) such
contribution will not cause the imposition of Tax on contributions to the
Trust Fund after the "start-up day" (as defined in Section 860G(a)(9) of the
Code) with respect thereto.
Section 2.07. Execution and Authentication of Certificates. The
--------------------------------------------
Trustee, on behalf of the Trust Fund, has caused to be executed,
authenticated and delivered to or upon the order of the Depositor, in
exchange for the Trust Fund, concurrently with the transfer, sale,
assignment, setting over and conveyance to the Trustee of the Trust Fund,
Certificates in authorized denominations evidencing the ownership of the
entire Trust Fund.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as to the Seller. The
-----------------------------------------------
Seller makes the following representations and warranties to the other
parties hereto and the Certificateholders. Such representations and
warranties shall speak as of the execution and delivery of this Agreement,
but shall survive the sale, transfer and assignment of the Contracts to the
Trustee.
(a) Organization and Good Standing; Licensing. The Seller is a
-----------------------------------------
corporation duly organized, validly existing and in good standing under the
laws of the State of its incorporation and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Seller is duly qualified to do business as a foreign corporation and 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 condition, financial or other, or the earnings,
business affairs or business prospects of the Seller. The Seller was
properly licensed in each jurisdiction at the time of its purchase of each
Contract in such jurisdiction to the extent required by the laws of such
jurisdiction as applied to the purchase of such Contract and the failure to
be so licensed would have a material adverse effect on the enforceability of
the related Contracts.
(b) Authorization; Binding Obligations. The Seller has the power
----------------------------------
and authority to make, execute and deliver this Agreement and perform all of
the transactions contemplated to be performed by it under this Agreement, and
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of the
Seller enforceable in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies.
(c) No Consent Required. The Seller is not required to obtain the
-------------------
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau
or agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement, except such as have been obtained.
(d) No Violations. The execution, delivery and performance of
-------------
this Agreement by the Seller will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to the
Seller or the charter or bylaws of the Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the
Seller is a party or by which the Seller may be bound.
(e) Litigation. No litigation or administrative proceeding of or
----------
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Seller have a material
adverse effect on the transactions contemplated by this Agreement.
Section 3.02. Representations and Warranties as to Each Contract. The
--------------------------------------------------
Contracts have been sold by the Seller to the Depositor pursuant to the Sale
and Purchase Agreement. In connection with such sale, the Seller made the
representations and warranties contained in Sections 3.02 and 3.03 to the
Depositor. As a condition of the purchase by the Depositor, the Depositor
has required that the Seller make such representations and warranties
directly to the Trustee and the Certificateholders so that the Trustee may
recover directly against the Seller on such representations and warranties
rather than indirectly through claims by the Depositor against the Seller.
Consequently, the Seller represents and warrants to the other parties hereto
and the Certificateholders as to each Contract as of the Cut-off Date or the
Closing Date, as the case may be. Such representations and warranties shall
speak as of the execution and delivery of this Agreement (and as to the best
knowledge as of such date), but shall survive the sale, transfer and
assignment of the Contracts to the Trustee.
(a) Contract Schedule. The information set forth in the Contract
-----------------
Schedule is true and correct in all material respects with respect to each
Contract.
(b) Payments. As of the Cut-off Date, no Monthly Payment is more
--------
than 59 days past due, and no portion of the Monthly Payment due in the
second month next preceding the month in which the Cut-off Date occurs was
made directly or indirectly by the Seller on behalf of the Obligor.
(c) No Waivers. The terms of the Contract and any related
----------
Mortgage have not been waived, altered or modified in any respect, except by
instruments or documents identified in the Contract File.
(d) Binding Obligation. The Contract and any related Mortgage is
------------------
the legal, valid and binding obligation of the Obligor thereunder and is
enforceable in accordance with its terms, except as such enforceability may
be limited by laws affecting the enforcement of creditors' rights generally
and by general principles of equity.
(e) Insurance. The Manufactured Home securing the Contract is
---------
covered by a Hazard Insurance Policy in the amount required by Section 5.07,
except to the extent that such an insurance policy has been cancelled and the
Seller has not yet received notification thereof. All premiums due as of the
Closing Date on such insurance have been paid in full or, with respect to
insurance placed by the Servicer, will have been paid in full within 90 days
after the Closing Date.
(f) Origination. The Contract was either (i) originated by a
-----------
manufactured housing dealer acting, to the best of the Seller's knowledge,
in the regular course of its business and was purchased by the Seller in the
regular course of its business, (ii) originated by the Seller in the regular
course of its business or (iii) originated by a third-party originator and
purchased in bulk by the Seller.
(g) Lawful Assignment. The Contract and any related Mortgage was
-----------------
not originated in and is not subject to the laws of any jurisdiction whose
laws would make the transfer of the Contract from the Seller to the Depositor
or the transfer or ownership of the Contract under this Agreement or pursuant
to transfers of Certificates unlawful, void or voidable or affect the
enforceability of the Contract.
(h) Compliance with Law. All requirements of any federal, state
-------------------
or local law, including, without limitation, usury, truth-in-lending and
equal credit opportunity laws and lender licensing laws, applicable to the
Contract and any related Mortgage or the servicing of any Contract have been
complied with to the extent any of the foregoing would have a material
adverse effect on the enforceability of the related Contract.
(i) Contract in Force. The Contract and any related Mortgage has
-----------------
not been satisfied or subordinated in whole or in part or rescinded, and the
Manufactured Home securing the Contract has not been released from the lien
of the Contract and any related Mortgage in whole or in part.
(j) Valid Security Interest. The Contract, together with any
-----------------------
related Mortgage, creates a valid, subsisting and enforceable first priority
security interest in favor of the Seller in the Manufactured Home covered
thereby and, in the case of a Land Home Contract, a first mortgage lien on
the related Mortgaged Property; such security interest or Mortgage has been
assigned by the Seller to the Depositor and, assuming the due authorization,
execution and delivery by the Depositor of this Agreement, the Sale and
Purchase Agreement and such other instruments relating to the transfer of the
Contract to the Trustee as the Seller has presented to the Depositor for
execution and delivery, by the Depositor to the Trustee, and, assuming the
Depositor has neither conveyed an interest in the Contract or related
Mortgaged Property except pursuant to this Agreement nor created any Lien on
the Contract, their proceeds or any Manufactured Home or related Mortgaged
Property except as contemplated by this Agreement, the Trustee has a valid
and perfected first priority security interest in such Manufactured Home and,
in the case of a Land Home Contract, a first mortgage lien on the related
Mortgaged Property.
(k) Capacity of Parties. The obligor on the Contract and any
-------------------
related Mortgage had capacity to execute the Contract.
(l) Good Title. The Seller purchased the Contract and any related
----------
Mortgage for value and took possession thereof in the ordinary course of its
business, without knowledge that the Contract was subject to any security
interest. To the best of the Seller's knowledge, immediately prior to the
transfer of the Contract and any related Mortgage by the Seller to the
Depositor, the Seller had good and marketable title thereto free and clear
of any Lien and was the sole owner thereof with full right to transfer the
Contract and any related Mortgage to the Depositor. The Seller has not sold,
assigned or pledged the Contract or any related Mortgage to any Person other
than the Depositor and prior to the transfer of the Contract and any related
Mortgage by the Seller to the Depositor and by the Depositor to the Trust,
the Seller had good and marketable title thereto free and clear of any Lien,
was the sole owner thereof with full right to transfer the Contact to the
Depositor and has transferred all right, title and interest in, to and under
the Contract to the Depositor, free and clear of any Lien.
(m) No Defaults. To the best of the Seller's knowledge, as of the
-----------
Cut-off Date there was no default, breach, violation or event permitting
acceleration existing under the Contract and any related Mortgage and no
event which, with notice and the expiration of any grace or cure period,
would constitute such a default, breach, violation or event permitting
acceleration under such Contract (except payment delinquencies permitted by
clause (b) above). The Seller has not waived any such default, breach,
violation or event permitting acceleration, except by instruments or
documents included in the Contract File.
(n) No Liens. As of the Closing Date, there are, to the best of
--------
the Seller's knowledge, no Liens which have been filed for work, labor or
materials affecting the Manufactured Home securing the Contract which are or
may be liens prior to, or equal or coordinate with, the lien of the Contract.
(o) Equal Installments. Each Contract has a fixed APR and
------------------
provides for level monthly payments of principal and interest (except that
the payment at maturity may be slightly larger) which fully amortize the loan
over its term. Each Contract other than a Land Home Contract is either a
Simple Interest Contract or an Actuarial Contract. Each Land Home Contract
is an Actuarial Contract.
(p) Enforceability. The Contract and any related Mortgage
--------------
contains customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for the realization against the
collateral of the benefits of the security.
(q) One Original. There is only one original executed Contract,
------------
which is in the custody of the Seller or otherwise held on behalf of the
Trustee on the Closing Date.
(r) Loan-to-Value Ratio. At the time of its origination, the
-------------------
Contract had a Loan-to-Value Ratio (rounded to the nearest 1%) not greater
than 100%.
(s) Not Real Estate. The related Manufactured Home (other than
---------------
a Manufactured Home that secures a Land Home Contract) is personal property,
was personal property at the time of the execution and delivery of the
related Contract by the parties thereto, and is not and was not, at such
time, considered or classified as part of the real estate on which it is
located under the laws of the jurisdiction in which it is located. The
related Manufactured Home is, to the best of the Seller's knowledge, free of
damage and in good repair.
(t) Notation of Security Interest. If the related Manufactured
-----------------------------
Home is located in a state in which notation of a security interest on the
title document is required or permitted to perfect such security interest,
the title document shows, or if a new or replacement title document with
respect to such Manufactured Home is being applied for such title document
will show, the Seller as the holder of a first priority security interest in
such Manufactured Home. If the related Manufactured Home is located in a
state in which the filing of a financing statement or the making of a fixture
filing under the UCC is required to perfect a security interest in
manufactured housing, such filings or recordings have been duly made and show
the Seller as secured party. If the related Manufactured Home secures a Land
Home Contract and is located in a state that does not permit separate
evidence of Liens on the Manufactured Home and the property on which it is
located, such Manufactured Home and, in the case of all Land Home Contracts
and any Contracts on Mortgaged Property located in New Hampshire, the related
land securing such Land Home Contract or the Manufactured Home, as the case
may be, are subject to a Mortgage properly filed in the appropriate public
recording office and naming FCFC as mortgagee. In either case, assuming the
due authorization, execution and delivery by the Depositor of this Agreement,
the Sale and Purchase Agreement and such other instruments relating to the
transfer of the Contracts to the Trustee as the Seller has presented to the
Depositor for execution and delivery, the Trustee has the same rights as the
secured party of record would have (if such secured party were still the
owner of the Contract) against all Persons claiming an interest in such
Manufactured Home.
(u) Secondary Mortgage Market Enhancement Act. The related
-----------------------------------------
Manufactured Home is a "manufactured home" within the meaning of 42 United
States Code, Section 5402(6), and at the origination of each Contract, the
Seller was approved for insurance by the Secretary of Housing and Urban
Development pursuant to Section 2 of the National Housing Act.
(v) Qualified Mortgage for REMIC. Each Contract is either (a)
----------------------------
secured by a "single family residence" within the meaning of Section
25(e)(10) of the Code or (b) meets the requirements of the Private Letter
Ruling.
Section 3.03. Representations and Warranties as to the Contracts. The
--------------------------------------------------
Seller represents and warrants to the other parties hereto and the
Certificateholders as follows. Such representations and warranties shall
speak as of the execution and delivery of this Agreement, but shall survive
the sale, transfer and assignment of the Contracts to the Trustee.
(a) Amounts. The aggregate principal amounts payable by Obligors
-------
under the Contracts as of the Cut-off Date (including Monthly Payments due
on or after the Cut-off Date but paid prior to the Cut-off Date) equals or
exceeds the Cut-off Date Pool Balance, and each Contract has an APR equal to
or greater than 7.25%.
(b) Characteristics. The Contracts have the following
---------------
characteristics as of the Cut-off Date: (i) based on Cut-off Date Pool
Balance, not more than (A) 16.76% of the Contracts are secured by
Manufactured Homes located in any one state and (B) 5.00% of the Contracts
are Land Home Contracts; (ii) no Contract has a remaining term to maturity
of less than 22 months or more than 360 months; (iii) the final scheduled
payment date on the Contract with the latest maturity is in August 2026;
(iv) based on Cut-off Date Pool Balance, approximately 84.20% of the
Contracts relate to purchases of new Manufactured Homes and approximately
15.80% of the Contracts relate to the refinancing of used Manufactured Homes;
and (v) no Contract was originated before November 24, 1992.
(c) Computer Tape. The Computer Tape made available by the
-------------
Servicer as of the close of business on August 31, 1996 was accurate as of
its date and includes a description of the same Contracts that are described
in the Contract Schedule.
(d) Marking Records. Within one month after the Closing Date, the
---------------
Seller will have caused the portions of the Electronic Ledger relating to the
Contracts constituting part of the Trust Fund to be clearly and unambiguously
marked to indicate that such Contracts constitute part of the Trust Fund and
are owned by the Trust Fund in accordance with the terms of the trust created
hereunder.
(e) No Adverse Selection. Except for the effect of the repre
--------------------
sentations and warranties made in Sections 3.02 and 3.03 and the effect of
the geographical distribution of the Manufactured Homes, no adverse selection
procedures have been employed in selecting the Contracts.
Section 3.04. Representations and Warranties as to the Contract Files.
-------------------------------------------------------
The Seller represents and warrants to the other parties hereto and the
Certificateholders as follows. Such representations and warranties shall
speak as of the execution and delivery of this Agreement, but shall survive
the sale, transfer and assignment of the Contracts to the Trustee.
(a) Possession. Immediately prior to the Closing Date, the
----------
Servicer will have possession of each original Contract and the Servicer will
have possession of the remainder of the related Contract File (except for any
certificate of title that has not yet been returned from the appropriate
public recording office). There are and there will be no custodial
agreements in effect materially and adversely affecting the right of the
Seller to make, or to cause to be made, any delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance
------------------
of the Contracts and the Contract Files by the Seller pursuant to this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
Section 3.05. Repurchase of Contracts for Breach.
----------------------------------
(a) The Seller shall repurchase a Contract (each, a "Repurchased
Contract"), at its Repurchase Price, not later than one Business Day after
the first Determination Date which is more than 90 days after the Seller
becomes aware, or receives written notice from the Servicer or the Trustee,
of a breach of a representation or warranty of the Seller set forth in
Section 3.02 or 3.03 (notwithstanding that the Seller may not have had
knowledge of such breach) that materially adversely affects the Trust Fund's
interest in such Contract, unless such breach has been cured.
Notwithstanding the foregoing, with respect to (i) any Contract incorrectly
described on the Contract Schedule with respect to unpaid principal balance,
the Seller may, in lieu of repurchasing such Contract, deposit in the
Certificate Account not later than one Business Day after such Determination
Date cash in an amount sufficient to cure such deficiency or discrepancy and
(ii) a breach of a representation or warranty relating to the Contracts in
the aggregate and not to each particular Contract, the Seller may select
Contracts to repurchase that, had such Contracts not been included as part
of the Contract Pool, there would have been no breach of such representation
or warranty. It is understood and agreed that the obligation of the Seller
to repurchase any Contract as to which a breach of a representation or
warranty set forth in Section 3.02 or 3.03 has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders, the Depositor or the Trustee; provided, however, that the
Seller shall defend and indemnify the Trustee, the Trust Fund and
Certificateholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or suffered by any of them as a result of third-party claims
arising out of any breach of a representation or warranty set forth in
Section 3.02. Nothing in the preceding sentence shall be construed to limit
the indemnification obligations of the Servicer set forth in Section 10.05.
Notwithstanding any other provision of this Agreement, the obligation of the
Seller under this Section shall not terminate upon an Event of Default.
Notwithstanding the foregoing provisions of this Section, the Seller
shall not be required to repurchase any Contract on account of a breach of
the representation or warranty contained in Section 3.02(j) or (t) solely on
the basis of failure by the Seller to cause notations to be made on any docu-
ment of title relating to any Manufactured Home or to execute any transfer
instrument relating to any Manufactured Home (other than a notation or a
transfer instrument necessary to show the Seller as lienholder or legal title
holder) or to record an assignment of a Mortgage unless a court of competent
jurisdiction has adjudged that, because of such failure, the Trustee does not
have a perfected first-priority security interest in the related Manufactured
Home.
Notwithstanding the foregoing, the Seller shall not deposit cash into
the Certificate Account pursuant to this Section after the end of the three
month period beginning on the Closing Date unless it shall first have
obtained an Opinion of Counsel to the effect that such deposit will not give
rise to any Tax under Section 860F(a)(1) of the Code or Section 860G(d) of
the Code. Any such deposit shall not be invested. If the Seller is required
to purchase a Contract (or deposit cash in the Certificate Account), the
Seller shall guarantee the payment of any Tax under Section 860F(a)(1) of the
Code or under Section 860G(d) of the Code by paying to the Trustee the amount
of such Tax not later than five Business Days before such Tax shall be due
and payable to the extent that amounts previously paid over to and then held
by the Trustee pursuant to Section 10.12 are insufficient to pay such Tax and
all other Taxes chargeable under Section 10.12. The Trustee shall hold any
amount paid to it pursuant to the preceding sentence in an account that is
not part of the Trust Fund. The Servicer shall give notice to the Trustee
at the time of such repurchase of the amounts due from the Seller pursuant
to such guarantee of Taxes of the Seller and notice as to who should receive
such payment.
In the event any Tax that is guaranteed by the Seller is refunded to the
Trust Fund or otherwise is determined not to be payable, the Seller shall be
repaid the amount of such refund or that portion of any guarantee payment
made by the Seller that is not applied to the payment of such Tax.
(b) Promptly after the repurchase referred to in Section 3.05(a), the
Trustee shall execute such documents as are presented to it by the Seller and
are reasonably necessary to reconvey the Repurchased Contract to the Seller.
Any amount received on or recovered with respect to Repurchased Contracts
during or after the month of repurchase shall be the property of the Seller
and need not be deposited in the Certificate Account.
Section 3.06. Representation and Warranty as to the Depositor. The
-----------------------------------------------
Depositor represents and warrants to the other parties hereto and the
Certificateholders that, immediately prior to the transfer, sale, assignment
and conveyance of the Contracts to the Trustee and assuming that the
representation and warranty in Section 3.02(n) is correct, the Depositor had
good title to, and was the sole owner of, each Contract and any related
Mortgage free of any Liens created by the Depositor, there had been no other
sale or assignment thereof by the Depositor and the Depositor has transferred
to the Trustee a security interest (as defined in the UCC in effect in the
State of New York) in the Contracts and any related Mortgages, which security
interest is a perfected, first priority security interest.
ARTICLE FOUR
THE CERTIFICATES
Section 4.01. The Certificates. Each Class of Certificates shall be
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substantially in the related forms annexed hereto as Exhibits, with such
immaterial changes as the Depositor deems appropriate, and shall be issued
in minimum denominations of $50,000 and integral multiples of $1,000 in
excess thereof; provided, however, that one Certificate of each Class may be
issued in a denomination that includes any remaining portion of the Original
Principal Balance of such Class of Certificates (each, a "Remainder
Certificate"). The Class R Certificates will not have any principal balance.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trust Fund by a Responsible Officer of the Trustee. The
Certificates shall be authenticated by manual signature on behalf of the
Trustee by a Responsible Officer or an Authenticating Agent. 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 Certificate or did
not hold such offices at the date of such Certificates. No Certificate shall
be entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a manual authentication by the
Trustee or its Authenticating Agent and such authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 4.02. Registration of Transfer and Exchange of Certificates.
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(a) The Trustee shall cause to be kept at its Corporate Trust Office
or, at the election of the Trustee, at the office of its designated agent in
New York City, 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 transfer and exchanges of Certificates
as herein provided. The Trustee initially appoints itself as the Certificate
Registrar.
(b) Subject to Sections 4.02(c) and 11.01(b), upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose, the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, a
Certificate of a like aggregate Percentage Interest and dated the date of
authentication by the Trustee. The Holder and beneficial owner of any
Subordinate Certificate will be deemed to represent that it is not a Benefit
Plan or a trustee of any such Benefit Plan or a person acting on behalf of
any such plan or acquiring a Subordinate Certificate with the assets of any
such Benefit Plan unless it delivers to the Trustee, the Depositor and the
Servicer (i) an Opinion of Counsel satisfactory to the Trustee, the Depositor
and the Servicer, to the effect that the purchase or holding of such
Subordinate Certificate by the prospective transferee will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject
the Trustee, the Depositor or the Servicer to any obligation in addition to
those undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor or the Servicer, and (ii) if the
purchaser is an insurance company, a representation that the purchaser is an
insurance company which is purchasing such Subordinate Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of PTCE 95-60) and that the purchase and holding of
such Subordinate Certificates are covered under PTCE 95-60.
(c) No transfer of a Class R Certificate shall be made unless such
transfer is made pursuant to an effective registration statement or in
accordance with an exemption from the requirements under the Securities Act
or any applicable state securities laws. If such a transfer is to be made
in reliance upon an exemption from the Securities Act and such state
securities laws, prior to the registration of any such transfer (i) the
Trustee, the Depositor or the Servicer may require an Opinion of Counsel as
to the Securities Act and a memorandum of law as to state securities laws,
in each case acceptable to and in form and substance satisfactory to the
Trustee, the Depositor and the Servicer that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act and such state securities laws or is being
made pursuant to the Securities Act and such state securities laws, which
Opinion of Counsel and memorandum of law shall not be an expense of the
Trustee, the Depositor or the Servicer, and (ii) the Trustee shall require
the Transferee to execute a Transfer Affidavit.
No transfer of a Class R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the proposed
Transferee to the effect that such transferee is not a Benefit Plan or a
trustee of any such Benefit Plan or a person acting on behalf of any such
Benefit Plan or acquiring such Certificate with the assets of any such
Benefit Plan or (ii) an Opinion of Counsel satisfactory to the Trustee, the
Depositor and the Servicer, to the effect of the Opinion of Counsel required
by Section 4.02(b)(i), which Opinion of Counsel shall not be an expense of
the Trustee, the Depositor or the Servicer.
(d) At the option of the Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of the same Class and of
authorized denominations of the same aggregate denomination, upon surrender
of the Certificate to be exchanged at any office or agency of the Trustee
maintained for such purpose. Whenever the Certificate is so surrendered for
exchange, the Depositor shall execute and the Trustee or its Authenticating
Agent shall authenticate and deliver, the Certificate or Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange (if so required
by the Trustee) shall be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee or the
Certificate Registrar duly executed by, the Holder thereof or his attorney
duly authorized in writing.
(e) No service charge shall be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate.
(f) All Certificates surrendered for transfer and exchange shall be
held in accordance with the retention policy of the Trustee.
Section 4.03. Book-Entry Certificates.
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(a) Except as provided in Section 4.03(b), the Certificates of each
Class (other than the Class R Certificate and any Remainder Certificate with
respect to any Class) will be evidenced by Book-Entry Certificates which
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Class A, Class M and Class
B Certificates may not be transferred by the Trustee except to another
Depository; (ii) the Depository shall maintain book-entry records with
respect to the Certificate Owners and with respect to ownership and transfers
of such Class A, Class M and Class B Certificates; (iii) ownership and
transfers of registration of the Class A, Class M and Class B Certificates
on the books of the Depository shall be governed by applicable rules
established by the Depository; (iv) the Depository may collect its usual and
customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of
the Class A, Class M and Class B Certificates for purposes of exercising the
rights of Holders under this Agreement, and requests and directions for and
votes of such representatives shall not be deemed to be inconsistent if they
are made with respect to different Certificate Owners; and (vi) the Trustee
may rely and shall be fully protected in relying upon information furnished
by the Depository with respect to its Depository Participants and furnished
by the Depository Participants with respect to indirect participating firms
and persons shown on the books of such indirect participating firms as direct
or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
(b) If (i) the Depositor or the Depository advises the Trustee in
writing that the Depository is no longer willing, qualified or able to
properly discharge its responsibilities as Depository, and (ii) the Depositor
is unable to locate a qualified successor, (A) the Depositor at its option
may advise the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (B) after the occurrence of an Event of
Default, Certificate Owners representing Percentage Interests aggregating not
less than 50% of the Percentage Interests of the Class A, Class M and Class
B Certificates, voting as a single Class, advise the Trustee and the
Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in
the best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully registered Class A, Class
M and Class B Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Class A,
Class M and Class B Certificates by the Depository, accompanied by
registration instructions from the Depository for registration, the Trustee
shall issue the Definitive Certificates. Neither the Depositor nor the
Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository shall
be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(c) On or prior to the Closing Date, there shall be delivered to the
Depository one Class A, Class M and one Class B Certificate in registered
form registered in the name of the Depository's nominee, Cede & Co., the
total face amount of which represents 100% of the Initial Class A Principal
Balance, the Initial Class M Principal Balance and the Initial Class B
Principal Balance, respectively, in each case rounded down to the nearest
$1,000. If, however, the aggregate principal amount of the Class A, Class
M or Class B Certificates exceeds $200,000,000, one Class A, Class M or Class
B Certificate will be issued with respect to each $200,000,000 of principal
amount and an additional Class A, Class M or Class B Certificate will be
issued with respect to any remaining principal amount, rounded down to the
nearest $1,000. Each Class A, Class M or Class B Certificate so registered
shall bear the following legend:
"Unless this Certificate is presented by an authorized
representative of The Depository Trust Company 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 such other name as requested by
an authorized representative of The Depository Trust Company and any payment
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein."
Section 4.04. Mutilated, Destroyed, Lost or Stolen Certificates. If
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(i) any mutilated Certificate is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of
any Certificate, and (ii) there is delivered to the Trustee and the
Certificate Registrar such security or indemnity as may be required by it to
save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the
same Class and of like tenor and denomination. 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 expenses connected therewith. Any
replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the destroyed, lost or stolen Certificate
shall be found at any time.
Section 4.05. Persons Deemed Owners. The Depositor, the Servicer, the
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Trustee, the Certificate Registrar and any Paying Agent may treat the person
in whose name any Certificate is registered as the owner of such Certificate
for the purpose of receiving payments pursuant to Section 6.01 and for all
other purposes whatsoever, and none of the foregoing entities shall be
affected by notice to the contrary.
Section 4.06. Appointment of Paying Agent. The Trustee may appoint a
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Paying Agent for the purpose of making distributions to Certificateholders
pursuant to Section 6.01 and payments pursuant to Section 10.12. Any Paying
Agent so appointed either shall be a bank or trust company or shall have a
rating acceptable to each Rating Agency. In the event of any such
appointment, on or prior to each Distribution Date, the Trustee shall deposit
or cause to be deposited with the Paying Agent, from amounts in the
Certificate Account, a sum sufficient to make the payments to
Certificateholders in the amounts and in the manner provided for in Section
6.01, such sum to be held in trust for the benefit of Certificateholders.
The Trustee initially appoints itself as Paying Agent.
The Trustee shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent is at all times acting
as agent for the Trustee and such Paying Agent will hold all sums held by it
for the payment to Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders.
Section 4.07. Access to List of Certificateholder Names and Addresses.
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The Certificate Registrar will furnish to the Trustee (if the Trustee is not
the Certificate Registrar), the Depositor and the Servicer within five days
after receipt by the Certificate Registrar of a request therefor from the
Trustee, the Depositor or the Servicer in writing, a list, in such form as
the Trustee, the Depositor or the Servicer reasonably may require of the
names and addresses of the Certificateholders as of the most recent Record
Date. If Holders of Certificates of any Class evidencing, as to such Class,
aggregate Percentage Interests of 25% or more (the "Applicants") apply in
writing to the Trustee, and such application states that the Applicants
desire to communicate with other Certificateholders of such Class with
respect to their rights under this Agreement or under the Certificates of
such Class and is accompanied by a copy of the communication which such
Applicants proposed to transmit, then the Trustee, within five Business Days
after the receipt of such application, shall afford such Applicants access
during normal business hours to the most recent list of Certificateholders
of such Class held by the Trustee. If such list is as of a date more than
90 days prior to the date of receipt of such Applicants' request, the Trustee
promptly shall request from the Certificate Registrar a current list as
provided above, and shall afford such Applicants access to such list promptly
upon receipt. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Certificate Registrar and the Trustee that
neither the Servicer, the Certificate Registrar, the Depositor nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 4.08. Authenticating Agents. The Trustee may appoint one or
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more Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates. For all
purposes of this Agreement, the execution and delivery of Certificates by the
Authenticating Agent pursuant to this Section shall be deemed to be the
execution and delivery of Certificates "by the Trustee."
Section 4.09. The Class R Certificates.
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(a) The Class R Certificates may not be assigned or transferred except
in accordance with Sections 4.02, 4.09(b), 4.09(c) and any other applicable
provision of this Agreement. The Holders of the Class R Certificates, by
purchasing such Class R Certificates, for purposes of Section 10.12 (i) shall
be deemed to consent to the appointment of the Servicer as (A) the tax
matters person for the Trust Fund and (B) the attorney-in-fact and agent for
any person that is the tax matters person if the Servicer is unable to serve
as the tax matters person and (ii) agrees to execute any documents required
to give effect to the provisions of clause (i) above.
(b) Each Person who has or acquires any Ownership Interest in a Class
R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and
to have irrevocably appointed the Servicer as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (vi) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Servicer of any change or impending change in its status as a Permitted
Transferee.
(ii) Any Ownership Interest in a Class R Certificate may not be
subject to a Transfer without the express written consent of the Servicer,
and the Trustee shall not recognize, and such proposed Transfer shall not be
effective, without such consent with respect thereto. In connection with any
proposed Transfer of any such Ownership Interest, the Servicer shall, as a
condition to such consent, require delivery to it, in form and substance
satisfactory to it, and the proposed Transferee shall deliver to the Servicer
and the Trustee, the following:
(A) a Transfer Affidavit; and
(B) an express agreement by the proposed Transferee to be
bound by and to abide by the provisions of this Section.
The Servicer shall notify the Trustee of any such Transfer to which it
consents.
(iii) Notwithstanding the delivery of a Transfer Affidavit by
a proposed Transferee under clause (ii) above, if the Servicer or a
Responsible Officer has actual knowledge that the proposed Transferee is not
a Permitted Transferee, no Transfer of any Ownership Interest in a Class R
Certificate to such proposed Transferee shall be effected.
(iv) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to require a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer any Ownership Interest
in such Class R Certificate and (B) not to Transfer any Ownership Interest
in such Class R Certificate or to cause the Transfer of any Ownership
Interest in such Class R Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(v) Any attempted or purported Transfer of any Ownership Interest
in a Class R Certificate in violation of the provisions of this Section shall
be absolutely null and void and shall vest no rights in the purported
Transferee. If any purported Transferee shall become the holder of an
Ownership Interest in a Class R Certificate in violation of the provisions
of this Section, then, upon discovery by a Responsible Officer of, or due
notification to the Trustee that the recognition of the Transfer of such
Ownership Interest in such Class R Certificate was not in fact permitted by
this Section, the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of Transfer of such
Ownership Interest in such Class R Certificate. The Trustee shall promptly
notify the Servicer if it discovers or receives notice of such an
impermissible Transfer. The Trustee shall be under no liability to any
Person for permitting the Transfer of an Ownership Interest in a Class R
Certificate that is in fact not permitted by this Section or for making any
payments in respect of a Class R Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement so long as the Transfer was made with the express prior written
consent of the Servicer. The Trustee shall be entitled but not obligated to
recover from any Holder of a Class R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such subsequent
time as it became other than a Permitted Transferee, all payments made on
such Class R Certificate at and after such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Permitted Transferee of such Class R Certificate.
(vi) If any purported Transferee shall be a Holder of a Class R
Certificate in violation of the restrictions in this Section, then the
Servicer shall have the right without notice to the Holder or any prior
Holder of such Class R Certificate to sell such Class R Certificate to a
purchaser selected by the Servicer on such terms as the Servicer may choose.
Such purchaser may be the Servicer or an Affiliate thereof. The proceeds of
such sale, net of commissions (which may include commissions payable to the
Servicer or its Affiliates), expenses and taxes due, if any, will be remitted
by the Servicer to the last preceding Permitted Transferee of such Class R
Certificate, except that in the event that the Servicer determines that the
Holder or any prior Holder of such Class R Certificate will be liable for any
amount due under this Section or any other provisions of this Agreement, the
Servicer shall so inform the Trustee, and the Trustee shall withhold a
corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (vi) shall be determined
in the sole discretion of the Servicer, and it shall not be liable for the
exercise of such discretion to any Person holding or purporting to hold a
Class R Certificate.
Upon notice to the Servicer that any legal or beneficial interest in any
portion of a Class R Certificate has been transferred, either directly or
indirectly, to any Person that is not a Permitted Transferee or an agent
thereof (including a broker, nominee or middleman) in contravention of the
foregoing restrictions, or that is a pass-through entity, as defined in
Section 860E(e)(6) of the Code, an interest in which is held of record by a
Person that is not a "Permitted Transferee," the Servicer agrees to furnish
to the Internal Revenue Service and those Persons specified in Section
860E(c)(3) and (b) of the Code such information necessary to the application
of Section 860E(e) of the Code as may be required by the Code, including but
not limited to, the present value of the total anticipated excess inclusions
with respect to such Class R Certificate (or portion thereof) for periods
after such Transfer and the total excess inclusions for any taxable year
allocable to any holder of an interest in such pass-through entity which is
not a Permitted Transferee. At the election of the Servicer, the Servicer
may charge a reasonable fee for computing and furnishing such information to
the transferor or to such agent or to such pass-through entity referred to
above; however, the Servicer shall in no event be excused from furnishing
such information to the Internal Revenue Service. The foregoing restrictions
on transfer contained in this Section shall cease to apply to Transfers
occurring on or after the date on which there shall have been delivered to
the Trustee, the Depositor and the Servicer, in form and substance
satisfactory to the Servicer, an Opinion of Counsel that eliminating such
restrictions will not cause the Trust Fund to fail to qualify as a REMIC at
any time while the Certificates are outstanding.
(c) Each Holder of Class R Certificates, by purchasing such Class R
Certificates, agrees to give the Servicer written notice that it is a "pass-
through interest holder" within the meaning of Temporary Treasury Regulations
Section 1.67-3T(a)(2)(i)(A) immediately upon becoming the Holder of a Class
R Certificate, if it is, or is holding such Class R Certificates on behalf
of, a "pass-through interest holder".
(d) No Class R Certificate shall be registered in the name of the
Depositor or any Person known to a Responsible Officer to be an Affiliate
thereof, and no Subordinate Certificate shall be registered in the name of
the Depositor or any such Affiliate, unless the Trustee shall first have
received written notification from each Rating Agency that such Transfer will
not cause a reduction or withdrawal of the rating then assigned to any of the
Rated Certificates.
ARTICLE FIVE
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 5.01. Responsibility for Contract Administration and Servicing.
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The Servicer shall service and administer the Contracts as agent for the
Trustee and, subject to the terms of this Agreement, shall have full power
and authority to do any and all things which it may deem necessary or
desirable in connection with such servicing and administration.
Section 5.02. Standard of Care. In managing, administering, servicing
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and making collections on the Contracts pursuant to this Agreement, the
Servicer will exercise the same degree of skill and care, consistent with the
terms of this Agreement, that the Servicer exercises in managing, servicing,
administering and collecting on similar manufactured housing installment
sales contracts and installment loan agreements owned and serviced by the
Servicer; provided, however, that nothing herein shall require the Servicer
to violate any applicable federal, state or local common or statutory law,
regulation or rule. Without limiting the generality of the foregoing, the
Servicer hereby is authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment, to execute and deliver, on
behalf of the Certificateholders and the Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge and all other comparable instruments, with respect to the
Contracts and any related Mortgages and with respect to the Manufactured
Homes and any related Mortgaged Properties. The Trustee shall furnish the
Servicer with all powers of attorney and other documents necessary or
appropriate to enable the Servicer to service and administer the Contracts.
For purposes of this Agreement, the Trustee shall be deemed to have given to
the Servicer a power of attorney for purposes of servicing the Contracts.
Section 5.03. Records. The Servicer, during the period it is servicer
-------
hereunder, shall maintain such books of account and other records as will
enable the Trustee (if the Trustee so elects in its discretion) to determine
the status of each Contract. Without limiting the generality of the
preceding sentence, the Servicer shall keep such records in respect of
Liquidation Expenses as will enable the Trustee (if the Trustee so elects in
its discretion) to determine that the correct amount of Net Liquidation
Proceeds in respect of a Liquidated Contract has been deposited in the
Certificate Account.
Section 5.04. Inspection.
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(a) During the term of this Agreement, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business
hours to the Servicer's records relating to the Contracts and will cause its
personnel to provide reasonable assistance in any examination of such records
by the Trustee or any of its authorized agents. The examination and
assistance referred to in this Section will be conducted in a manner which
does not interfere unreasonably 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 Contract and review the records relating thereto for
conformity to Monthly Reports prepared pursuant to Section 7.01 and
compliance with the standards represented to exist as to each Contract in
this Agreement.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the Contract Schedule at its principal executive office
for inspection by Certificateholders.
Section 5.05. Payment of Taxes. If the Servicer becomes aware of the
----------------
nonpayment by an Obligor of a personal property Tax or other Tax or Tax
related charge which may result in a lien upon a Manufactured Home prior to,
or equal to or coordinate with, the lien of the related Contract, the
Servicer, consistent with Section 5.02, shall take action to avoid the
attachment of any such lien. If the Servicer shall have paid any such
personal property Tax or other Tax or Tax related charge directly on behalf
of an Obligor, the Servicer shall seek reimbursement therefor only from the
related Obligor (except as provided in the last sentence of this Section) and
may separately add such amount to the Obligor's obligation as provided by the
Contract, but, for the purposes of this Agreement, may not add such amount
to the unpaid principal balance of the Contract. If the Servicer shall have
repossessed a Manufactured Home on behalf of the Certificateholders and the
Trustee, the Servicer shall pay the amount of any such personal property Tax
or other Tax or Tax related charge arising during the time such Manufactured
Home is in the Servicer's possession, unless the Servicer is contesting in
good faith the validity of such personal property Tax or other Tax or Tax
related charge on such Manufactured Home. If the Obligor does not reimburse
the Servicer for payment of taxes pursuant to this Section and the related
Contract is liquidated after a default, the Servicer shall be reimbursed for
its payment of such Taxes out of the related Liquidation Proceeds.
Section 5.06. Enforcement.
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(a) When the Servicer shall sue to enforce or collect upon Contracts,
then it shall bring suit in its own name, if possible, or as agent for the
Trust Fund. If the Servicer elects to commence a legal proceeding to enforce
a Contract, the act of commencement shall be deemed to be an automatic
assignment of the Contract to the Servicer for purposes of collection only.
If, however, in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Contract on the ground that it is not a real party
in interest or a holder entitled to enforce the Contract, the Trustee on
behalf of the Certificateholders shall, at the Servicer's expense, take such
steps as the Servicer deems necessary to enforce the Contract, including
bringing suit in its name or the names of the Certificateholders. If there
has been a recovery of attorneys' fees in favor of the Servicer or the Trust
Fund in an action involving the enforcement of a Contract, the Servicer shall
be reimbursed out of such recovery for its out-of-pocket attorney's fees and
expenses incurred in such enforcement action.
(b) The Servicer shall exercise any rights of recourse against third
Persons that exist with respect to any Contract in accordance with Section
5.02. In exercising such rights, the Servicer is authorized on the Trustee's
behalf to reassign the Contract or to resell the related Manufactured Home
to the Person against whom recourse exists at the price set forth in the
document creating the recourse.
(c) The Servicer may grant to the Obligor on any Contract any rebate,
refund or adjustment out of the Certificate Account that is required because
of an overpayment in connection with the prepayment in full of the Contract
or otherwise. The Servicer, except as required by the Contract or by law,
will not permit any rescission or cancellation of any Contract.
Section 5.07. Hazard Insurance Policies.
-------------------------
(a) Except as otherwise provided in Section 5.07(b), the Servicer shall
cause to be maintained with respect to each Contract (other than contracts
relating to REO Properties) one or more Hazard Insurance Policies which
provide the same coverage as a standard form fire and extended coverage
insurance policy that is customary in the Servicer's procedures for
manufactured housing contracts owned and/or serviced by the Servicer, issued
by a company authorized to issue such policies in the state in which the
Manufactured Home is located, and in an amount which is not less than the
lesser of the maximum insurable value or the unpaid principal balance of the
related Contract. Each 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. If any Obligor is in default in the
payment of premiums on its Hazard Insurance Policy or Policies, the Servicer
shall pay such premiums out of its own funds, and may add separately such
premium and any related interest to the Obligor's obligation as provided by
the Contract but may not add such premium and interest to the unpaid
principal balance of the Contract for purposes of this Agreement. If the
Obligor does not reimburse the Servicer for payment of such premiums and the
related Contract is liquidated after a default, the Servicer shall be
reimbursed for its payment of such premiums out of the related Liquidation
Proceeds.
(b) The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
this Section, and shall, to the extent that a Contract does not require the
Obligor to maintain a Hazard Insurance Policy with respect to the related
Manufactured Home, maintain one or more blanket insurance policies covering
losses in a connection with a hazard as provided in Section 5.07(a) resulting
from the absence or insufficiency of individual Hazard Insurance Policies.
Any such blanket policy shall be in the amount sufficient to cover all losses
in a connection with a hazard on the Contracts. The Servicer shall pay, out
of its own funds, the premium for such policy on the basis described therein
and shall deposit in the Certificate Account, on the Business Day next
preceding the Determination Date following the Due Period in which the
insurance proceeds from claims in respect of any Contracts under such blanket
policy are or would have been received, the deductible amount with respect
to such claims. The Servicer shall not, however, be required to deposit any
deductible amount with respect to claims under individual Hazard Insurance
Policies maintained pursuant to Section 5.07(a).
(c) If the Servicer shall have repossessed a Manufactured Home on
behalf of the Trustee or foreclosed upon or otherwise acquired any Mortgaged
Property, the Servicer shall either (i) maintain at its expense a Hazard
Insurance Policy with respect to such Manufactured Home or Mortgaged Property
meeting the requirements of Section 5.07(a) or 5.07(b), except that the
Servicer shall be responsible for depositing any deductible amount with
respect to all claims under individual Hazard Insurance Policies or (ii)
indemnify the Trust Fund against any damage to such Manufactured Home prior
to resale or other disposition.
(d) Any cost incurred by the Servicer in maintaining any of the
foregoing insurance, for the purpose of calculating monthly distributions to
Certificateholders, shall not be added to the principal balance of the
Contract, notwithstanding that the terms of the Contract so permit. The
Servicer shall not be entitled to reimbursement from the Depositor, the
Trustee or the Certificateholders for such costs. Such costs (other than the
cost of the blanket policy) shall only be recovered out of late payments by
the Obligor for such premiums or, if the related Contract is liquidated after
a default, out of the related Liquidation Proceeds.
Section 5.08. Reserved.
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Section 5.09. Hazard Insurance Policy Collections; Consent to
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Manufactured Home Transfers; Assumption Agreements.
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(a) The Servicer agrees to present, on behalf of itself, the Trustee
and Certificateholders, claims to the insurer under any Hazard Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Hazard Insurance Policies. Any
amounts collected by the Servicer under any such Hazard Insurance Policies
shall be deposited in the Certificate Account pursuant to Section 6.04(b)(v),
except to the extent they are applied to the restoration of the related
Manufactured Home or released to the related Obligor in accordance with the
normal servicing procedures of the Servicer.
(b) The Servicer shall not withhold its consent to any transfer of
ownership of a Manufactured Home in accordance with the related Contract
unless the proposed transferee does not meet the Servicer's then applicable
underwriting standards (exclusive of down payment requirements). In
addition, the Servicer shall not withhold such consent if such withholding
of consent is not permitted under applicable law and governmental
regulations.
(c) In any case in which a Manufactured Home is to be conveyed to a
Person by an Obligor, and such Person is to enter into an assumption
agreement or modification agreement or supplement to the Contract, upon the
closing of such conveyance, the Servicer shall cause the originals of the
assumption agreement, the release (if any) or the modification or supplement
to the Contract to be included in the related Contract File. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement with respect to such Contract will be retained by the
Servicer as additional servicing compensation. In connection with any such
conveyance through an assumption, modification or supplement, the APR borne
by, and all other material terms of, the related Contract shall not be
changed.
Section 5.10. Realization upon Defaulted Contracts. Subject to
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applicable law, the Servicer shall repossess, replevin, foreclose upon or
otherwise comparably convert the ownership of Manufactured Homes and any
related Mortgaged Properties securing all Contracts that come into default
and which the Servicer believes in its good faith business judgment will not
be brought current; provided that if the Servicer has actual knowledge that
a Mortgaged Property is affected by hazardous waste, then the Servicer shall
not cause the Trust Fund to acquire title to such Mortgaged Property in a
foreclosure or similar proceeding. 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 consistent
with Section 5.02. Subject to the foregoing proviso, in the event that title
to any Mortgaged Property is acquired in foreclosure or by deed in lieu of
foreclosure, the deed or certificate of sale shall be issued to the Trustee,
as Trustee, or, at its election, to its nominee on behalf of the Trustee, as
Trustee. The Servicer shall manage, conserve and protect such Manufactured
Homes and any related Mortgaged Property for the purposes of their prompt
disposition and sale, and shall dispose of such Manufactured Homes and any
related Mortgaged Property on such terms and conditions as are consistent
with Sections 5.02 and 10.12.
Section 5.11. Costs and Expenses. All costs and expenses incurred by
------------------
the Servicer in carrying out its duties under this Agreement, including all
fees and expenses incurred in connection with the enforcement of Contracts
(including enforcement of defaulted Contracts and repossessions of
Manufactured Homes securing such Contracts), shall be paid by the Servicer
and the Servicer shall not be entitled to reimbursement hereunder, except to
the extent such reimbursement is specifically provided for in this Agreement.
Notwithstanding the foregoing, the Servicer shall be reimbursed out of the
Liquidation Proceeds of a defaulted Contract for Liquidation Expenses
incurred by it in realizing upon the related Manufactured Home and any
related Mortgaged Property, including, but not limited to: (i) costs of
refurbishing and securing such Manufactured Home; (ii) transportation
expenses incurred in moving the Manufactured Home; (iii) reasonable legal
fees and expenses of outside counsel and any associated court costs; (iv)
rental expenses (including the payment of rent not paid by the defaulting
Obligor) incurred in maintaining a leasehold interest for the Manufactured
Home; and (v) sales commissions paid to Persons that are not Affiliates of
the Servicer. The Servicer shall not incur the foregoing Liquidation
Expenses unless it determines in its good faith business judgment that
incurring such expenses is in accordance with Section 5.02 and will increase
the Net Liquidation Proceeds from such Manufactured Home.
Section 5.12. Trustee to Cooperate. The Servicer is authorized to
--------------------
execute an instrument in satisfaction of any Contract paid in full and 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 related
Mortgaged Property related thereto. The Servicer shall determine when a
Contract has been paid in full; to the extent insufficient payments are
received on a Contract mistakenly determined by the Servicer to be prepaid
or paid in full and satisfied, the shortfall shall be paid by the Servicer
out of its own funds by deposit into the Certificate Account. Upon request
of a Servicing Officer, the Trustee shall 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.
Section 5.13. Servicing and Other Compensation. The Servicer, as
--------------------------------
compensation for its activities hereunder including, without limitation, the
payment of fees and expenses of the Trustee pursuant to Section 10.05, shall
be entitled to receive on each Distribution Date the Monthly Servicing Fee
pursuant to Section 6.02. Application fees, Late Payment Fees, Extension
Fees, processing fees and any transfer of equity or assumption fees shall be
retained by the Servicer as additional servicing compensation.
Section 5.14. Custody of Contracts.
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(a) Subject to the terms and conditions of Section 3.04(a) and this
Section, the Trustee hereby appoints the Servicer custodian for the benefit
of the Certificateholders and the Trustee, and the Servicer shall maintain
custody of the Contract Files as custodian therefor.
(b) The Servicer agrees to maintain the related Contract Files at its
offices where they are presently maintained, or at such other offices of the
Servicer in the States of Florida, Georgia, Ohio, Oregon and Texas as shall
from time to time be identified to the Trustee by ten days' prior written
notice. The Servicer may temporarily move individual Contract Files or any
portion thereof without notice as necessary to conduct collection and other
servicing activities in accordance with its customary practices and
procedures.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Certificateholders
and the Trustee, maintain accurate records pertaining to each Contract to
enable it to comply with the terms and conditions of this Agreement, and
maintain a current inventory list thereof;
(ii) cause Contract Files to be subject to the same policies and
procedures with respect to individuals authorized to have access to the
Contract Files on the Servicer's premises, as are contracts owned and
serviced by the Servicer; and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Certificateholders and the
Trustee in accordance with the standard of care in Section 5.02.
(d) In acting as custodian of the Contract Files, the Servicer agrees
not to assert any beneficial ownership interests in the Contracts or the
Contract Files. The Servicer agrees to indemnify the Certificateholders and
the Trustee for any and all losses, liabilities, claims, damages and expenses
of any kind whatsoever which may be imposed on, incurred or asserted against
the Certificateholders and the Trustee as the result of any act or omission
by the Servicer relating to the maintenance and custody of the Contract
Files; provided, however, that the Servicer will not be liable for any
portion of any such amount resulting from the negligence or willful
misconduct of any Certificateholder or the Trustee.
(e) The Servicer shall promptly report to the Trustee any failure by
it to hold the Contract Files as herein provided and shall promptly take
appropriate action to remedy any such failure.
(f) If the credit rating of the long term debt of AFCC shall be reduced
to lower than A3 from Moody's or the long term debt of AFCC shall be reduced
to lower than BBB from Standard & Poor's, FCFC shall no longer act as
custodian of the Contract Files pursuant to this Section. Upon such an
event, FCFC shall, as soon as practicable, and in no event more than 90 days
after such event, deliver each Contract File to the Trustee, or its
custodian.
Section 5.15. REO Disposition The Servicer shall sell each REO
---------------
Property within two years of its acquisition by the Trust Fund, unless, at
the request of the Servicer, the Trustee seeks, and subsequently receives,
an Opinion of Counsel, addressed to the Trustee and the Servicer, to the
effect that the holding by the Trust Fund of such REO Property subsequent to
such time will not result in the imposition of Taxes on "prohibited
transactions" of the Trust Fund as defined in Section 860F of the Code or
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding. The Servicer shall manage, conserve, protect
and operate each REO Property solely for the purpose of its prompt
disposition and sale in a manner that does not cause any such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) or result in the receipt by the REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code
or any "net income from foreclosure property" which is subject to taxation
under the REMIC Provisions. Pursuant to its efforts to sell a REO Property,
the Servicer shall either itself or through an agent selected by it protect
and conserve such REO Property in the same manner and to such extent as is
customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as it deems to be in
the best interests of it and the Certificateholders for the period prior to
the sale of such REO Property.
The disposition of REO Property shall be carried out by the Servicer at
such price and upon such terms and conditions as the Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities.
The proceeds from the REO disposition, net of any reimbursement to the
Servicer as provided above, shall be deposited in the Certificate Account in
accordance with Section 6.04(b)(ii).
ARTICLE SIX
DISTRIBUTIONS
Section 6.01. Monthly Payments.
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(a) On each Distribution Date the Trustee shall, based upon the
information set forth in the related Monthly Report, withdraw from the
Certificate Account an amount equal to the Available Distribution Amount and
apply such amount as set forth below:
(i) to the Holders of each Class of Class A Certificates, the
related Class Interest Formula Distribution Amount and, if the Available
Distribution Amount is less than the such amount, such amount will be
distributed on each such Class pro rata on the basis of the interest due
thereon;
(ii) to the Class M Certificateholders, (a) the Class M
Interest Formula Distribution Amount and (b) to the extent that the remaining
Available Distribution Amount is insufficient to make the full distribution
in clause (a) above, the Class M Reserve Account Draw Amount, if any, shall
be available for such purpose;
(iii) to the Class B-1 Certificateholders, (a) the Class B-1
Interest Formula Distribution Amount and (b) to the extent that the remaining
Available Distribution Amount is insufficient to make the full distribution
in clause (a) above, the Class B-1 Reserve Account Draw Amount, if any, shall
be available for such purpose;
(iv) to the Class B-2 Certificateholders, (a) the Class B-2
Interest Formula Distribution Amount and (b) to the extent that the remaining
Available Distribution Amount is insufficient to make the full distribution
in clause (a) above, the Class B-2 Reserve Account Draw Amount shall, if any,
be available for such purpose;
(v) to the Class A Certificateholders, an amount equal to any
Unpaid Class A Principal Shortfall and, if the remaining Available
Distribution Amount is less than such amount, such remaining Available
Distribution Amount will be distributed on each Class of Class A Certificates
pro rata based on the Principal Balance of each such Class;
(vi) to the Holders of each Class of Class A Certificates, (a)
if the Class B Cross-over Date has not yet occurred or if the Class B
Principal Distribution Tests are not satisfied for such Distribution Date,
an amount equal to the Formula Principal Distribution Amount or (b) if the
Class B Cross-over Date has occurred and the Class B Principal Distribution
Tests are satisfied for such Distribution Date, an amount equal to the Class
A/M Percentage of the Formula Principal Distribution Amount, in either case
in the following manner and in the following order of priority:
(1) to the Class A-1 Certificateholders until the Class
A-1 Principal Balance has been reduced to zero;
(2) to the Class A-2 Certificateholders until the Class
A-2 Principal Balance has been reduced to zero;
(3) to the Class A-3 Certificateholders until the Class
A-3 Principal Balance has been reduced to zero;
(4) to the Class A-4 Certificateholders until the Class
A-4 Principal Balance has been reduced to zero; and
(5) to the Class A-5 Certificateholders until the Class
A-5 Principal Balance has been reduced to zero;
(vii) to the Class M Certificateholders, an amount equal to any
Unpaid Class M Principal Shortfall;
(viii) to the Class M Certificateholders, an amount equal to the
excess, if any, of the Formula Principal Distribution Amount or the Class A/M
Percentage of the Formula Principal Distribution Amount, as the case may be,
over the amount due to be distributed pursuant to clause (vi) above, until
the Class M Principal Balance has been reduced to zero;
(ix) to the Class M Certificateholders, (a) an amount equal
to any (1) Class M Liquidation Loss Interest Amount and (2) Class M Unpaid
Liquidation Loss Interest Shortfall, together with interest thereon, to the
extent legally permissible, at the Class M Pass-Through Rate, and (b) to the
extent that the remaining Available Distribution Amount is insufficient to
make the full distribution in clause (a) above, the Class M Reserve Account
Draw Amount, to the extent not already distributed to the Class M Certifi-
cateholders in clause (ii) above, if any, shall be available for such
purpose;
(x) to the Class B-1 Certificateholders, an amount equal to
any Unpaid Class B-1 Principal Shortfall;
(xi) to the Class B-1 Certificateholders, (a) if the Class B
Cross-over Date has occurred and if the Class B Principal Distribution Tests
are met for such Distribution Date or (b) if each of the Class A Principal
Balance and the Class M Principal Balance has been or is reduced to zero on
or before such Distribution Date, an amount equal to the excess, if any, of
the Formula Principal Distribution Amount over the amount to be distributed
pursuant to clauses (vi) and (viii) above, until the Class B-1 Principal
Balance has been reduced to zero;
(xii) to the Class B-1 Certificateholders, (a) an amount equal
to any (1) Class B-1 Liquidation Loss Interest Amount and (2) Class B-1
Unpaid Liquidation Loss Interest Shortfall, together with interest thereon,
to the extent legally permissible, at the Class B-1 Pass-Through Rate and (b)
to the extent that the remaining Available Distribution Amount is
insufficient to make the full distribution in clause (a) above, the Class B-1
Reserve Account Draw Amount, to the extent not already distributed to the
Class B-1 Certificateholders in clause (iii) above, if any, shall be
available for such purpose;
(xiii) to the Class B-2 Certificateholders, an amount equal to
any Unpaid Class B-2 Principal Shortfall;
(xiv) to the Class B-2 Certificateholders, (a) if the Class B
Cross-over Date has occurred for such Distribution Date, the Class B
Principal Distribution Tests are met for such Distribution Date and the Class
B-1 Principal Balance has been or is reduced on or prior to such Distribution
Date, an amount equal to the excess, if any, of the Formula Principal
Distribution Amount over the amount due to be distributed pursuant to clauses
(vi), (viii) and (xi) above, until the Class B-2 Principal Balance has been
reduced to the Class B-2 Floor Amount;
(xv) to the Class A, Class M, Class B-1 and Class B-2
Certificateholders in the order of priority set forth in clauses (vi),
(viii), (xi) and (xiv) above, an amount equal to the excess, if any, of the
Formula Principal Distribution Amount over the amount due to be distributed
pursuant to clauses (vi), (viii), (xi) and (xiv) above;
(xvi) to the Class B-2 Certificateholders, (a) an amount equal
to any (1) Class B-2 Liquidation Loss Interest Amount and (2) Class B-2
Unpaid Liquidation Loss Interest Shortfall, together with interest thereon,
to the extent legally permissible, at the Class B-2 Pass-Through Rate and (b)
to the extent that the remaining Available Distribution Amount is
insufficient to make the full distribution in clause (a) above, the Class B-2
Reserve Account Draw Amount, to the extent not already distributed to the
Class B-2 Certificateholders in clause (iv) above, if any, shall be available
for such purpose;
(xvii) to the Reserve Fund, any remaining Available Distribution
Amount until the amount on deposit therein, after giving effect to all
withdrawals therefrom to be made in connection with such Distribution Date,
equals the Reserve Fund Requirement;
(xviii) to the Class M Reserve Account, any remaining Available
Distribution Amount until the amount on deposit therein, after giving effect
to any Class M Reserve Account Draw Amount made with respect to such
Distribution Date, equals the Class M Reserve Account Requirement for the
immediately succeeding Distribution Date;
(xix) to the Class B-1 Reserve Account, any remaining Available
Distribution Amount until the amount on deposit therein, after giving effect
to any Class B-1 Reserve Account Draw Amount made with respect to such
Distribution Date, equals the Class B-1 Reserve Account Requirement for the
immediately succeeding Distribution Date;
(xx) to the Class B-2 Reserve Account, any remaining Available
Distribution Amount until the amount on deposit therein, after giving effect
to any Class B-2 Reserve Account Draw Amount made with respect to such
Distribution Date, equals the Class B-2 Reserve Account Requirement for the
immediately succeeding Distribution Date; and
(xxi) to the holder of the Class R Certificate, any remainder.
Notwithstanding the prioritization of the distribution of the Formula
Principal Distribution Amount pursuant to clause (vi) above, (a) on and after
the Distribution Date, if any, on which a Deficiency Event occurs, the
Available Distribution Amount remaining after making the distributions
required by clauses (i) through (v) above will be applied to distribute the
Formula Principal Distribution Amount on the Class A Certificates pro rata
in accordance with the Principal Balance of each such Class of Class A
Certificates until the Class A-1, Class A-2, Class A-3, Class A-4 and Class
A-5 Principal Balances have been reduced to zero; and (b) the aggregate
amounts distributed to Certificateholders of each Class of Certificates on
account of principal shall not exceed the Original Principal Balance of such
Class of Certificates. Distributions to the Certificateholders shall be made
such that the Trustee shall distribute to each Certificateholder as of the
related Record Date an amount equal to, in the case of (A) the Class A
Certificates, the product of the aggregate Percentage Interest evidenced by
such Certificateholder's Class A Certificates and the Class A-1, Class A-2,
Class A-3, Class A-4 or Class A-5 Distribution Amount, as the case may be,
for such Distribution Date, (B) the Class M Certificates, the product of the
aggregate Percentage Interest evidenced by such Certificateholder's Class M
Certificates and the Class M Distribution Amount for such Distribution Date,
(C) the Class B Certificates, the product of the aggregate Percentage
Interest evidenced by such Certificateholder's Class B Certificates and the
Class B-1 or B-2 Distribution Amount, as the case may be, for such
Distribution Date and (D) the Class R Certificates, the entire amount
distributable in respect thereof on such Distribution Date.
The Trustee shall pay each Certificateholder of record by check mailed
to such Certificateholder at the address for such Certificateholder appearing
on the Certificate Register; provided that (i) so long as DTC or its nominee
is the Depository, or (ii) if neither DTC nor its nominee is the Depository
and such Certificateholder holds Certificates with original denominations
aggregating at least $5 million and has given the Trustee appropriate written
instructions at least five Business Days prior to the related Record Date
(which instructions, until revised, shall remain operative for all
Distribution Dates thereafter), the Trustee shall pay such Certificateholder
by wire transfer of funds. If on any Determination Date the Servicer
determines that there are no Contracts outstanding and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Servicer promptly shall instruct the Trustee to send the final distribution
notice to each Certificateholder and make provision for the final
distribution in accordance with Section 11.01(b). Final payment of any
Certificate shall be made only upon presentation of such Certificate at the
office or agency of the Certificate Registrar.
(b) On each Distribution Date, the Trustee shall withdraw from the
Certificate Account (solely out of the Available Distribution Amount and any
aggregate Repossession Profits for such Distribution Date after giving effect
to the distributions made to the Certificateholders pursuant to Section
6.01(a) on such Distribution Date) and distribute to the holder of the Class
R Certificate the Class R Distribution Amount for such Distribution Date.
Such distribution shall be made by a means that is mutually acceptable to the
Trustee and the holder of the Class R Certificate.
(c) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, which shall credit the amount of such distribution
to the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall
be responsible for disbursing funds to the Certificate Owners that it
represents. All such credits and disbursements with respect to a Book-Entry
Certificate are to be made by the Depository and the Depository Participants
in accordance with the provisions of the related Certificates. Neither the
Trustee, the Certificate Registrar, the Depositor nor the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law.
To the extent applicable and not contrary to the rules of the Depository, the
Trustee shall comply with the provisions of the forms of the Certificates as
set forth as Exhibits.
Section 6.02. Withdrawals from the Certificate Account.
----------------------------------------
(a) The Servicer may from time to time as provided herein, make
withdrawals or the Trustee shall make such withdrawals at the request of the
Servicer to be made from the Certificate Account of amounts deposited therein
pursuant to Section 6.04 that are attributable to the Contracts for the
following purposes:
(i) to pay to the Seller with respect to each Repurchased
Contract in respect thereof all amounts received thereon that are specified
in such Section to be property of the Seller;
(ii) to reimburse itself for the payment of Taxes out of
Liquidation Proceeds (to the extent not previously retained from such
Liquidation Proceeds prior to their deposit) or out of payments expressly
made by the related Obligor to reimburse the Servicer for such Taxes, as
permitted by Section 5.05;
(iii) to pay to itself the Monthly Servicing Fee;
(iv) to reimburse itself or a previous Servicer out of
Liquidation Proceeds (to the extent not previously retained from Liquidation
Proceeds prior to their deposit in the Certificate Account) in respect of a
Manufactured Home and out of payments by the related Obligor (to the extent
of payments expressly made by the Obligor to reimburse the Servicer for
insurance premiums) for expenses incurred by it in respect of such
Manufactured Home that are specified as being reimbursable to it pursuant to
Section 5.06, 5.07 or 5.11 or to a previous Servicer under Section 8.08;
(v) to reimburse itself for any Nonrecoverable Advance or
Advances in accordance with Section 6.03(c) or 6.03(b) and for advances in
respect of Liquidated Contracts in accordance with Section 6.03(c);
(vi) after the Class B Principal Balance has been reduced to
zero, to reimburse the Depositor for expenses incurred and reimbursable to
it pursuant to Section 8.06; and
(vii) to withdraw any amount deposited in the Certificate
Account that was not required to be deposited therein (including any
collections on the Contracts that, pursuant to Section 2.01, are not part of
the Trust Fund).
(b) Since, in connection with withdrawals pursuant to Section
6.02(a)(i), (a)(ii) and (a)(iv), the Servicer's entitlement thereto is
limited to collections or other recoveries on the related Contract, the
Servicer shall keep and maintain separate accounting, on a Contract by
Contract basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such clauses.
Section 6.03. Advances.
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(a) By the close of business on each Deposit Date the Servicer shall
deposit in the Certificate Account, out of its own funds, an amount equal to
the Advance.
(b) On each Distribution Date, the Servicer shall reimburse itself for
the Outstanding Amount Advanced to the extent of actual collections of late
scheduled payments on the related Contracts.
(c) If the Servicer determines that any Advance made pursuant to
Section 6.03(a) has become a Nonrecoverable Advance and at the time of such
determination there exists an Outstanding Amount Advanced, then the Servicer
shall reimburse itself out of funds in the Certificate Account for the amount
of such Nonrecoverable Advance, but only to the extent of such Outstanding
Amount Advanced.
Section 6.04. Establishment of and Deposits in Certificate Account.
----------------------------------------------------
(a) On or before the Closing Date, the Trustee shall establish and
thereafter maintain, one or more Certificate Accounts which are Eligible
Accounts, in the form of separate custodial accounts, titled "Associates
Manufactured Housing Contract Pass-Through Certificates, Series 1996-1 (CS
First Boston Mortgage Securities Corp., Depositor) in trust for the Trustee".
The Trustee shall cause monies in the Certificate Account to be invested in
Eligible Investments selected by the Depositor, which shall mature or, in the
case of a money market fund, be redeemed not later than the Deposit Date next
following the date of such investment (except that if such Eligible
Investment is an obligation of the institution that maintains the Certificate
Account, then such Eligible Investments shall mature or, in the case of a
money market fund, be redeemed not later than the related Distribution Date)
and shall not be sold or disposed of prior to its maturity. All such
Eligible Investments shall be made in the name of the Trustee. The Depositor
shall select such Eligible Investments so as to achieve the following
objectives in the order stated: (i) preservation of principal values and
(ii) maximization of income. If an instrument or account ceases to meet the
requirements of an Eligible Investment or Eligible Account, the Trustee shall
cause all monies in such investment and account to be withdrawn and deposited
in an Eligible Investment (which Eligible Investment shall be selected by the
Servicer) or Eligible Account, as the case may be, within 20 Business Days
of the occurrence of such investment or account ceasing to meet such
requirements. All net income and gain realized from any such investments,
to the extent provided by this Agreement, shall be added to the Certificate
Account.
(b) So long as FCFC is the Servicer and the credit rating of the long-
term unsecured debt of AFCC is at least A2 from Moody's or A from Standard
& Poor's and the credit rating of the short-term unsecured debt is at least
P-1 from Moody's or A-1 from Standard & Poor's, the Servicer shall deposit
in the Certificate Account not later than the close of business on each
Deposit Date the following amounts (net of all amounts the Servicer, if FCFC
or AHFSI is acting as Servicer, would be entitled to withdraw therefrom
pursuant to Section 6.02) in respect of the related Distribution Date and Due
Period:
(i) all amounts received from Obligors with respect to
principal of and interest on the Contracts;
(ii) all Net Liquidation Proceeds and the proceeds of the
disposition of REO Properties;
(iii) all amounts required to be deposited by the Seller
pursuant to Section 3.05(a);
(iv) all Advances pursuant to Section 6.03;
(v) deductible amounts in respect of Hazard Insurance
Policies pursuant to Section 5.07(b) and, to the extent provided in
Section 5.09(a), amounts collected by the Servicer under Hazard Insurance
Policies; and
(vi) all Reserve Fund Draw Amounts required to be withdrawn
from the Reserve Fund pursuant to Section 6.05.
Notwithstanding the foregoing, if FCFC is acting as Servicer
hereunder and the credit rating of the long-term debt obligations of AFCC is
reduced below A2 from Moody's or A from Standard & Poor's or the credit
rating of the short-term debt obligations of AFCC is reduced below P-1 from
Moody's or A-1 from Standard & Poor's, the Servicer shall make the deposits
described above within two Business Days of receipt thereof.
Section 6.05. Reserve Fund.
------------
(a) On or before the Closing Date, the Trustee shall establish and
shall thereafter maintain the Reserve Fund, which shall be an Eligible
Account, in the form of a custodial account. The Seller shall deposit into
the Reserve Fund the Initial Reserve Fund Deposit Amount. The Reserve Fund
shall be in the name of the Trustee, or shall be designated in a manner that
reflects that all monies on deposit therein are held in trust for the benefit
of the Trustee. The Trustee shall invest all funds on deposit in the Reserve
Fund in Eligible Investments selected by the holders of a majority in
interest (by Percentage Interest) of the Class R Certificates, which shall
be subject to the maturity requirements and investment criteria of Eligible
Investments pursuant to Section 6.04(a). All such Eligible Investments shall
be made in the name of the Trustee. All net income and gain realized from
any such investments shall be added to the Reserve Fund. To the extent the
Reserve Fund exceeds the Reserve Fund Requirement, the excess on deposit
therein shall be payable by the Trustee first to the Class M Reserve Account
up to the Class M Reserve Account Requirement, second to the Class B-1
Reserve Account up to the Class B-1 Reserve Account Requirement, third to the
Class B-2 Reserve Account up to the Class B-2 Reserve Account Requirement and
fourth to the Class R Certificateholders. The Reserve Fund is an asset of
the REMIC and any amounts remaining in the Reserve Fund after all payments
are made on the Certificates will be distributed to the holders of the Class
R Certificates.
(b) No later than the close of business on each Deposit Date, after
giving effect to the distribution of the Available Distribution Amount
pursuant to Section 6.01(a), the Trustee shall, based on information in the
related Monthly Report, withdraw from the Reserve Fund and deposit to the
Certificate Account the amount of the Reserve Fund Draw Amount, if any, for
such Distribution Date. Such monies will be applied on the Certificates
pursuant to Section 6.01(a).
(c) On the final Distribution Date, after giving effect to all
distributions to be made on the Certificates, any amount remaining on deposit
in the Reserve Fund will be distributed to the Class R Certificateholders in
accordance with their respective Percentage Interests.
Section 6.06. Reserve Accounts.
----------------
(a) On or before the Closing Date, the Trustee shall establish and
shall thereafter maintain the Class M Reserve Account, the Class B-1 Reserve
Account and the Class B-2 Reserve Account, each of which shall be an Eligible
Account, in the form of custodial accounts. Each Reserve Account shall be
in the name of the Trustee, or shall be designated in a manner that reflects
that all monies on deposit therein are held in trust for the benefit of the
Trustee. The Trustee shall invest all funds on deposit in each Reserve
Account in Eligible Investments selected by the holders of a majority in
interest (by Percentage Interest) of the Class R Certificates, which shall
be subject to the maturity requirements and investment criteria of Eligible
Investments pursuant to Section 6.04(a). All such Eligible Investments shall
be made in the name of the Trustee. All net income and gain realized from
any such investments shall be added to the related Reserve Account. Each
Reserve Account is an asset of the REMIC and any amounts remaining in a
Reserve Account after all distributions have been made to the related Class
of Certificates will be distributed to the holders of the Class R
Certificates.
(b) No later than the close of business on each Deposit Date, after
giving effect to the distribution of the Available Distribution Amount
pursuant to Section 6.01(a), the Trustee shall, based on information in the
related Monthly Report, withdraw from each Reserve Account the amount of the
related Class Reserve Account Draw Amount, if any, for such Distribution
Date. Such monies will be applied on the Class M and Class B Certificates
pursuant to Section 6.01(a).
(c) On the Distribution Date on which the Principal Balance of the
related Class of Subordinate Certificates is reduced to zero (or the related
Reserve Account Requirement has been met), any monies on deposit in the
related Reserve Account (or any monies on deposit in such Reserve Account in
excess of the related Reserve Account Requirement), after giving effect to
any withdrawals therefrom made with respect to such Distribution Date, will
be deposited into the other Reserve Accounts based on the priority of the
related Classes of Subordinate Certificates, with any remaining amounts being
distributed to the Class R Certificateholders.
(d) On the final Distribution Date, after giving effect to all
distributions to Certificateholders to be made on the Certificates, any
amount remaining on deposit in each Reserve Account will be distributed to
the Class R Certificateholders in accordance with their respective Percentage
Interests.
Section 6.07. Transfer of Certificate Account, Reserve Fund and Reserve
---------------------------------------------------------
Accounts. The Trustee may transfer the Certificate Account, Reserve Fund and
- --------
any Reserve Account to a different depository institution from time to time,
so long as the Certificate Account, the Reserve Fund or any Reserve Account,
as the case may be, remains an Eligible Account. The Trustee shall give
notice of any transfer to the other parties hereto and to each Rating Agency
prior to such transfer.
ARTICLE SEVEN
REPORTS
Section 7.01. Monthly Reports. Not later than 1:00 p.m., Eastern
---------------
Standard Time, on each Determination Date, the Servicer shall cause the
Trustee to receive a "Monthly Report," which report shall include with
respect to the related Distribution Date and Due Period, (i) the information
described in Section 7.06(a)(i) through (a)(xi), (ii) the Class R
Distribution Amount, if any, (iii) the Average Sixty-Day Delinquency Ratio,
the Average Thirty-Day Delinquency Ratio and the Current Realized Loss Ratio,
(iv) the amount of Cumulative Realized Losses and (v) any additional
information required to permit the Trustee to make the distributions required
by Section 6.01(a). The Trustee shall not be under any duty to recalculate
or verify the information provided to it in any Monthly Report. The Servicer
shall provide copies of all Monthly Reports to each Rating Agency.
Section 7.02. Servicer's Certificate. Each Monthly Report shall be
----------------------
accompanied by a Servicer's Certificate, which shall, among other things,
certify the accuracy of the Monthly Report and that no Event of Default or
event that with notice or lapse of time or both would become an Event of
Default has occurred, or if such event has occurred and is continuing,
specify the event and its status.
Section 7.03. Other Data. Upon the receipt of a request therefor from
----------
the Trustee, the Servicer shall furnish the Trustee with such date regarding
the Contracts and the servicing thereof as may reasonably be requested.
Section 7.04. Annual Statement as to Compliance. The Servicer will
---------------------------------
deliver to the Depositor, the Trustee and each Rating Agency on or before
September 1 of each year, beginning with the first September 1 that occurs
at least three months after the Cut-off Date, an Officer's Certificate
stating, as to the signer thereof, that (i) a review of the activities of the
Servicer during the preceding calendar year (or since the Closing Date in the
case of the first such Officer's Certificate) and of performance under this
Agreement has been made under such officer's supervision and (ii) to the best
of such officer's knowledge, based on such review, the Servicer has fulfilled
all its obligations under this Agreement throughout such year (or since the
Closing Date in the case of the first such Officer's Certificate), 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.
Section 7.05. Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
On or before September 1 of each year, beginning with the first September 1
that occurs at least three months after the Cut-off Date, 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 to the Depositor, the Trustee and each Rating Agency to the
effect that such firm has examined certain documents and records relating to
the servicing of the Contracts under this Agreement and that, on the basis
of such examination conducted substantially in compliance with this Agreement
(or such other agreements) and generally accepted auditing standards, such
servicing has been conducted in compliance with this Agreement, except for
(i) such exceptions as such firm believes to be immaterial and (ii) such
other exceptions that, in the opinion of such firm, generally accepted
auditing standards require it to report. For purposes of such statement,
such firm may assume conclusively that all pooling and servicing agreements
among the Depositor, the Servicer and the Trustee relating to certificates
evidencing an interest in manufactured housing contracts are substantially
similar to one another except for any such pooling and servicing agreement
which by its terms specifically states otherwise.
Section 7.06. Statements to Certificateholders.
--------------------------------
(a) Concurrently with each distribution to Certificateholders pursuant
to Article Six, the Trustee shall mail, or cause the Paying Agent to mail,
to each Certificateholder at the address appearing on the Certificate
Register a statement as of the related Distribution Date and Due Period
prepared by the Servicer setting forth:
(i) the Distribution Amount with respect to each Class of
Certificates;
(ii) the amount of principal to be distributed to the Holders of
each Class of Certificates separately stating the amounts specified in
clauses (i) through (v) of the term "Formula Principal Distribution Amount"
and, with respect to each Class of Certificates, any Liquidation Loss
Interest Amount included in such distribution and any remaining Unpaid
Principal Shortfall, Liquidation Loss Amount and Liquidation Loss Interest
Shortfall after giving effect to such distribution;
(iii) the amount of interest to be distributed to the Holders
of each Class of Certificates (separately identifying any Unpaid Interest
Shortfall or Principal Shortfall included in the distribution with respect
to each such Class) and the Pass-Through Rate for each such Class of
Certificates for such Distribution Date;
(iv) the Principal Balance of each Class of Certificates and the
Adjusted Principal Balance of the Class M Certificates and each Class of
Class B Certificates, after giving effect to the payment of principal to be
made on such Distribution Date;
(v) the Reserve Fund Draw Amount, if any, or such Distribution
Date, the amount on deposit in the Reserve Fund, after giving effect to all
deposits therein or withdrawals therefrom made on or relating to such
Distribution Date;
(vi) the total amount of fees payable on such Distribution Date,
separately identifying the Monthly Servicing Fee, any reimbursement to the
Depositor pursuant to Section 8.06, and any Late Payment Fees, Extension Fees
and assumption fees (along with other additional servicing compensation
payable to the Servicer pursuant to Section 5.13) paid during such Due
Period;
(vii) the number of and aggregate unpaid principal balance of
Contracts with payments delinquent 30 to 59, 60 to 89 and 90 or more days,
respectively;
(viii) the number of Contracts that were repurchased by the
Seller pursuant to Section 3.05 during such Due Period, identifying such
Contracts and the aggregate Repurchase Price of such Contracts;
(ix) the Pool Factor for each Class of Certificates after giving
effect to the payment of principal to be made on such Distribution Date;
(x) the aggregate principal balances of all Contracts that are not
Liquidated Contracts and in respect of which the related Manufactured Homes
have been repossessed or foreclosed upon;
(xi) the Class B-1 Reserve Account Requirement, the Class B-2
Reserve Account Requirement and the Class M Reserve Account Requirement for
such Distribution Date; and
(xii) such other customary factual information as is available
to the Servicer as the Servicer deems necessary and can be obtained
reasonably from its existing data base to enable Certificateholders to
prepare their tax returns.
In the case of information furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount per Certificate
with a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
subject to the next sentence, but in no event later than 90 days after the
end of such year, the Servicer shall prepare and furnish to the Trustee, and
the Trustee, promptly upon receipt, shall furnish to each Person who at any
time during the calendar year was the Holder of a Certificate, a statement
containing the information set forth in clauses (ii) and (iii) above, in the
case of Class A, Class M and Class B Certificateholders, and (vi), (vii) and
(ix) above, in the case of Holders of Subordinated Certificates, aggregated
for such calendar year or applicable portion thereof during which such Person
was a Certificateholder. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Servicer pursuant to any requirements of the Code
as from time to time in force.
(b) If FCFC is not holder of the Class R Certificates, on each
Distribution Date the Servicer shall forward or cause to be forwarded by mail
to each holder of Class R Certificates (i) a copy of the report sent to
Certificateholders on such Distribution Date pursuant to Section 7.06(a) and
(ii) a statement setting forth the amount of the distribution to the holders
of the Class R Certificates, together with such other information as the
Servicer deems necessary or appropriate.
Within a reasonable period of time after the end of each calendar year,
the Servicer shall furnish or cause to be furnished to each Person who at any
time during the calendar year was a holder of Class R Certificates a
statement containing the applicable distribution information provided
pursuant to this Section aggregated for such calendar year or applicable
portion thereof during which such Person was a holder of the Class R
Certificates. Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer pursuant to any requirements of the Code as from
time to time enforced.
(c) A Certificateholder holding (or Certificate Owner owning beneficial
interests in) Certificates of a Class representing in the aggregate at least
5% of the Percentage Interest of such Class shall, upon written request to
the Trustee, be entitled to receive copies of all reports provided to the
Trustee.
Section 7.07. Annual Opinion of Counsel. Within 120 days after the
-------------------------
beginning of each calendar year, the Servicer shall furnish to the Trustee
an Opinion of Counsel that such actions have been taken with respect to the
maintenance of the Certificateholders' interests in the Trust Fund as
required by this Section 7.07.
ARTICLE EIGHT
INDEMNITIES; THE DEPOSITOR AND THE SERVICER
Section 8.01. Liabilities to Obligors. No liability to any Obligor
-----------------------
under any of the Contracts arising out of any act or omission to act of the
Servicer in servicing the Contracts prior to the Closing Date is intended to
be assumed by any other party hereto, or the Certificateholders under or as
a result of this Agreement and the transactions contemplated hereby and, to
the maximum extent permitted and valid under mandatory provisions of law,
each other party hereto and the Certificateholders expressly disclaim such
assumption.
Section 8.02. Tax Indemnification. The Seller agrees to pay, and to
-------------------
indemnify, defend and hold harmless the Trust Fund, the Trustee, the
Certificate Registrar, the Paying Agent and the Depositor and the
Certificateholders from any Taxes which may at any time be asserted with
respect to, and as of the date of, the transfer of the Contracts from the
Seller to the Depositor and from the Depositor to the Trust Fund, including,
without limitation, any sales, gross receipts, general corporation, personal
property, privilege or license Taxes (but not including any income or
franchise Taxes or federal, state or other Taxes arising out of the creation
of the Trust Fund and the issuance of the Certificates or distributions with
respect thereto) and costs, expenses and reasonable counsel fees in defending
against the same.
Section 8.03. Servicer's Indemnities. The Servicer shall defend and
----------------------
indemnify the Trust Fund, the Trustee, the Certificate Registrar, the Paying
Agent, the Depositor and the Certificateholders against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees
and expenses of counsel and expenses of litigation, arising from third party
claims or actions in respect of any action taken or failed to be taken by the
Servicer with respect to any Contract, Manufactured Home or Mortgaged
Property and any failure by the Servicer to perform its obligations in
compliance with this Agreement. This indemnity shall survive any Event of
Default (but the obligations of the Servicer under this Section shall not
relate to any actions of any subsequent Servicer after an Event of Default)
and any payment of the amount owing under, or any repurchase by the Seller
of, any such Contract.
Section 8.04. Operation of Indemnities. Indemnification under this
------------------------
Article shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Seller or the Servicer has made
any indemnity payments to the Trustee pursuant to this Article and the
Trustee thereafter collects any of such amounts from others, the Trustee will
repay such amounts collected to the Seller or the Servicer, as the case may
be, together with any interest collected thereon.
Section 8.05. Merger or Consolidation of the Depositor, the Seller or
-------------------------------------------------------
the Servicer. The Seller and the Servicer will each keep in full effect its
- -------------
existence, rights and franchises as a corporation, and will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity
and enforceability of this Agreement, the Certificates or any of the
Contracts and to perform its duties under this Agreement.
Any person into which the Depositor, the Seller or the Servicer may be
merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which any such entity shall be a party, or any
Person succeeding to the business of any such entity, shall be the successor
of the Depositor, the Seller or the Servicer, as the case may be, hereunder,
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; provided, however, that the successor or surviving Person
to the Servicer shall satisfy Section 8.08(a)(ii) with respect to the
qualifications of a successor to the Servicer. The Seller, the Depositor and
the Servicer shall promptly notify each Rating Agency of any such merger,
conversion or consolidation to which it is a party.
Section 8.06. Limitation on Liability of the Depositor and Others.
---------------------------------------------------
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Trustee or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Depositor or any such individual
against any liability that would otherwise be imposed by reason of its
willful misconduct, bad faith or negligence. The Depositor and any of its
directors, officers, employees or agents may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Depositor shall not be
under any obligation to appear in, prosecute or defend any legal action which
arises under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the parties hereto.
In such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities payable from the
Certificate Account and the Depositor shall be entitled to be reimbursed
therefor out of monies on deposit in the Certificate Account as provided by
Section 6.02(a)(vi); provided that such reimbursement shall be made, from
time to time on one or more Distribution Dates, only out of the Available
Distribution Amount that remains after the distributions to the
Certificateholders on such Distribution Date have been made.
Section 8.07. Assignment by Servicer. The Servicer may, with the prior
----------------------
written consent of the Depositor and notice to each Rating Agency, assign its
rights and delegate its duties and obligations under this Agreement; provided
that the Person accepting such assignment or delegation shall be a Person
which is satisfactory to the Trustee, in its sole and reasonable judgment,
and the Depositor, in its sole and reasonable judgment, is willing to service
the Contracts and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by the Servicer under this Agreement; provided further
that such assignment and delegation will not cause any Rating Agency to
qualify, downgrade or withdraw its then current rating of any Rated
Certificates, as evidenced by a letter from each Rating Agency.
Notwithstanding the foregoing, FCFC, as initial Servicer, may assign its
rights and delegate its duties and obligations under this Agreement to its
affiliate, Associates Housing Finance Services, Inc.; provided that such
assignment and delegation will not cause any Rating Agency to qualify,
downgrade or withdraw its then-current rating on any Class of Certificates
then outstanding. In the case of any such assignment and delegation, the
Servicer shall be released from its obligations under this Agreement, except
that the Servicer shall remain liable for all liabilities and obligations
incurred by it as Servicer hereunder prior to the satisfaction of the
conditions to such assignment and delegation set forth in the next preceding
sentence.
Section 8.08. Successor to the Servicer.
-------------------------
(a) In connection with the termination of the Servicer's
responsibilities and duties under this Agreement pursuant to Section 9.01,
the Trustee shall (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement (except
the duty to pay and indemnify the Trustee pursuant to Section 10.05), or (ii)
appoint a successor acceptable to the Depositor, which shall have a net worth
of not less than $50 million and shall have serviced for at least one year
prior to such appointment a portfolio of not less than $100 million aggregate
principal amount of manufactured housing installment sales contracts or
installment loans and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
prior to the termination of the Servicer's responsibilities, duties and
liabilities under this Agreement (except that the duty to pay and indemnify
the Trustee pursuant to Section 10.05 shall be subject to negotiation at the
time of such appointment). If the Trustee becomes the successor to the
Servicer in accordance with this Section, the Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, appoint
or petition a court of competent jurisdiction to appoint, a successor
satisfying the requirements set out in clause (ii) above. In connection with
any appointment of a successor Servicer, the Trustee may make such
arrangements for the compensation of such successor out of payments on
Contracts as it and such successor shall agree or such court shall determine;
provided, however, that no such compensation shall be in excess of a monthly
amount equal to 1/12 of the product of 1.25% and the Pool Balance for the
Distribution Date in respect of which such compensation is being paid without
the consent of all of the Certificateholders and notice to each Rating
Agency. If the Servicer's duties, responsibilities and liabilities under
this Agreement should be terminated pursuant to Section 8.07 or 9.01, the
Servicer shall discharge such duties and responsibilities during the period
from the date it acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement, shall cooperate with the Trustee
and any successor Servicer in effecting the termination of its
responsibilities and rights hereunder and shall take no action whatsoever
that might impair or prejudice the rights or financial condition of its
successor. The assignment by the Servicer pursuant to Section 8.07 or
removal of the Servicer pursuant to Section 9.01 shall not become effective
until a successor Servicer shall be appointed pursuant to this Section and
shall in no event relieve the Seller of liability pursuant to Sections 3.05
and 10.05.
(b) Any successor Servicer appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the Trustee an instrument
accepting such appointment, whereupon such successor Servicer shall become
fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if
originally named as a party to this Agreement and the Certificates. Any
assignment by or termination of the Servicer pursuant to Section 8.07 or 9.01
or the termination of this Agreement pursuant to Section 11.01 shall not
affect any claims that the Trustee may have against the Servicer arising
prior to any such termination or resignation.
The Servicer shall timely deliver to the successor Servicer the funds
in the Certificate Account and the Reserve Fund and all Contract Files,
Servicing Files and related documents and statements held by it hereunder and
the Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as reasonably may be required to more
fully and definitely vest and confirm in the successor Servicer all such
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer. Without limitation, the Trustee is authorized and empowered to
execute and deliver on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments (including, without
limitation, transfer instruments in respect of certificates of title and
financing statements relating to the Manufactured Homes), and to do any and
all acts or things necessary or appropriate to effect the purposes of such
notice of termination.
Upon a successor's acceptance of appointment as successor Servicer, the
Trustee shall notify in writing the Certificateholders of such appointment.
ARTICLE NINE
DEFAULT
Section 9.01. Events of Default. If any one or more of the following
-----------------
events (each, an "Event of Default") shall occur and be continuing:
(a) any failure by the Servicer to make any deposit or payment,
or to remit to the Trustee any payment, required to be made under the terms
of this Agreement which continues unremedied for a period of five days after
the date upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or the
Depositor or to the Servicer, the Trustee and the Depositor by the Holders
of Certificates evidencing Fractional Interests aggregating not less than
25%;
(b) failure on the part of the Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part
of the Servicer set forth in this Agreement which 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 the Depositor, or to the Servicer, the Trustee and the
Depositor by the Holders of Certificates evidencing Fractional Interests
aggregating not less than 25%;
(c) 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 trustee, 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,
shall have been entered against the Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 90 days;
(d) the Servicer shall consent to the appointment of a trustee,
conservator, 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
Servicer's property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its obligations or
take any corporate action in furtherance of any of the foregoing;
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Trustee may, and at the written direction of the
Holders of Certificates evidencing Fractional Interests aggregating not less
than 51% by notice in writing to the Servicer shall, terminate all the rights
and obligations of the Servicer under this Agreement and in, to and under the
Contracts and the proceeds thereof. The Trustee shall send a copy of any
such notice to each Rating Agency. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Contracts or otherwise, shall pass to
and be vested in the successor appointed pursuant to Section 8.08. Upon the
occurrence of an Event of Default which shall not have been remedied, the
Trustee may also pursue whatever rights it may have at law or in equity to
damages, including injunctive relief and specific performance. The Trustee
will have no obligation to take any action or institute, conduct or defend
any litigation under this Agreement at the request, order or direction of any
of the Holders of Certificates unless such Certificateholders have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which the Trustee may incur.
Section 9.02. Waiver of Defaults. The Trustee may waive any default
------------------
by the Servicer in the performance of its obligations hereunder and its
consequences, except that a default in the making of any required remittance
to the Trustee for distribution on any of the Certificates may be waived only
by the affected Certificateholders. Upon any such waiver of a past default,
such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so waived.
Section 9.03. Trustee to Act; Appointment of Successor. On and after
----------------------------------------
the time the Servicer receives a notice of termination pursuant to Section
9.01, the Trustee or an entity appointed pursuant to Section 8.08(a)(ii)
shall be the successor in all respects to the Servicer as provided in Section
8.08.
Section 9.04. Notification to Certificateholders.
----------------------------------
(a) Upon any such termination pursuant to Section 9.01, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within 60 days after the occurrence of any Event of Default known
to the Trustee, the Trustee shall transmit by mail to all Holders of
Certificates, notice of such Event of Default unless such Event of Default
shall have been cured or waived.
Section 9.05. Effect of Transfer.
------------------
(a) After a transfer of servicing duties to a successor Servicer
pursuant to Section 8.05, 8.07, 8.08 or 9.01, (i) the Trustee or such
successor Servicer may notify Obligors to make payments that are due under
the Contracts after the effective date of the transfer of servicing duties
directly to the successor Servicer and (ii) the replaced Servicer shall have
no further obligations with respect to the management, administration,
servicing or collection of the Contracts but, in the case of a transfer
pursuant to Section 8.08 or 9.01, shall remain liable for any liability of
the Servicer hereunder and shall remain entitled to any compensation due the
Servicer that had already accrued prior to such transfer.
(b) A transfer of servicing duties to a successor Servicer shall not
affect the rights and duties of the parties hereunder (including but not
limited to the indemnities of the Servicer pursuant to Article Eight) other
than those relating to the management, administration, servicing or
collection of the Contracts.
ARTICLE TEN
THE TRUSTEE
Section 10.01. Duties of Trustee. The Trustee, prior to the occurrence
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of an Event of Default and after the curing of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as
are set forth specifically in this Agreement. In case an Event of Default
has occurred (which has not been cured), the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and 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.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are required specifically to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the part
of the Trustee, the Trustee may rely conclusively, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) the Trustee shall not be liable personally for an error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable personally with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing
Fractional Interests aggregating not less than 25% as 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 this
Agreement.
Section 10.02. Certain Matters Affecting the Trustee. Except as
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otherwise provided in Section 10.01:
(a) the Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
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;
(b) the Trustee may consult with counsel and 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 Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon
the occurrence of an Event of Default (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, and to 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;
(d) the Trustee shall not be liable personally 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
this Agreement;
(e) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, 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 so to do by the Holders of
Certificates evidencing Fractional Interests aggregating not less than 25%;
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 is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to such proceeding, and the reasonable
expense of every such examination shall be paid by the Servicer, if an Event
of Default shall have occurred and is continuing, and otherwise by the
Certificateholders requesting the investigation;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys; and
(g) the Servicer shall deliver a power of attorney (the "Power of
Attorney") to the Trustee in connection with the execution and delivery of
this Agreement for the purpose of conferring upon the Trustee such authority
as it may need to perform the duties of Trustee expressly set forth herein;
no additional duties or obligations shall be conferred upon the Trustee by
its acceptance of the Power of Attorney.
Section 10.03. Trustee Not Liable for Certificates or Contracts. The
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recitals contained herein and in the Certificates (other than the certificate
of authentication of the Certificates) and in the Sale and Purchase Agreement
shall be taken as the statements of the Depositor, the Seller or the
Servicer, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to
the validity or sufficiency of this Agreement, the Certificates (other than
the certificate of authentication of the Certificates), the Sale and Purchase
Agreement or of any Contract or related document. The Trustee shall not be
accountable for the use or application by the Depositor, the Seller or the
Servicer of any of the Certificates or of the proceeds thereof, or for the
use or application of any funds paid to the Depositor, the Seller or the
Servicer in respect of the Contracts or deposited in or withdrawn from the
Certificate Account or the Reserve Fund by the Depositor, the Seller or the
Servicer.
Section 10.04. Trustee May Own Certificates. The Trustee in its
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individual 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 10.05. Servicer to Pay Fees and Expenses of Trustee. The
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Servicer covenants and agrees to pay, from its own funds, to the Trustee from
time to time, and the Trustee shall be entitled to, 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 trust hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Servicer will pay (out of its own funds (except at such times that the
Trustee is acting as successor Servicer hereunder)) or reimburse the Trustee,
to the extent requested by the Trustee, for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement and the reasonable compensation and
the expenses and disbursements of its counsel and of all persons not
regularly in its employ, and the expenses incurred by the Trustee in
connection with the appointment of an office or agency pursuant to Section
10.11, except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Servicer also covenants and agrees to indemnify
(out of its own funds (except at such times that the Trustee is acting as
successor Servicer hereunder)) the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee arising out of or in connection with the
acceptance or administration of the trust created by this Agreement and its
duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The covenants in this Section
shall be for the benefit of the Trustee in its capacity as Trustee, Paying
Agent and Certificate Registrar hereunder, and shall survive removal or
resignation of the Trustee or the termination of this Agreement.
Section 10.06. Eligibility Requirements for Trustee. There shall at
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all times be a Trustee hereunder which shall be either (i) Chase Manhattan
or any other Person into which Chase Manhattan is merged or consolidated or
to which substantially all of the properties and assets of Chase Manhattan
are transferred as an entirety, provided that such other Person has accepted
appointment as Trustee under this Agreement in accordance with Article Ten,
and that such entity is authorized to exercise corporate trust powers under
the laws of the United States or any State and has all necessary trust powers
to perform its obligations hereunder, or (ii) a corporation or banking
association organized and doing business under the laws of the United States
or any State authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50 million and subject to
supervision or examination by federal or state authority. If the corporation
or banking association referred to in clause (ii) above publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation or banking association
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 10.07. Resignation and Removal of the Trustee. The Trustee at
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any time may resign and be discharged from the trusts hereby created by
giving written notice thereof to the other parties hereto and each Rating
Agency. Upon receiving such notice of resignation, the Depositor promptly
shall appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the 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
Section 10.06 and shall fail to resign after written request therefor by the
Depositor, 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, then the Depositor may remove
the Trustee and appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee.
The Holders of Class A Certificates or, if the Class A Principal Balance
is zero, Class M and Class B Certificates, evidencing Percentage Interests
aggregating more than 50% of the Class A Certificates or the Class M and
Class B Certificates, voting together as a single class, as the case may be,
may remove the Trustee at any time and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Certificateholders
or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to this Section shall become effective upon acceptance of
appointment by the successor Trustee as provided in Section 10.08.
Section 10.08. Successor Trustee. Any successor Trustee appointed as
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provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor 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 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 Section 10.06.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Depositor shall mail notice of the succession of such
Trustee hereunder to all Certificateholders at their addresses as shown in
the Certificate Register, to the Servicer and to each Rating Agency. If the
Depositor 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 Depositor.
Section 10.09. Merger or Consolidation of Trustee. Any corporation
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into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 10.06, 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.
Section 10.10. Appointment of Co-Trustee or Separate Trustee.
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Notwithstanding any other provisions hereof, at any time, for the purpose of
(i) meeting any legal requirements of any jurisdiction in which any part of
the Trust Fund or property securing the same may be located at the time or
(ii) meeting any legal requirements with respect to the holding of the
Contracts or the Manufactured Homes, the Depositor and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee
or co-trustees, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Fund, and to vest in such Person
or Persons, in such capacity, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts, as the Depositor and the Trustee may
consider necessary or desirable. If the Depositor shall not have joined in
such appointment within 15 days after the receipt by it of a request so to
do, or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 10.06 and no notice to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 10.08.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section, 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 the law of any jurisdiction in which
any particular act or acts are to be performed or any regulation applicable
to any of the Contracts (whether as Trustee hereunder or as successor to the
Servicer hereunder), 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 Fund 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 this Agreement
and the conditions of this Article. 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 this Agreement, specifically including every provision of this
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, appoint 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 this
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.
Nothing in this Section shall relieve the Trustee of its duties,
obligations or liabilities under this Agreement.
Section 10.11. Appointment of Office or Agency. The Trustee will
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appoint an office or agency in the City of New York where Certificates may
be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office, for the purpose of keeping
the Certificate Register. The Certificate Register may be kept in an
electronic form capable of printing out a hard copy of the Certificate
Register. The Trustee will maintain an office at the address stated in
Section 12.10 where notices and demands to or upon the Trustee in respect of
the Certificates may be served. The Trustee will give prompt written notice
to Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
Section 10.12. REMIC Compliance. The parties intend that the Trust
----------------
Fund formed hereunder shall constitute, and that the affairs of the Trust
Fund shall be conducted so as to qualify it as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC
Provisions. In furtherance of such intention, the Trustee shall, to the
extent permitted by applicable law, act as agent, and is hereby appointed to
act as agent, of the Trust Fund and shall on behalf of the Trust Fund: (i)
prepare, file and present to the Trustee to sign, or cause to be prepared,
filed and presented to the Trustee to be signed, all required federal tax
returns for the Trust Fund, including, but not limited to, Form 1066 using
a calendar year as the taxable year for the Trust Fund when and as required
by the REMIC Provisions and other applicable federal income tax laws; (ii)
make an election, on behalf of the Trust Fund, to be treated as a REMIC on
Form 1066 for its first taxable year, in accordance with the REMIC
Provisions; (iii) cause to be prepared and forwarded to the
Certificateholders all information reports as and when required to be
provided to them in accordance with the REMIC Provisions; (iv) if the filing
or distribution of any documents of an administrative nature not addressed
in clauses (i) through (iii) above is then required by the REMIC Provisions
in order to maintain the status of the Trust Fund as a REMIC, prepare, file
and sign or distribute, or cause to be prepared and filed or distributed,
such documents with or to such persons when and as required by the REMIC
Provisions; and (v) conduct the affairs of the Trust Fund at all times that
any Certificates are outstanding so as to maintain the status of the Trust
Fund as a REMIC under the REMIC Provisions. Pursuant to Section 4.09(a), the
Servicer will serve as tax matters person for the Trust Fund pursuant to
Temporary Treasury Regulations Section 1.860F-4T(d) or serve as
attorney-in-fact and agent for any person that is the tax matters person if
the Servicer determines, in its discretion that it is not permitted under
applicable law to serve as the tax matters person. If the Trustee
determines, in its sole discretion, that it is not permitted by applicable
law to perform any of the duties in the preceding sentences, the Servicer
shall carry out such duties pursuant to the instructions of the Trustee and
shall be compensated for such services pursuant to Section 10.05. The
Servicer shall not knowingly or intentionally take any action (or knowingly
or intentionally direct the Trustee to take or omit to take any action) or
knowingly or intentionally omit to take any action (or knowingly or
intentionally omit to direct the Trustee to take any action) if such action
or omission (as the case may be) would cause the termination of the REMIC
status of the Trust Fund. The Depositor and the Servicer shall cooperate
with the Trustee or its agent for such purpose in supplying any information
within their control (other than any confidential information) that is
necessary to enable the Trustee to perform its duties under this Section.
In the event that any Tax is imposed on the Trust Fund, such Tax shall
be charged against amounts otherwise required to be distributed to the
Holders of the Class R Certificates or against the Person causing the event
to occur which resulted in the imposition of such tax. The Trustee is hereby
authorized to retain, or cause the Paying Agent to retain, from amounts
otherwise required to be distributed to the Holders of the Class R
Certificates sufficient funds to pay or provide for the payment of, and to
actually pay, or cause the Paying Agent to pay, such Tax as is legally owed
by the Trust Fund (but such authorization shall not prevent the Trustee from
contesting any such Tax in appropriate proceedings, and withholding payment
of such Tax, if permitted by law, pending the outcome of such proceedings).
To the extent that sufficient amounts cannot be so retained to pay or provide
for the payment of any tax imposed on gain realized from any prohibited
transaction (as defined in the REMIC Provisions), the Trustee is hereby
authorized to and, upon the receipt of written notice of the existence of any
tax liability, shall segregate, into a separate non-interest-bearing account,
the net income from such prohibited transactions and pay, or cause the Paying
Agent to pay, such Tax. In the event any (i) amounts initially retained from
amounts required to be distributed to the Holders of the Class R Certificates
and (ii) income so segregated and applied towards the payment of such Tax
shall not be sufficient to pay such Tax in its entirety, the amount of the
shortfall shall be paid from funds in the Certificate Account,
notwithstanding anything to the contrary contained herein. To the extent any
such segregated income or funds from the Certificate Account are paid to the
Internal Revenue Service, the Trustee shall retain, or cause to be retained,
an amount equal to the amount of such income or funds so paid from future
amounts otherwise required to be distributed to the Holders of the Class R
Certificates and shall deposit such retained amounts in the Certificate
Account for distribution to the Holders of Certificates other than the
Class R Certificate.
Except as provided in Section 3.05, the Trustee shall not sell any
Contract or any other asset of the Trust Fund unless either (i) it has
received an Opinion of Counsel to the effect that such sale will not result
in the imposition of Taxes on "prohibited transactions" on the Trust Fund as
defined in Section 860F of the Code or (ii) the proceeds of such sale, net
of any related Taxes on "prohibited transactions" on the Trust Fund as
defined in Section 860F of the Code, will at least equal the Repurchase Price
of such Contract.
ARTICLE ELEVEN
TERMINATION
Section 11.01. Termination.
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(a) The respective obligations and responsibilities of the Seller, the
Depositor, the Servicer (except as to Section 10.05) and the Trustee shall
terminate upon the earliest to occur of: (i) the later of the final payment
or other liquidation (or any advance with respect thereto) of the last
Contract or the disposition of all property acquired upon repossession of any
Contract and the remittance of all funds due hereunder; (ii) at the option
of the Depositor or the Servicer, on any Distribution Date after the first
Distribution Date as of which the Pool Balance is less than 10% of the Cut-
off Date Pool Balance, upon the purchase of the Contracts at a price equal
to the greater of (A) the sum of (1) 100% of the unpaid principal balance of
each Contract (other than any Contract as to which the related Manufactured
Home has been repossessed and not yet disposed of and whose fair market value
is included pursuant to clause (2) below) as of the final Distribution Date,
and (2) the fair market value of such acquired property (as determined by the
Depositor or the Servicer, as the case may be, as of the close of business
on the third Business Day next preceding the date upon which notice of any
such termination is furnished to Certificateholders pursuant to this
Section), and (B) the aggregate fair market value (as determined by the
Depositor or the Servicer, as the case may be, as of the close of business
on such third Business Day) of all of the assets of the Trust Fund, plus, in
the case of both clause (A) and (B), any Unpaid Interest Shortfall and
Liquidation Loss Interest Amount with respect to any Class of Certificates,
together with one month's interest at the applicable Contract Rate on the
Contract Principal Balance of each Contract (including any Contract as to
which the related Manufactured Home has been repossessed or foreclosed upon
and not yet disposed of); or (iii) the sale by the Trustee of all Contracts
pursuant to Section 11.02. Notwithstanding the foregoing, in no event shall
the trust created hereby continue beyond the expiration of 21 years from 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, living on the date
hereof. Notwithstanding the foregoing, the option specified in clause (ii)
above shall not be exercisable if there will not be distributed to the
Holders of Certificates of each Class an amount equal to the Principal
Balance of such Class of Certificates, together with one month's interest on
such Principal Balance at the related Pass-Through Rate and any Unpaid
Interest Shortfall or Liquidation Loss Interest Amount with respect to such
Class. The Servicer shall have the prior right to exercise the option to
purchase the Contracts pursuant to clause (ii) above if both the Depositor
and the Servicer desire to exercise such option.
(b) Notice of any termination, specifying the Distribution Date upon
which all Certificateholders may surrender their Certificates to the Trustee
for payment and cancellation, shall be given promptly by the Servicer (if the
Depositor is exercising the option given it in Section 11.01(a), upon
direction by the Depositor given ten days prior to the date such notice is
to be mailed) by letter to Certificateholders, the Trustee and each Rating
Agency mailed no later than the 15th day of the month preceding the month of
such final distribution specifying (i) the Distribution Date upon which final
payment on the Certificates will be made upon presentation and surrender of
Certificates at the office or agency of the Trustee therein designated, (ii)
the amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date will not be applicable, payments being
made only upon presentation and surrender of the Certificates at the office
or agency of the Trustee therein specified. After giving such notice, the
Certificate Registrar shall not register the transfer or exchange of any
Certificates. If such notice is given in connection with the Depositor's or
the Servicer's election to purchase, the Depositor or the Servicer shall
deposit in the Certificate Account on the Business Day prior to the
applicable Distribution Date the amount described in Section 11.01(a)(ii).
Upon presentation and surrender of the Certificates, the Trustee shall cause
to be distributed, from funds in the Certificate Account, to Holders of
Certificates of each Class, in proportion to their respective Percentage
Interests, an amount equal to the Principal Balance of such Class of
Certificates, together with one month's interest on such Principal Balance
at the related Pass-Through Rate and any Unpaid Interest Shortfall or
Liquidation Loss Interest Amount with respect to such Class. Upon such
termination, any amounts remaining in the Certificate Account (other than
amounts retained to meet claims) shall be paid to the Holders of the Class
R Certificates. Following such final deposit the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer. The distribution on the final Distribution Date shall be in lieu
of the distribution otherwise required to be made on such Distribution Date
in respect of the Certificates. Any amounts retained in the Certificate
Account that are owed to Certificateholders which have not surrendered their
Certificates as of the final Distribution Date shall be withdrawn from the
Certificate Account and held in an escrow account with the Trustee pending
distribution pursuant to Section 11.01(c).
(c) If all of the Certificateholders have not surrendered their
Certificates for cancellation within three months after the time specified
in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within two years after the second notice all Certificates shall
not have been surrendered for cancellation, the Trustee shall so notify the
Depositor and the Depositor may take appropriate steps, or may appoint an
agent to take appropriate and reasonable steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of, and only to the extent of, the funds and other
assets which remain in trust hereunder.
(d) Upon any termination pursuant to the exercise of the purchase
option contained in Section 11.01(a)(ii) or otherwise, the Trust Fund shall
be terminated in accordance with the following additional requirements,
unless the Trustee has received an Opinion of Counsel to the effect that the
failure of the Trust Fund to comply with the requirements of this Section
will not (i) result in the imposition of Taxes on "prohibited transactions"
of the Trust Fund as described in Section 860F of the Code, or (ii) cause the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding:
(i) within 90 days prior to the final Distribution Date set forth
in the notice given by the Servicer or the Trustee under this Section, the
Holders of the Class R Certificates shall adopt a plan of complete
liquidation of the Trust Fund; and
(ii) at or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Servicer, as
agent of the Trustee, shall sell all of the assets of the Trust Fund to the
Depositor or the Servicer, as the case may be, for cash.
By its acceptance of each Class R Certificate, the Holder thereof hereby
agrees to adopt such a plan of complete liquidation upon the written request
of the Servicer or the Depositor and to take such other action in connection
therewith as may be reasonably requested by the Depositor.
Section 11.02. Auction Call.
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(a) If neither the Depositor nor the Servicer exercises its right
described in Section 11.01(a)(ii) within 90 days after the Distribution Date
on which they are first entitled to do so, the Trustee shall use commercially
reasonable efforts to solicit bids for the purchase of all Contracts and
other property of the Trust Fund from no fewer than two prospective
purchasers that it believes to be Qualified Bidders. If FCFC is then the
Servicer, the solicitation of bids shall be conditioned upon its continuing
as servicer of the Contracts on terms and conditions substantially similar
to those set forth in this Agreement.
(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 the Contracts and other property of the Trust 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 pursuant to Section 6.01. Any such sale must
also comply with the requirements of the second to the last sentence of
Section 11.01(a) and Section 11.01(b).
(c) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by
Section 11.01(b) shall be deducted from the bid price of the Contracts and
other property of the Trust in determining the net proceeds therefrom.
(d) If the Trustee does not obtain bids from at least two Qualified
Bidders, or does not receive a bid such that the net proceeds therefrom would
at least equal the Termination Price, it shall not sell the Contracts and
other property of the Trust, 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.
ARTICLE TWELVE
MISCELLANEOUS PROVISIONS
Section 12.01. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this 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 and in no way shall affect the validity or
enforceability of the other covenants, agreements, provisions or terms of
this Agreement or of the Certificates or the rights of the Holders.
Section 12.02. Limitation on Rights of Certificateholders. The death
------------------------------------------
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor 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 Fund, nor
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 herein) or in any manner otherwise control the operation and
management of the Trust Fund, 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 this Agreement pursuant to any provision
hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this 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 of a Class evidencing, as to such Class, Percentage
Interests aggregating not less than 25% shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder 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 60 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 being
understood and intended, and being covenanted expressly 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 this 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 this Agreement. 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 12.03. Acts of Certificateholders.
--------------------------
(a) Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver
or other action is required hereunder, such approval, authorization,
direction, notice, consent, waiver or other action shall be deemed to have
been given or taken on behalf of, and shall be binding upon, all
Certificateholders if agreed to by Holders of Certificates of the specified
Class or Classes evidencing, as to each such Class, Percentage Interests
aggregating 51% or more.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders
in person or by an agent duly appointed in writing; and except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where required,
to the Servicer. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Servicer and the
Depositor if made in the manner provided in this Section.
(c) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(d) The ownership of Certificates shall be proved by the Certificate
Registrar.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be
done by the Trustee or the Servicer in reliance thereon, whether or not
notation of such action is made upon such security.
(f) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
Section 12.04. Calculations. Except as otherwise provided in this
------------
Agreement, all interest rate and basis point calculations under this
Agreement will be made on the basis of a 360-day year and twelve 30-day
months and will be carried out to at least three decimal places.
Section 12.05. Amendment. This Agreement may be amended from time to
---------
time by the parties hereto without consent of any Certificateholders, (i) to
cure any ambiguity or to correct or supplement any provisions herein which
may be inconsistent with any other provisions herein, (ii) to add to the
duties or obligations of the Servicer hereunder, (iii) to obtain a rating by
a nationally recognized rating agency or to maintain or improve the then-
current rating of any Class of Certificates (it being understood that none
of the Trustee, the Depositor, the Seller or the Servicer is obligated to
obtain, maintain or improve any rating of any Class of Certificates after the
Closing Date), (iv) to amend the Class B Principal Distribution Tests or the
calculation of the Average Sixty-Day Delinquency Ratio, the Average Thirty-
Day Delinquency Ratio, Cumulative Realized Losses, Current Realized Loss
Ratio, Sixty-Day Delinquency Ratio or the Thirty-Day Delinquency Ratio or (v)
to make any other provisions with respect to matters or questions arising
under this Agreement which shall not be materially inconsistent with the
provisions of this Agreement, including without limitation provisions
relating to the issuance of definitive Certificates to Certificate Owners
provided that book-entry registration of the Certificates is no longer per-
mitted; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests
of any Certificateholder (including, without limitation, the maintenance of
the status of the Trust Fund as a REMIC under the Code).
This Agreement may also be amended from time to time by the parties
hereto without consent of the Certificateholders, to modify, eliminate or add
to the provisions of this Agreement to such extent as shall be necessary to
(i) maintain the qualification of the Trust Fund as a REMIC under the Code
or avoid, or minimize the risk of, the imposition of any Tax on the Trust
Fund under the Code that would be a claim against the Trust Fund's assets,
or (ii) prevent the Trust Fund from entering into any "prohibited
transaction" as defined in Section 860F of the Code; provided that in either
such case, (a) there shall have been delivered to the Trustee an Opinion of
Counsel to the effect that such action is necessary or appropriate to
maintain such qualification or avoid any such Tax or minimize the risk of its
imposition or prevent the Trust Fund from entering into such prohibited
transaction, as the case may be, and (b) such amendment shall not adversely
affect in any material respect the interests of any Certificateholder.
This Agreement also may be amended from time to time by the parties
hereto with the consent of the Holders of each Class of Certificates affected
thereby evidencing, as to each such Class, Percentage Interests aggregating
not less than 66%, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, distributions which are required to be made on any
Certificate without the consent of the Holder of such Certificate, (ii)
reduce the aforesaid percentage of Certificates, the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all such Certificates then outstanding or (iii) adversely affect the
status of the Trust Fund as a REMIC or cause a tax to be imposed on the Trust
Fund under the REMIC Provisions.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and the Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 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.
Section 12.06. Recordation of Agreement. To the extent permitted by
------------------------
applicable law, this 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 properties subject to the
Contracts are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer at its expense
with the consent of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the
interests of the Certificateholders or is necessary for the administration
or servicing of the Contracts.
Section 12.07. Certificates Nonassessable and Fully Paid. The
-----------------------------------------
interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and upon
authentication of a Certificate by the Trustee or its Authenticating Agent,
such Certificate shall be deemed fully paid.
Section 12.08. No Petition. Each of the Seller, the Servicer and the
-----------
Trustee covenants and agrees that prior to the date which is one year and one
day after the date upon which the last Class of Certificates has been paid
in full, it will not institute against, or join any other Person in
instituting against the Depositor any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under
any federal or state bankruptcy or similar law. This Section shall survive
termination of this Agreement or the termination of the Servicer or the
Trustee, as the case may be, under this Agreement.
SECTION 12.09. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 12.10. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, or telecopied (with transmission confirmed by
telephone) to, or mailed by first class or registered mail, postage prepaid,
to in the case of (i) the Depositor, CS First Boston Mortgage Securities
Corp., c/o CS First Boston Corporation, 55 East 52nd Street, New York, New
York 10055, Attention: _______________; (ii) the Servicer, Ford Consumer
Finance Company, Inc., 300 East Carpenter Freeway, Irving, Texas 75062-2726,
Attention: Treasurer; (iii) the Trustee, The Chase Manhattan Bank, 450 West
33rd Street, New York, New York 10001, Attention: Global Trust Services;
(iv) Moody's, 99 Church Street, New York, New York 10004, Attention: Asset
Backed Monitoring; (v) Standard & Poor's, 25 Broadway, New York, New York
10004, Attention: Consumer Asset Backed Surveillance Group; or (vi) Fitch,
One State Street Plaza, New York, New York 10004, Attention: Residential
Mortgage Group; or in any such case at such other address specified in
writing to each other entity listed in this Section.
Section 12.11. Merger and Integration of Documents. Except as
-----------------------------------
specifically stated otherwise herein, this Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except
as provided herein.
Section 12.12. Headings. The headings herein and Table of Contents are
--------
for purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
Section 12.13. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CS FIRST BOSTON MORTGAGE SECURITIES
CORP., as Depositor
By:
-----------------------------------
Name:
Title:
FORD CONSUMER FINANCE COMPANY,
INC., as Seller and Servicer
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Trustee
By:
----------------------------------
Name:
Title:
State of New York )
) ss.:
County of New York )
On the 27th day of September 1996 before me, a notary public in and for
said State, personally appeared ___________________________ , known to me to
be ______________ of CS First Boston Mortgage Securities Corp., one of the
corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
(Notarial Seal)
State of ______________ )
) ss.:
County of _____________ )
On the 27th day of September 1996 before me, a notary public in and for
said State, personally appeared, known to me to be a Senior Vice President
of Ford Consumer Finance Company, Inc., one of the corporations that executed
the within instrument, and also known to me to be the person who executed it
on behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------------
Notary Public
(Notarial Seal)
State of New York )
) ss.:
County of New York )
On the 27th day of September 1996 before me, a notary public in and for
said State, personally appeared _________________, known to me to be a Trust
Officer of The Chase Manhattan Bank, the New York banking corporation that
executed the within instrument, and also known to be the person who executed
it on behalf of said national association, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------------
Notary Public
(Notarial Seal)
EXHIBIT A
Contract Schedule
EXHIBIT B
Form of Face of Class A Certificate
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS SEPTEMBER __,
1996. THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ___%.
ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE ON THE CONTRACTS UNDERLYING THE
CERTIFICATES AT A CONSTANT ANNUAL PREPAYMENT RATE OF __% OF THE PREPAYMENT
MODEL, THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_________ OF OID
PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ___% AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT ACCRUAL PERIOD IS NO MORE
THAN $_______ PER $1,000 OF INITIAL PRINCIPAL AMOUNT, CALCULATED UNDER THE
EXACT METHOD. NO REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL
PAYMENTS WILL BE MADE ON THE CONTRACTS.
Number __________ Class A-(1)(2)(3)(4)(5)
Date of Pooling and Original Denomination:
Servicing Agreement and $____________________
Cut-off Date: September 1,
1996 Initial Class A-__
Principal Balance:
Class A-_ Pass-Through Rate: $____________________
____%
Distribution Date after
First Distribution Date: Latest Due Date: ________,
October 15, 1996 ____
CUSIP ________________
ASSOCIATES MANUFACTURED HOUSING CONTRACT
PASS-THROUGH CERTIFICATE,
SERIES 1996-1, CLASS A
evidencing a percentage interest in any distributions
allocable to the Class A Certificates with respect to a pool of fixed
rate conventional manufactured housing installment sales contracts
and installment loans formed and sold by
CS FIRST BOSTON MORTGAGE SECURITIES CORP.,
which manufactured housing installment sales contracts and installment loans
either were originated or acquired by and are initially serviced by Ford
Consumer Finance Company, Inc. (the "Seller" and the "Servicer").
This Certificate does not represent an obligation of or interest in CS
First Boston Mortgage Securities Corp., the Seller, the Servicer, the Trustee
referred to below or any of their respective affiliates.
Neither this Certificate nor the underlying manufactured housing
contracts and loans are guaranteed or insured by CS First Boston Mortgage
Securities Corp., the Seller, the Servicer, the Trustee, any of their
respective affiliates or by any governmental agency or instrumentality.
THE PORTION OF THE INITIAL CLASS A-__ PRINCIPAL BALANCE EVIDENCED BY
THIS CERTIFICATE (THE "CERTIFICATE BALANCE") WILL BE REDUCED BY DISTRIBUTIONS
ON THIS CERTIFICATE THAT ARE ALLOCABLE TO PRINCIPAL. ACCORDINGLY, FOLLOWING
THE INITIAL ISSUANCE OF THIS CERTIFICATE, THE CERTIFICATE BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN ABOVE.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE
BALANCE BY INQUIRY OF THE TRUSTEE.
This certifies that ___________________ is the registered owner of an
undivided interest in certain monthly distributions with respect to a pool
(the "Contract Pool") of conventional manufactured housing installment sales
contracts and installment loan agreements (collectively, the "Contracts")
formed and sold, together with certain other property (collectively, the
"Trust Fund"), by CS First Boston Mortgage Securities Corp. (the
"Depositor"). The Contracts either were originated or acquired by and are
serviced by Ford Consumer Finance Company, Inc. (the "Seller" and the
"Servicer") and are secured by Manufactured Homes. The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the date
specified above (the "Agreement"), among the Depositor, the Seller, the
Servicer and The Chase Manhattan Bank, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Associates Manufactured Housing Contract Pass-Through
Certificates, Series 1996-1 (the "Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
On each Distribution Date, to the extent described in the Agreement, the
Trustee will cause to be distributed from funds in the Certificate Account
to each Class A Certificateholder an amount equal to the product of the
Percentage Interest evidenced by such Class A Certificateholder's Certificate
and the Class A-__ Distribution Amount to be distributed to such Class of
Class A Certificates.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class A
Certificates with original denominations aggregating at least $5 million who
have given the Trustee written instructions at least five Business Days prior
to the related Record Date. Notwithstanding the foregoing, 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 appointed by the Trustee for that
purpose and specified in such notice of final distribution.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company 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 such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:THE CHASE MANHATTAN BANK
By:
---------------------------------------
Authorized Officer
(Form of Certificate of Authentication)
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: By: THE CHASE MANHATTAN BANK,
---------------------------------- as Trustee
Authenticating Agent
or
----------------------------------- ----------------------------
Authorized Signatory Authorized Signatory
EXHIBIT C
Form of Face of Class B Certificate
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS SEPTEMBER __,
1996. THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ___%.
ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE ON THE CONTRACTS UNDERLYING THE
CERTIFICATES AT A CONSTANT ANNUAL PREPAYMENT RATE OF __% OF THE PREPAYMENT
MODEL, THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_________ OF OID
PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ___% AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT ACCRUAL PERIOD IS NO MORE
THAN $_______ PER $1,000 OF INITIAL PRINCIPAL AMOUNT, CALCULATED UNDER THE
EXACT METHOD. NO REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL
PAYMENTS WILL BE MADE ON THE CONTRACTS.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE DELIVERS A REPRESENTATION LETTER TO THE TRUSTEE TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR, IF THE PURCHASER IS AN INSURANCE
COMPANY, THAT THE PURCHASER IS AN INSURANCE COMPANY WHICH IS PURCHASING SUCH
CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT"
(AS SUCH TERM IS DEFINED IN SECTION V(e) OF PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60 OR DELIVERS TO THE TRUSTEE AN
OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN,
ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE
BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Number __________ Class B-(1)(2)
Date of Pooling and Original Denomination:
Servicing Agreement and $____________________
Cut-off Date: September 1,
1996 Initial Class B-(1)(2)
Principal Balance:
Class B-(1)(2) Pass-Through $____________________
Rate: ____%
Distribution Date after
First Distribution Date: Latest Due Date: ______,
October 15, 1996 ____
CUSIP ________________
ASSOCIATES MANUFACTURED HOUSING CONTRACT
PASS-THROUGH CERTIFICATE,
SERIES 1996-1, CLASS B-(1)(2)
evidencing a percentage interest in any distributions allocable
to the Class B Certificates with respect to a pool of fixed rate conventional
manufactured housing installment sales contracts and installment loans formed
and sold by
CS FIRST BOSTON MORTGAGE SECURITIES CORP.,
which manufactured housing installment sales contracts and installment loans
either were originated or acquired by and are initially serviced by Ford
Consumer Finance Company, Inc. (the "Seller" and the "Servicer").
This Certificate does not represent an obligation of or interest in CS
First Boston Mortgage Securities Corp., the Seller, the Servicer, the Trustee
referred to below or any of their respective affiliates.
Neither this Certificate nor the underlying manufactured housing
contracts and loans are guaranteed or insured by CS First Boston Mortgage
Securities Corp., the Seller, the Servicer, the Trustee, any of their
respective affiliates or by any governmental agency or instrumentality.
THE PORTION OF THE INITIAL CLASS B-(1)(2) PRINCIPAL BALANCE EVIDENCED
BY THIS CERTIFICATE (THE "CERTIFICATE BALANCE") WILL BE REDUCED BY
DISTRIBUTIONS ON THIS CERTIFICATE THAT ARE ALLOCABLE TO PRINCIPAL.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THIS CERTIFICATE, THE
CERTIFICATE BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL
DENOMINATION SHOWN ABOVE.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE
BALANCE BY INQUIRY OF THE TRUSTEE.
This certifies that ___________________ is the registered owner of an
undivided interest in certain monthly distributions with respect to a pool
(the "Contract Pool") of conventional manufactured housing installment sales
contracts and installment loan agreements (collectively, the "Contracts")
formed and sold, together with certain other property (collectively, the
"Trust Fund"), by CS First Boston Mortgage Securities Corp. (the
"Depositor"). The Contracts either were originated or acquired by and are
serviced by Ford Consumer Finance Company, Inc. (the "Seller" and the
"Servicer") and are secured by Manufactured Homes. The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the date
specified above (the "Agreement"), among the Depositor, the Seller, the
Servicer and The Chase Manhattan Bank, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Associates Manufactured Housing Contract Pass-Through
Certificates, Series 1996-1 (the "Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
On each Distribution Date, to the extent described in the Agreement, the
Trustee will cause to be distributed from funds in the Certificate Account
to each Class B Certificateholder an amount equal to the product of the
Percentage Interest evidenced by such Class B Certificateholder's Certificate
and the Class B-(1)(2) Distribution Amount. Payments in respect of the Class
B Certificates are subordinated to payments in respect of the Class A
Certificates and the Class M Certificates and payments in respect of the
Class B-2 Certificates are subordinated to payments in respect of the Class
B-1 Certificates, in each case to the extent specified in the Agreement.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class B
Certificates with original denominations aggregating at least $5 million who
have given the Trustee written instructions at least five Business Days prior
to the related Record Date. Notwithstanding the foregoing, 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 appointed by the Trustee for that
purpose and specified in such notice of final distribution.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company 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 such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: THE CHASE MANHATTAN BANK
By:
--------------------------------
Authorized Officer
(Form of Certificate of Authentication)
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: By: THE CHASE MANHATTAN BANK,
------------------------------ as Trustee
Authenticating Agent
or
------------------------------ -----------------------------
Authorized Signatory Authorized Signatory
EXHIBIT D
Form of Reverse of Class A and Class B Certificates
As provided in the Agreement, deductions and withdrawals from the
Certificate Account will be made from time to time for purposes other than
distributions to Certificateholders, such purposes including payment of the
Monthly Servicing Fee, reimbursement to the Servicer for certain expenses
incurred by it and reimbursement to the Servicer for previous Advances with
respect to certain delinquent payments on the Contracts.
The Trustee will cause to be kept at its Corporate Trust Office in New
York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee will provide for the registration of Certificates and
of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Trustee
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate dated the date of
authentication by the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the person in whose name any
Certificate is registered as the owner of such Certificate and the Percentage
Interest in the Trust Fund evidenced thereby for the purpose of receiving
distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity or to correct or supplement any
provisions therein which may be inconsistent with any other provisions
therein, (ii) to add to the duties or obligations of the Servicer under the
Agreement, (iii) to obtain a rating by a nationally recognized rating agency
or to maintain or improve the rating of any Class of Certificates then given
by a rating agency (it being understood that none of the Trustee, the
Depositor, the Seller or the Servicer is obligated to obtain, maintain or
improve any rating of any Class of Certificates after the Closing Date), (iv)
to amend certain tests or definitions or to make any other provisions with
respect to matters or questions arising under the Agreement which are not
materially inconsistent with the provisions of the Agreement, including
without limitation, provisions relating to the issuance of definitive
Certificates to Certificate Owners provided that book-entry registration of
Book-Entry Certificates is no longer permitted; provided, however, that any
such amendment shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder
(including, without limitation, the maintenance of the status of the Trust
Fund as a REMIC under the Code). The Agreement may also be amended from time
to time by the Depositor, the Servicer and the Trustee, without consent of
the Certificateholders, to modify, eliminate or add to the provisions of the
Agreement to such extent as shall be necessary to maintain the qualification
of the Trust Fund as a REMIC under the Code or avoid, or minimize the risk
of, the imposition of any Tax on the Trust Fund, unless certain conditions
in the Agreement have been complied with, or to prevent the Trust Fund from
entering into certain prohibited transactions under the Code, provided that
such amendment shall not adversely affect in any material respect the
interests of any Certificateholder and there shall have been delivered to the
Trustee an Opinion of Counsel to the effect that such action is necessary or
appropriate for such purposes.
The Agreement may also be amended from time to time by the Depositor,
the Seller, the Servicer and the Trustee with the consent of the Holders of
Certificates of each Class affected thereby evidencing, as to each such
Class, Percentage Interests aggregating not less than 66%, for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment may
(i) reduce in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (ii) reduce the aforesaid percentage of
Certificates of a Class the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates of
such Class then outstanding or (iii) adversely affect the status of the Trust
Fund as a REMIC or cause a Tax to be imposed on the Trust Fund under the
REMIC provisions.
The respective obligations and responsibilities of the Depositor, the
Seller, the Servicer and the Trustee under the Agreement will terminate upon:
(i) the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Contract or the disposition of all property
acquired upon repossession of any Contract and the remittance of all funds
due thereunder, (ii) at the option of the Depositor or the Servicer, on any
Distribution Date after the first Distribution Date on which the Pool Balance
was less than 10% of the Cut-off Date Pool Balance, so long as the Depositor
or the Servicer, as the case may be, deposits in the Certificate Account the
repurchase price specified in the Agreement or (iii) upon the sale of the
Contracts and other property of the Trust Fund by the Trustee if neither the
Depositor nor the Servicer exercises the option in clause (ii) within 90 days
after the Distribution Date on which they are first entitled to do so, as
specified in the Agreement.
EXHIBIT E
Form of Class M Certificate
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS SEPTEMBER __,
1996. THE INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ___%.
ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE ON THE CONTRACTS UNDERLYING THE
CERTIFICATES AT A CONSTANT ANNUAL PREPAYMENT RATE OF __% OF THE PREPAYMENT
MODEL, THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_________ OF OID
PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ___% AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT ACCRUAL PERIOD IS NO MORE
THAN $_______ PER $1,000 OF INITIAL PRINCIPAL AMOUNT, CALCULATED UNDER THE
EXACT METHOD. NO REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL
PAYMENTS WILL BE MADE ON THE CONTRACTS.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE DELIVERS A REPRESENTATION LETTER TO THE TRUSTEE TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR, IF THE PURCHASER IS AN INSURANCE
COMPANY, THAT THE PURCHASER IS AN INSURANCE COMPANY WHICH IS PURCHASING SUCH
CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT"
(AS SUCH TERM IS DEFINED IN SECTION V(e) OF PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60 OR DELIVERS TO THE TRUSTEE AN
OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN,
ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE
BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Number __________ Class M
Date of Pooling and Original Denomination:
Servicing Agreement and $____________________
Cut-off Date: September 1, 1996
Initial Class M Principal Balance:
Class M Pass-Through Rate: lesser of ___%, $____________________
computed on the
basis of a 360-day year of twelve 30 day Distribution Date after
months, or the Latest Due Date: ________, ____
Weighted Average Net Contract Rate
CUSIP ________________
First Distribution Date: October 15, 1996
ASSOCIATES MANUFACTURED HOUSING CONTRACT
PASS-THROUGH CERTIFICATE,
SERIES 1996-1, CLASS M
evidencing a percentage interest in any distributions allocable
to the Class M Certificates with respect to a pool of fixed rate conventional
manufactured housing installment sales contracts and installment loans formed
and sold by
CS FIRST BOSTON MORTGAGE SECURITIES CORP.,
which manufactured housing installment sales contracts and installment loans
either were originated or acquired by and are initially serviced by Ford
Consumer Finance Company, Inc. (the "Seller" and the "Servicer").
This Certificate does not represent an obligation of or interest in CS
First Boston Mortgage Securities Corp., the Seller, the Servicer, the Trustee
referred to below or any of their respective affiliates.
Neither this Certificate nor the underlying manufactured housing
contracts and loans are guaranteed or insured by CS First Boston Mortgage
Securities Corp., the Seller, the Servicer, the Trustee, any of their
respective affiliates or by any governmental agency or instrumentality.
THE PORTION OF THE INITIAL CLASS M PRINCIPAL BALANCE EVIDENCED BY THIS
CERTIFICATE (THE "CERTIFICATE BALANCE") WILL BE REDUCED BY DISTRIBUTIONS ON
THIS CERTIFICATE THAT ARE ALLOCABLE TO PRINCIPAL. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THIS CERTIFICATE, THE CERTIFICATE BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN ABOVE.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE
BALANCE BY INQUIRY OF THE TRUSTEE.
This certifies that ___________________ is the registered owner of an
undivided interest in certain monthly distributions with respect to a pool
(the "Contract Pool") of conventional manufactured housing installment sales
contracts and installment loan agreements (collectively, the "Contracts")
formed and sold, together with certain other property (collectively, the
"Trust Fund"), by CS First Boston Mortgage Securities Corp. (the
"Depositor"). The Contracts either were originated or acquired by and are
serviced by Ford Consumer Finance Company, Inc. (the "Seller" and the
"Servicer") and are secured by Manufactured Homes. The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the date
specified above (the "Agreement"), among the Depositor, the Seller, the
Servicer and The Chase Manhattan Bank, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Associates Manufactured Housing Contract Pass-Through
Certificates, Series 1996-1 (the "Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
On each Distribution Date, to the extent described in the Agreement, the
Trustee will cause to be distributed from funds in the Certificate Account
to each Class M Certificateholder an amount equal to the product of the
Percentage Interest evidenced by such Class M Certificateholder's Certificate
and the Class M Distribution Amount. Payments in respect of the Class M
Certificates are subordinated to payments in respect of the Class A
Certificates to the extent specified in the Agreement.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class M
Certificates with original denominations aggregating at least $5 million who
have given the Trustee written instructions at least five Business Days prior
to the related Record Date. Notwithstanding the foregoing, 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 appointed by the Trustee for that
purpose and specified in such notice of final distribution.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company 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 such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: THE CHASE MANHATTAN BANK
By:
---------------------------------------
Authorized Officer
(Form of Certificate of Authentication)
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: By: THE CHASE MANHATTAN BANK,
-------------------------- as Trustee
Authenticating Agent
or
------------------------------- ------------------------------
Authorized Signatory Authorized Signatory
Form of Reverse of Class M Certificate
As provided in the Agreement, deductions and withdrawals from the
Certificate Account will be made from time to time for purposes other than
distributions to Certificateholders, such purposes including payment of the
Monthly Servicing Fee, reimbursement to the Servicer for certain expenses
incurred by it and reimbursement to the Servicer for previous Advances with
respect to delinquent payments on the Contracts.
The Trustee will cause to be kept at its Corporate Trust Office in New
York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee will provide for the registration of Certificates and
of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Trustee
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate dated the date of
authentication by the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the person in whose name any
Certificate is registered as the owner of such Certificate and the Percentage
Interest in the Trust Fund evidenced thereby for the purpose of receiving
distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity or to correct or supplement any
provisions therein which may be inconsistent with any other provisions
therein, (ii) to add to the duties or obligations of the Servicer under the
Agreement, (iii) to obtain a rating by a nationally recognized rating agency
or to maintain or improve the rating of any Class of Certificates then given
by a rating agency (it being understood that none of the Trustee, the
Depositor, the Seller or the Servicer is obligated to obtain, maintain or
improve any rating of any Class of Certificates after the Closing Date), (iv)
to amend certain tests or definitions or to make any other provisions with
respect to matters or questions arising under the Agreement which are not
materially inconsistent with the provisions of the Agreement, including
without limitation, provisions relating to the issuance of definitive
Certificates to Certificate Owners provided that book-entry registration of
Book-Entry Certificates is no longer permitted; provided, however, that any
such amendment shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder
(including, without limitation, the maintenance of the status of the Trust
Fund as a REMIC under the Code). The Agreement may also be amended from time
to time by the Depositor, the Servicer and the Trustee, without consent of
the Certificateholders, to modify, eliminate or add to the provisions of the
Agreement to such extent as shall be necessary to maintain the qualification
of the Trust Fund as a REMIC under the Code or avoid, or minimize the risk
of, the imposition of any Tax on the Trust Fund, unless certain conditions
in the Agreement have been complied with, or to prevent the Trust Fund from
entering into certain prohibited transactions under the Code, provided that
such amendment shall not adversely affect in any material respect the
interests of any Certificateholder and there shall have been delivered to the
Trustee an Opinion of Counsel to the effect that such action is necessary or
appropriate for such purposes.
The Agreement may also be amended from time to time by the Depositor,
the Seller, the Servicer and the Trustee with the consent of the Holders of
Certificates of each Class affected thereby evidencing, as to each such
Class, Percentage Interests aggregating not less than 66%, for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment may
(i) reduce in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (ii) reduce the aforesaid percentage of
Certificates of a Class the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates of
such Class then outstanding or (iii) adversely affect the status of the Trust
Fund as a REMIC or cause a Tax to be imposed on the Trust Fund under the
REMIC provisions.
The respective obligations and responsibilities of the Depositor, the
Seller, the Servicer and the Trustee under the Agreement will terminate upon:
(i) the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Contract or the disposition of all property
acquired upon repossession of any Contract and the remittance of all funds
due thereunder, (ii) at the option of the Depositor or the Servicer, on any
Distribution Date after the first Distribution Date on which the Pool Balance
was less than 10% of the Cut-off Date Pool Balance, so long as the Depositor
or the Servicer, as the case may be, deposits in the Certificate Account the
repurchase price specified in the Agreement or (iii) upon the sale of the
Contracts and other property of the Trust Fund by the Trustee if neither the
Depositor nor the Servicer exercises the option in clause (ii) within 90 days
after the Distribution Date on which they are first entitled to do so, as
specified in the Agreement.
EXHIBIT F
Form of Class R Certificate
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED
IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 4.02 AND 4.09 OF THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE SMALL BUSINESS JOB PROTECTION ACT OF 1996, AS PART OF THE REPEAL OF
THE BAD DEBT RESERVE METHOD FOR THRIFT INSTITUTIONS, REPEALED THE APPLICATION
OF CODE SECTION 593(d) TO ANY TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 1995.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN); ANY SUCH TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF
SECTIONS 4.02 AND 4.09 OF SUCH POOLING AND SERVICING AGREEMENT.
Number __________ Class R
Date of Pooling and Percentage Interest: 100%
Servicing Agreement and
Cut-off Date: September 1, 1996 Distribution Date after
Latest Due Date: ________, ____
First Distribution Date: October 15, 1996
ASSOCIATES MANUFACTURED HOUSING CONTRACT
PASS-THROUGH CERTIFICATE,
SERIES 1996-1, CLASS R
evidencing a percentage interest in any distributions
allocable to the Class R Certificates with respect to a pool of fixed
rate conventional manufactured housing installment sales contracts
and installment loans formed and sold by
CS FIRST BOSTON MORTGAGE SECURITIES CORP.,
which manufactured housing installment sales contracts and installment loans
either were originated or acquired by and are initially serviced by Ford
Consumer Finance Company, Inc. (the "Seller" and the "Servicer").
This Certificate does not represent an obligation of or interest in CS
First Boston Mortgage Securities Corp., the Seller, the Servicer or the
Trustee referred to below or any of their affiliates.
Neither this Certificate nor the underlying manufactured housing
contracts are guaranteed or insured by CS First Boston Mortgage Securities
Corp., the Seller, the Servicer, the Trustee, any of their respective
affiliates or by any governmental agency or instrumentality.
This certifies that ______________________________ is the registered
owner of an undivided interest in certain monthly distributions with respect
to a pool (the "Contract Pool") of conventional manufactured housing
installment sales contracts and installment loan agreements (the "Contracts")
formed and sold, together with certain other property (collectively, the
"Trust Fund"), by CS First Boston Mortgage Securities Corp. (the
"Depositor"). The Contracts either were originated or acquired by and are
serviced by Ford Consumer Finance Company, Inc. and are secured by
Manufactured Homes. The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the date specified above (the "Agreement"),
among the Depositor, the Seller, the Servicer and The Chase Manhattan Bank,
as trustee (the "Trustee"), a summary of certain of the pertinent provisions
of which is set forth hereafter. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Associates Manufactured Housing Contract Pass-Through
Certificates, Series 1996-1 (the "Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
On each Distribution Date, to the extent described in the Agreement, the
Trustee will cause to be distributed from funds in the Certificate Account
to each Class R Certificateholder an amount equal to the product of the
Percentage Interest evidenced by such Class R Certificateholder's Certificate
and the Class R Distribution Amount. Payments in respect of the Class R
Certificates are subordinated to payments in respect of the Class A, Class
M and Class B Certificates to the extent specified in the Agreement.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class R
Certificates with original denominations aggregating at least $5 million who
have given the Trustee written instructions at least five Business Days prior
to the related Record Date. Notwithstanding the foregoing, 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 appointed by the Trustee for that
purpose and specified in such notice of final distribution.
The holder of this Class R Certificate, by acceptance hereof, agrees
that, in accordance with the requirements of Section 860D(b)(1) of the Code,
the federal tax return of the Trust for its first taxable year shall provide
that the Trust elects to be treated as a "real estate mortgage investment
conduit" (a "REMIC") under the Code for such taxable year and all subsequent
taxable years. The Class A, Class M and Class B Certificates shall be
"regular interests" in the REMIC and the Class R Certificates shall be the
"residual interests" in the REMIC. In addition, the holder of this Class R
Certificate, by acceptance hereof, (i) agrees to file tax returns consistent
with and in accordance with any elections, decisions or other reports made
or filed with regard to federal, state or local taxes on behalf of the Trust,
(ii) agrees to cooperate with the Servicer in connection with examinations
of the Trust's affairs by tax authorities, including administrative and
judicial proceedings and (iii) makes the additional agreements, designations
and appointments, and undertakes the responsibilities, set forth in Section
4.09 of the Agreement.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: THE CHASE MANHATTAN BANK
By:
---------------------------------------
Authorized Officer
(Form of Certificate of Authentication)
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: By: THE CHASE MANHATTAN BANK,
----------------------------- as Trustee
Authenticating Agent
or
----------------------------- ---------------------------
Authorized Signatory Authorized Signatory
Form of Reverse of Class R Certificate
As provided in the Agreement, deductions and withdrawals from the
Certificate Account will be made from time to time for purposes other than
distributions to Certificateholders, such purposes including payment of the
Monthly Servicing Fee, reimbursement to the Servicer for certain expenses
incurred by it, and reimbursement to the Servicer for previous advances with
respect to delinquent payments on the Contracts.
The Trustee will cause to be kept at its Corporate Trust Office in New
York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee will provide for the registration of Certificates and
of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Trustee
maintained for such purpose, the Trustee will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate dated the date of
authentication by the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the person in whose name any
Certificate is registered as the owner of such Certificate and the Percentage
Interest in the Trust Fund evidenced thereby for the purpose of receiving
distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity or to correct or supplement any
provisions therein which may be inconsistent with any other provisions
therein, (ii) to add to the duties or obligations of the Servicer under the
Agreement, (iii) to obtain a rating by a nationally recognized rating agency
or to maintain or improve the rating of any Class of Certificates then given
by a rating agency (it being understood that none of the Trustee, the
Depositor or the Servicer is obligated to obtain, maintain or improve any
rating of any Class of Certificates after the Closing Date), (iv) to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, including without limitation, provisions relating to the issuance
of definitive Certificates to Certificate Owners provided that book-entry
registration of Book-Entry Certificates is no longer permitted; provided that
any such amendment does not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder
(including, without limitation, the maintenance of the status of the Trust
Fund as a REMIC under the Code). The Agreement may also be amended from time
to time by the Depositor, the Servicer and the Trustee, without consent of
the Certificateholders, to modify, eliminate or add to the provisions of the
Agreement to such extent as shall be necessary to maintain the qualification
of the Trust Fund as a REMIC under the Code or avoid, or minimize the risk
of, the imposition of any Tax on the Trust Fund or to prevent the Trust Fund
from entering into certain prohibited transactions under the Code, provided
that such amendment shall not adversely affect in any material respect the
interests of any Certificateholder and there shall have been delivered to the
Trustee an Opinion of Counsel to the effect that such action is necessary or
appropriate for such purposes.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
of each Class affected thereby evidencing, as to each such Class, Percentage
Interests aggregating at least 66%, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment may (i) reduce in any
manner the amount of, or delay the timing of, distributions which are
required to be made on any Certificate without the consent of the Holder of
such Certificate, (ii) reduce the aforesaid percentage of Certificates of a
Class the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all Certificates of such Class then
outstanding or (iii) adversely affect the status of the Trust Fund as a REMIC
or cause a Tax to be imposed on the Trust Fund under the REMIC provisions.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon: (i) the
later of the final payment or other liquidation (or any advance with respect
thereto) of the last Contract or the disposition of all property acquired
upon repossession of any Contract and the remittance of all funds due
thereunder, (ii) at the option of the Depositor or the Servicer, on any
Distribution Date after the first Distribution Date on which the Pool Balance
was less than 10% of the Cut-off Date Pool Balance, so long as the Depositor
or the Servicer, as the case may be, deposits in the Certificate Account the
repurchase price specified in the Agreement or (iii) upon the sale of the
Contracts and other property of the Trust Fund by the Trustee if neither the
Depositor nor the Servicer exercises the option in clause (ii) within 90 days
after the Distribution Date on which they are first entitled to do so, as
specified in the Agreement.
EXHIBIT G
Form of Certificate Assignment
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE) (*This information, which is voluntary, is being requested to
ensure that the assignee will not be subject to backup withholding under
Section 3406 of the Code.)
- --------------------
- --------------------
- --------------------------------------------------------------------------
(Please Print or Typewrite Name and Address of Assignee)
- --------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does
irrevocably constitute and appoint
Attorney to transfer the within
- ---------------------------------------------
Certificate on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:
(Signature guaranty)
---------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.
EXHIBIT H
Certificate of Servicing Officer
The undersigned certifies that he is a (title) of Ford Consumer Finance
Company, Inc. (the "Seller" and the "Servicer") and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Servicer
pursuant to Section 7.02 of the Pooling and Servicing Agreement, dated as of
September 1, 1996 (the "Agreement"), among CS First Boston Mortgage
Securities Corp., the Seller, the Servicer and The Chase Manhattan Bank, as
trustee, and further certifies that:
1. The Monthly Report for the period from to attached to this
certificate is complete and accurate in accordance with the requirements of
Sections 7.01 and 7.02 of the Agreement; and
2. As of the date hereof, no Event of Default or event that with
notice or lapse of time or both would become an Event of Default has
occurred.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _____________, 19___.
FORD CONSUMER FINANCE COMPANY, INC.
By: -----------------------------------
Name:
Title:
EXHIBIT I
Transfer Affidavit
State of _______________ )
) ss:
County ________________ )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _____________________, a
corporation duly organized and existing under the laws of the State of
__________, the proposed transferee (the "Transferee") of the Associates
Manufactured Housing Contract Pass-Through Certificates, Series 1996-1, Class
R (the "Residual Interests") issued pursuant to the Pooling and Servicing
Agreement, dated as of September 1, 1996 (the "Agreement"), among CS First
Boston Mortgage Securities Corp., Ford Consumer Finance Company, Inc. and The
Chase Manhattan Bank, as trustee. Capitalized terms used, but not defined
herein or in Exhibit 1 hereto, shall have the meanings ascribed thereto in
the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring
the Residual Interests either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the same form as this affidavit. The Transferee
has no knowledge that any such affidavit is false.
3. The Transferee has been advised and understands that (i) a tax
shall be imposed on Transfers of Residual Interests to Persons that are not
Permitted Transferees; (ii) such tax is imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an
affidavit that such subsequent Transferee is a Permitted Transferee and, at
the time of Transfer, such Person does not have actual knowledge that the
affidavit is false.
4. The Transferee has been advised of, and understands that a tax
shall be imposed on a "pass-through entity" holding Residual Interests if at
any time during the taxable year of the pass-through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such
entity. The Transferee understands that no tax will be imposed for any
period for which the record holder furnishes to the pass-through entity an
affidavit stating that the record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
5. Transferee has reviewed Section 4.09 of the Agreement and
understands the legal consequences of the acquisition of the Residual
Interests including, without limitations, the restrictions on subsequent
Transfers and the provisions regarding voiding the Transfer and mandatory
sales. The Transferee expressly agrees to be bound by and to abide by the
provisions of Sections 4.02 and 4.09 of the Agreement. The Transferee
understands and agrees that any breach of any of the representations included
herein shall render the Transfer to the Transferee contemplated hereby null
and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer the Residual Interests and
in connection with any Transfer by a Person for whom the Transferee is acting
as nominee, trustee or agent, and the Transferee will not Transfer the
Residual Interests or cause any Residual Interests to be Transferred to any
Person that the Transferee knows is not a Permitted Transferee.
7. The Transferee's taxpayer identification number is
_______________________.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of ___________________, ____.
(Name of Transferee)
(Corporate Seal) By:
-----------------------------
ATTEST: Name:
Title:
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(Assistant) Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument, and
to be the ______________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and 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 J
Form of Investment Letter of Holder of Residual Interest
1. The Purchaser is acquiring the Residual Interest as principal for
its own account for the purpose of investment (neither the Underwriter nor
any of its Affiliates need represent that it is acquiring for purposes of
investment) and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain
within its control.
2. The Purchaser has knowledge and experience in financial and
business matters and is capable of evaluating the merits and risks of its
investment in the Residual Interest and is able to bear the economic risk of
such investment. The Purchaser is an "accredited investor" within the
meaning of Rule 501(a) under the rules and regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended. The
Purchaser has been given such information concerning the Residual Interest,
the underlying Contracts and the Servicer as it has requested.
3. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale by the Purchaser of
the Residual Interest.
4. The Purchaser understands that the Residual Interest has not been
and will not be registered under the Securities Act of 1933, as amended, or
any state securities laws and may be resold (which resale is not currently
contemplated) only if an exemption from registration is available, that
neither the Depositor, the Seller, the Servicer nor the Trustee is required
to register the Residual Interest and that any transfer must comply with
Sections 4.02 and 4.09 of the Pooling and Servicing Agreement. In connection
with any resale of the Residual Interest, the Purchaser shall not make any
general solicitation or advertisement.
5. The Purchaser agrees that it will obtain from any purchaser of the
Residual Interest from it the same representations, warranties and agreements
contained in paragraphs 1 through 5.
6. The Purchaser hereby directs the Trustee to register the Residual
Interest acquired by the Purchaser in the name of its nominee as follows:
___________________________.
Very truly yours,
By:
------------------------
Name:
Title:
