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) August 27, 1998.
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Oakwood Mortgage Investors, Inc.
--------------------------------
(Exact name of registrant as specified in charter)
North Carolina 333-58497 56-1886793
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7800 McCloud Road, Greensboro, North Carolina 27407
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (336) 664-2400
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
On August 27, 1998, the Registrant caused the issuance and sale of
$309,043,208 aggregate initial principal amount of Senior/Subordinated
Pass-Through Certificates, Series 1998-C (the "Certificates") pursuant to the
Series 1998-C Pooling and Servicing Agreement, dated as of August 1, 1998 (the
"Pooling and Servicing Agreement"), among the Registrant, Oakwood Acceptance
Corporation, as Servicer, and PNC Bank, National Association, as Trustee, and
the related Standard Terms to the Pooling and Servicing Agreement (July 1998
Edition) (the "Standard Terms"). The Certificates were issued in eight Classes
with Pass-Through Rates and initial Certificate Principal Balances as set forth
below:
INITIAL
CERTIFICATE
PRINCIPAL PASS THROUGH
DESIGNATION BALANCE RATE
----------- ------- ----
Class A-1 ARM $ 7,625,927 (1)
Class A $239,608,000 6.450%
Class M-1 $ 23,178,000 (2)
Class M-2 $ 14,680,000 (3)
Class B-1 $ 10,816,000 (4)
Class B-2 $ 13,135,281 (5)
Class X (6) (6)
Class R (7) (7)
(1) The Pass-Through Rate on the Class A-1 ARM Certificates for any
Distribution Date shall be the per annum rate equal to the lesser of
One-Month LIBOR, as determined (except for the initial Distribution Date)
on the applicable Floating Rate Determination Date, plus the Class A-1 ARM
Margin and the Weighted Average Net Asset Rate of the Adjustable Rate
Assets. For the initial Distribution Date, the Pass-Through Rate for the
Class A-1 ARM Certificates will be 5.89453% per annum, and the initial
Interest Accrual Period for the Class A-1 ARM Certificates will commence
on the Closing Date and end on September 14, 1998.
(2) The Pass-Through Rate on the Class M-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.775% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(3) The Pass-Through Rate on the Class M-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.075% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(4) The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.400% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(5) The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 9.200% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(6) The Class X Certificates shall have no Certificate Principal Balance
and no Pass-Through Rate.
(7) The Class R Certificates shall have no Certificate Principal Balance
and no Pass-Through Rate.
2
<PAGE>
The Certificates evidence, in the aggregate, the entire beneficial
ownership interest in OMI Trust 1998-C (the "Trust"), which consists
primarily of a pool of Assets transferred to the Trust by the Registrant
pursuant to the Pooling and Servicing Agreement. The Assets were purchased
by the Registrant in a privately-negotiated transaction with Oakwood
Acceptance Corporation ("OAC") pursuant to a Sales Agreement, dated as of
August 1, 1998, between the Registrant and OAC. Elections will be made to
treat certain assets owned by the Trust as "real estate mortgage investment
conduits" (each, a "REMIC") under the Internal Revenue Code of 1986, as
amended. The Certificates, except for the Class R Certificates, will be
designated as the "regular interests" in one of such REMICs. The Class R
Certificates will be designated as the "residual interests" in each of the
REMICs.
The Class A-1 ARM, Class A, Class M-1, Class M-2 Class B-1
Certificates are collectively referred to herein as the "Offered
Certificates." The Offered Certificates are senior to the Class B-2, Class X
and Class R Certificates. The Class A-1 ARM and Class A Certificates are
senior to the Class M-1, Class M-2 and Class B-1 Certificates. The Class M-1
Certificates are senior to the Class M-2 and Class B-1 Certificates. The
Class M-2 Certificates are senior to the Class B-1 Certificates.
The Offered Certificates have been sold by the Registrant to Credit
Suisse First Boston Corporation and First Chicago Capital Markets, Inc. (the
"Underwriters") pursuant to a Terms Agreement, dated as of August 20, 1998,
among the Underwriters, the Registrant and OAC, which incorporates by
reference the Registrant's Underwriting Agreement Standard Provisions, June
1995. The Class B-2, Class X and Class R Certificates have been transferred
to Oakwood Financial Corporation, a Nevada corporation ("OFC") and an
affiliate of the Registrant.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement or, if not defined
in the Pooling and Servicing Agreement, the meanings assigned to them in the
Standard Terms.
3
<PAGE>
Exhibits
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1.1 Terms Agreement, dated August 20, 1998, among the Registrant,
Oakwood Acceptance Corporation and Credit Suisse First Boston
Corporation and First Chicago Capital Markets, Inc., as
Underwriters, relating to the Offered Certificates (related
exhibits available upon request of the Registrant)
4.1 Copy of the Series 1998-C Pooling and Servicing Agreement, dated
as of August 1, 1998, by and among the Registrant, Oakwood
Acceptance Corporation, as Servicer, and PNC Bank, National
Association, as Trustee (related exhibits available upon request
of the Trustee)
4.2 Standard Terms to Pooling and Servicing Agreement (July 1998
Edition).
4
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
August 27, 1998 OAKWOOD MORTGAGE INVESTORS, INC.
By: /s/ DOUGLAS R. MUIR
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Name: Douglas R. Muir
Title: Vice President
5
<PAGE>
INDEX TO EXHIBITS
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<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1.1 Terms Agreement, dated August 20, 1998, among the Registrant, Oakwood
Acceptance Corporation and Credit Suisse First Boston Corporation and
First Chicago Capital Markets, Inc., as Underwriters, relating to the
Offered Certificates (related exhibit available upon request of the
Registrant).......................................................................
4.1 Copy of the Series 1998-C Pooling and Servicing Agreement, dated as of
August 1, 1998, by and among the Registrant, Oakwood Acceptance
Corporation, as Servicer, and PNC Bank, National Association (related
exhibit available upon request of the Trustee) ...................................
4.2 Standard Terms to Pooling and Servicing Agreement (July 1998 Edition).............
</TABLE>
6
OAKWOOD MORTGAGE INVESTORS, INC.
PASS-THROUGH CERTIFICATES
1998-C TERMS AGREEMENT
Dated: August 20, 1998
To: Oakwood Mortgage Investors, Inc. (the "Company")
Oakwood Acceptance Corporation ("OAC")
Re: Underwriting Agreement Standard Provisions dated
June 1995 (the "Standard Provisions")
Series
Designation: Pass-Through Certificates, Series 1998-C, Classes A-1 ARM, A, M-1,
M-2, B-1, B-2, X and R (collectively, the "Certificates"). The
Classes A-1 ARM, A, M-1, M-2, and B-1 Certificates are collectively
referred to herein as the "Underwritten Certificates."
UNDERWRITING AGREEMENT: Subject to the terms and conditions set forth
herein and to the terms of the Standard Provisions, which are incorporated by
reference herein, the Company hereby agrees to issue and sell to Credit Suisse
First Boston Corporation and First Chicago Capital Markets, Inc. (collectively,
the "Underwriters"), and the Underwriters hereby agree to purchase from the
Company, on August 27, 1998, the aggregate outstanding principal amount of the
Underwritten Certificates set forth in Schedule A hereto at the purchase price
and on the terms set forth below; provided, however, that the obligations of the
Underwriters are subject to: (i) receipt by the Company of the ratings on the
Certificates as set forth herein, (ii) receipt by the Underwriters of the Sales
Agreement (the "Sales Agreement"), dated as of August 1, 1998, by and between
the Company and OAC, and the Pooling and Servicing Agreement (as defined below),
each being in form and substance satisfactory to the Underwriters.
The Certificates will be issued by a trust (the "Trust") to be established
by the Company pursuant to a Pooling and Servicing Agreement, to be dated as of
August 1, 1998 among the
<PAGE>
Company, OAC, as servicer (the "Servicer") and PNC Bank, National Association,
as Trustee (the "Trustee"), which incorporates by reference the Company's
Standard Terms to Pooling and Servicing Agreement (July 1998 Edition)
(collectively, the "Pooling and Servicing Agreement"). The Certificates will
represent in the aggregate the entire beneficial ownership interest in the
assets of the Trust which will consist primarily of fixed-rate installment sales
contracts secured by units of manufactured housing (the "Contracts") with
original terms to maturity not exceeding 30 years and fixed-rate and
adjustable-rate mortgage loans secured by first-liens on the real estate to
which the related manufactured homes are deemed permanently affixed (the
"Mortgage Loans" and, together with the Contracts, the "Assets") with original
terms to maturity not exceeding 30 years, in each case having the
characteristics described in the final Prospectus Supplement, dated August 20,
1998, relating to the Underwritten Certificates (the "Prospectus Supplement").
The Company and the Servicer specifically covenant to make available on
the Closing Date or on each Subsequent Transfer Date, as applicable, for sale,
transfer and assignment to the Trust, Assets having the characteristics
described in the Prospectus Supplement; provided, however, that there may be
nonmaterial variances from the description of the Assets in the Prospectus
Supplement and the Assets actually delivered on such dates.
REGISTRATION STATEMENT: References in the Standard Provisions to the
Registration Statement shall be deemed to include registration statement
No. 333-58497.
SCHEDULED PRINCIPAL BALANCE OF ASSETS: $309,043,208.
CUT-OFF DATE WITH RESPECT TO THE ASSETS : August 1, 1998.
2
<PAGE>
TERMS OF THE CERTIFICATES:
================================================================================
Class Initial Principal Pass-Through Ratings Purchase
Designation Amount Rate S&P Moody's Price
- --------------------------------------------------------------------------------
A-1 ARM $ 7,625,927 (1) "AAA" "Aaa" 99.731000%
A $239,608,000 6.450% per annum "AAA" "Aaa" 99.775000%
M-1 $ 23,178,000 (2) "AA" "Aa3" 99.391000%
M-2 $ 14,680,000 (2) "A-" "A2" 99.269000%
B-1 $ 10,816,000 (2) "BBB" "Baa2" 99.163000%
================================================================================
(1) The Pass-Through Rate for the Class A-1 ARM Certificates will be the per
annum rate equal to the lesser of One-Month LIBOR, as determined on the
applicable Floating Rate Determination Date, plus the Class A-1 ARM
Margin, and the Weighted Average Net Asset Rate of the Adjustable Rate
Assets. The Class A-1 ARM Margin shall equal 0.25% on any Distribution
Date which occurs on or prior to the Call Option Date, and shall equal
0.50% on any other Distribution Date.
(2) The Pass-Through Rate for the (i) Class M-1 Certificates will equal the
lesser of 6.775% per annum and the Weighted Average Net Asset Rate, (ii)
Class M-2 Certificates will equal the lesser of 7.075% per annum and the
Weighted Average Net Asset Rate; and (iii) Class B-1 Certificates will
equal the lesser of 7.400% per annum and the Weighted Average Net Asset
Rate.
SUBORDINATION FEATURES: The Class M-2 Certificates will be subordinated to
the Class M-1 Certificates, the Class M-1 and M-2 Certificates (collectively,
the "Class M Certificates") will be subordinated to the Class A-1 ARM and Class
A Certificates (collectively, the "Senior Certificates"), and the Class B-1
Certificates will be subordinated to the Senior Certificates and the Class M
Certificates, all as described in the Prospectus Supplement.
DISTRIBUTION DATES: Each Distribution Date shall be the 15th day of each
month, or if such day is not a business day, on the next succeeding business
day, commencing in September 1998.
REMIC ELECTION: An election will be made to treat some or all of the
assets of the Trust as one or more real estate mortgage investment conduits for
federal income tax purposes (the "REMIC"). The Underwritten Certificates will be
designated as "regular interests" in the REMIC.
PURCHASE PRICE: The Underwriters have agreed to purchase the Underwritten
Certificates of each Class from the Company for the respective purchase prices
expressed in the table above as percentages of the Certificate Principal Balance
of each such Class. Payment of the purchase price for the Underwritten
Certificates shall be made to the Company in federal or similar immediately
available funds payable to the order of the Company.
DENOMINATIONS: The Underwritten Certificates will be issued in book-entry
form in minimum denominations of $1,000 and integral multiples of $1 in excess
thereof.
FEES: It is understood that servicing fees may be withheld from the
payments on the Assets in each month prior to distributions on the Certificates
on the Distribution Date occurring in such month to the extent permissible under
the Pooling and Servicing Agreement.
3
<PAGE>
CLOSING DATE AND LOCATION: 10:00 a.m. Eastern Time on August 27, 1998, at
the offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219-4074. The Company will deliver the Underwritten
Certificates to the Underwriters in book-entry form only, through the same-day
funds settlement system of The Depository Trust Company on the Closing Date.
DUE DILIGENCE: At any time prior to the Closing Date, the Underwriters
have the right to inspect the Asset Files and the related loan origination
procedures and to confirm the existence of the related manufactured homes or
mortgaged properties to ensure conformity with the Final Prospectus and the
Prospectus Supplement.
CONTROLLING AGREEMENT: This Terms Agreement sets forth the complete
agreement among the Company, OAC and the Underwriters and fully supersedes all
prior agreements, both written and oral, relating to the issuance of the
Underwritten Certificates and all matters set forth herein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Standard Provisions or the Prospectus Supplement.
COMPUTATIONAL MATERIALS: The Underwriters hereby represent and warrant
that (i) any information attached hereto as Exhibit 1 constitutes all
"Collateral Term Sheets" (as such term is defined in the no-action letters
addressed to Kidder, Peabody Acceptance Corporation I, et al. dated May 20, 1994
and to the Public Securities Association dated February 17, 1995 (collectively,
the "PSA Letters")) disseminated by them in connection with the Underwritten
Certificates; (ii) any information attached hereto as Exhibit 2 constitutes all
"Structural Term Sheets" and "Computational Materials" disseminated by it in
connection with the Underwritten Certificates and (iii) any information attached
hereto as Exhibit 3 constitutes all "Series Term Sheets" (as such term is
defined in the no-action letter addressed to Greenwood Trust Company, Discover
Card Master Trust I dated April 5, 1996).
For purposes hereof, as to each Underwriter, the term "Derived
Information" means such information, if any, in the Series Term Sheets,
Collateral Term Sheets, Structural Term Sheets and/or Computational Materials
that is not contained in either (i) the Prospectus taking into account
information incorporated therein by reference (other than information
incorporated by reference from the Series Term Sheets, Collateral Term Sheets,
Structural Term Sheets and/or Computational Materials) or (ii) any computer tape
furnished by the Company (the "Computer Tape"). The Underwriters agree, assuming
(i) all information provided by the Company (including the Computer Tape) is
accurate and complete in all material respects and (ii) the Company's
independent public accountants have determined that the Derived Information
agrees with the Computer Tape, to indemnify and hold harmless the Company, each
of the Company's officers and directors and each person who controls the Company
within the meaning of Section 15 of the Securities Act of 1933, as amended (the
"Act"), against any and all losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement of a material fact
contained in the Derived Information prepared by the Underwriters and
4
<PAGE>
incorporated by reference into the Registration Statement, or arise out of or
are based upon the omission or alleged omission to state in such Derived
Information a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, (except that no such indemnity shall be available
for any losses, claims, damages or liabilities, or actions in respect thereof
to the extent any such untrue statement or alleged untrue statement therein
results directly from an error in the information on the Computer Tape or in
any other information concerning the Mortgage Loans or the Contracts provided
by the Company to the Underwriters in writing or through electronic
transmission) and agree to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. The obligations of the Underwriters under
this paragraph shall be in addition to any liability which the Underwriters may
otherwise have. Notwithstanding the provisions of this paragraph, the
Underwriters shall not be required to pay any amount with respect to the
indemnities provided hereunder in excess of the underwriting discount or
commission applicable to the Certificates purchased by it hereunder.
INFORMATION PROVIDED BY THE UNDERWRITERS: It is understood and agreed that
the information set forth under the heading "Underwriting" in the Prospectus
Supplement and the sentence regarding the Underwriters' intentions to establish
a market in the Underwritten Certificates on the Cover Page of the Prospectus
Supplement is the only information furnished by the Underwriters for inclusion
in the Registration Statement and the Final Prospectus.
TRUSTEE: PNC Bank, National Association will act as Trustee of the Trust.
BLUE SKY QUALIFICATIONS: The Underwriters specify no jurisdictions and the
parties do not intend to qualify the Underwritten Securities in any
jurisdiction. The Company has agreed to pay all costs and expenses incurred in
connection with the preparation of a blue sky survey to be delivered on or prior
to the Closing Date.
STATE TAX OPINIONS: The Company shall deliver to the Underwriters an
opinion of counsel pursuant to Section 6(d)(iii) of the Standard Provisions with
respect to the State of North Carolina and the Commonwealth of Pennsylvania.
BLACKOUT PERIOD: None.
APPLICABLE LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
5
<PAGE>
NOTICES: All communications hereunder will be in writing and effective
only upon receipt and will be mailed, delivered or telegraphed and confirmed to
the parties at:
Oakwood Mortgage Investors, Inc. and
Oakwood Acceptance Corporation
7800 McCloud Road (27409-9634)
P.O. Box 27081
Greensboro, North Carolina 27425-7081
Attention: Douglas Muir
Credit Suisse First Boston Corporation
11 Madison Avenue
20th Floor
New York, New York 10010
Attention: Fiachra O'Driscoll
First Chicago Capital Markets
1 First National Plaza
Mail Suite 0596
Chicago, Illinois 60670
Attention: Ruth Leung
REQUEST FOR OPINIONS: (a) The Company and OAC hereby request and authorize
Hunton & Williams and Myles E. Standish, Esq., as their counsel in this
transaction, to issue on behalf of the Company and OAC, such legal opinions to
the Underwriters, their counsel, the Trustee and the Rating Agencies as may be
required by any and all documents, certificates or agreements executed in
connection with this Agreement.
(b) The Underwriters hereby request and authorize Simpson Thacher &
Bartlett, as their special counsel in this transaction, to issue to the
Underwriters such legal opinions as they may require, and the Company shall have
furnished to Simpson Thacher & Bartlett such documents as they may request for
the purpose of enabling them to pass upon such matters.
The Underwriters agree, subject to the terms and provisions of the
Standard Provisions, a copy of which is attached hereto, and which is
incorporated by reference herein in its entirety and made a part hereof to the
same extent as if such provisions had been set forth in full herein, to purchase
the Underwritten Certificates.
6
<PAGE>
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ FIACHRA O'DRISCOLL
----------------------------------
Name: Fiachra O'Driscoll
Title: Director
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ LISA N. WILHELM
----------------------------------
Name: Lisa N. Wilhelm
Title: Managing Director
Accepted and acknowledged
As of the Date First
Above Written:
OAKWOOD MORTGAGE INVESTORS, INC.
By: /s/ DOUGLAS R. MUIR
----------------------------------
Name: Douglas R. Muir
Title: Vice President
OAKWOOD ACCEPTANCE CORPORATION
By: /s/ DOUGLAS R. MUIR
----------------------------------
Name: Douglas R. Muir
Title: Vice President
7
<PAGE>
SCHEDULE A
Class A-1 ARM, Class A, Class M-1, Class M-2, and Class B-1 Certificates
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------
Class A-1 ARM Class A Class M-1
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Credit Suisse First Boston Corporation.... $3,813,000 $119,804,000 $11,589,000
- -----------------------------------------------------------------------------------------
First Chicago Capital Markets, Inc........ $3,812,927 $119,804,000 $11,589,000
- -----------------------------------------------------------------------------------------
Total.................................... $7,625,927 $239,608,000 $23,178,000
========== ============ ===========
Class M-2 Class B-1
-----------------------------------------------
Credit Suisse First Boston Corporation ... $7,340,000 $10,816,000
- -----------------------------------------------------------------------------------------
First Chicago Capital Markets, Inc........ $7,340,000 $0
- -----------------------------------------------------------------------------------------
Total.................................... $14,680,000 $10,816,000
=========== ===========
</TABLE>
===========================================
OAKWOOD MORTGAGE INVESTORS, INC.,
OAKWOOD ACCEPTANCE CORPORATION
AND
PNC BANK, NATIONAL ASSOCIATION,
TRUSTEE
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SERIES 1998-C POOLING AND SERVICING AGREEMENT
DATED AS OF AUGUST 1, 1998
----------
OAKWOOD MORTGAGE INVESTORS, INC.
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-C
===========================================
<PAGE>
THIS SERIES 1998-C POOLING AND SERVICING AGREEMENT, dated as of August 1,
1998, is made with respect to the formation of OMI Trust 1998-C (the "Trust")
among OAKWOOD MORTGAGE INVESTORS, INC., a North Carolina corporation ("OMI"),
OAKWOOD ACCEPTANCE CORPORATION, a North Carolina corporation ("OAC" and, in its
capacity as servicer, the "Servicer"), and PNC BANK, NATIONAL ASSOCIATION, a
national banking association, as trustee (the "Trustee"), under this Agreement
and the Standard Terms to Pooling and Servicing Agreement, July 1998 Edition
(the "Standard Terms"), all the provisions of which are incorporated herein as
modified hereby and shall be a part of this Agreement as if set forth herein in
full (this Agreement with the Standard Terms so incorporated, the "Pooling and
Servicing Agreement"). Capitalized terms used and not otherwise defined herein
shall have the respective meanings given them in the Standard Terms.
PRELIMINARY STATEMENT
The Board of Directors of OMI has duly authorized the formation of the
Trust to issue a Series of Certificates with an aggregate initial principal
amount of $309,043,208, to be known as the Senior/Subordinated Pass-Through
Certificates, Series 1998-C (the "Certificates"). The Certificates consist of 8
Classes that in the aggregate evidence the entire beneficial ownership interest
in the Trust.
In accordance with Section 10.01 of the Standard Terms, the Trustee will
make an election to treat all of the assets of the Trust as two real estate
mortgage investment conduits (each, a "REMIC" and, individually, the "Pooling
REMIC" and the "Issuing REMIC") for federal income tax purposes. The Pooling
REMIC will consist of the Distribution Account and the Assets listed on the
Asset Schedules attached as Schedule I (as defined below) hereto. The Issuing
REMIC will consist of the six Subaccounts designated as provided herein. The
"startup day" of each REMIC for purposes of the REMIC Provisions is the Closing
Date.
GRANTING CLAUSES
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
the Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
OMI hereby bargains, sells, conveys, assigns and transfers to the Trustee, in
trust and as provided in this Pooling and Servicing Agreement, without recourse
and for the exclusive benefit of the Holders of the Certificates, all of OMI's
right, title and interest in and to, and any and all benefits accruing to OMI
from, (a) the Contracts listed in Schedule IA hereto and the Mortgage Loans
(together with the Contracts, the "Assets") listed in Schedule IB hereto,
together with the related Asset Documents, and all payments thereon and proceeds
of the conversion, voluntary or involuntary, of the foregoing, including,
without limitation, all rights to receive all principal and interest payments
due on the Assets after the applicable Cut-off Date, including such scheduled
payments received by OMI or OAC on or prior to the applicable Cut-off Date, and
Principal Prepayments, Net Insurance Proceeds, Net Liquidation Proceeds,
Repurchase
S-1
<PAGE>
Prices and other unscheduled collections received on the Assets on
and after the applicable Cut-off Date; (b) the security interests in the
Manufactured Homes, Mortgaged Properties and Real Properties granted by the
Obligors pursuant to the related Assets; (c) all funds, other than investment
earnings, relating to the Assets on deposit in the Certificate Account or in the
Distribution Account for the Certificates and all proceeds thereof, whether in
the form of cash, instruments, securities or other properties; (d) any and all
rights, privileges and benefits accruing to OMI under the Sales Agreement with
respect to the Assets (provided that OMI shall retain its rights to
indemnification from the Seller under such Sales Agreement, but also hereby
conveys its rights to such indemnification to the Trustee as its assignee),
including the rights and remedies with respect to the enforcement of any and all
representations, warranties and covenants under such Sales Agreement; and (e)
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any Standard Hazard Insurance Policy or FHA Insurance, or any other
insurance policy relating to any of the Assets, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, rights to payment of any and every kind, and other forms of
obligations and receivables that at any time constitute all or part or are
included in the proceeds of any of the foregoing) to make distributions on the
Certificates as specified herein (the items referred to in clauses (a) through
(e) above shall be collectively referred to herein as the "Trust Estate").
The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform the duties herein or therein required to the best of its ability to the
end that the interests of the Holders of the Certificates may be adequately and
effectively protected.
SECTION 1. STANDARD TERMS.
--------------
OMI, the Servicer and the Trustee acknowledge that the Standard Terms
prescribe certain obligations of OMI, the Servicer and the Trustee with respect
to the Certificates. OMI, the Servicer and the Trustee agree to observe and
perform such prescribed duties, responsibilities and obligations, and
acknowledge that, except to the extent inconsistent with the provisions of this
Pooling and Servicing Agreement, the Standard Terms are and shall be a part of
this Pooling and Servicing Agreement to the same extent as if set forth herein
in full.
SECTION 2. DEFINED TERMS.
-------------
With respect to the Certificates and in addition to or in replacement for
the definitions set forth in Section 1.01 of the Standard Terms, the following
definitions shall be assigned to the defined terms set forth below:
"Accelerated Principal Distribution Amount": With respect to any
Distribution Date, the positive difference, if any, between the Target
Overcollateralization Amount and the Current Overcollateralization Amount.
S-2
<PAGE>
"Accrual Date": The Accrual Date shall be (i) with respect to the Class
A-1 ARM Certificates, the Closing Date and (ii) with respect to all other
Classes of Certificates, August 1, 1998.
"Adjusted Certificate Principal Balance": With respect to each Class of
Subordinated Certificates on any date of determination, its Certificate
Principal Balance immediately following the most recently preceding Distribution
Date reduced by all Writedown Amounts allocated to such Class on such
Distribution Date.
"Adjusted Subaccount Principal Balance": With respect to each of the
Corresponding Subaccounts relating to the Subordinated Certificates, on any date
of determination, its Subaccount Principal Balance immediately following the
most recently preceding Distribution Date reduced by all Writedown Amounts
allocated to such Subaccount on such Distribution Date.
"Average Sixty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Sixty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Assets (including
Assets in respect of which the related Manufactured Home, Real Property or
Mortgage Property has been repossessed or foreclosed upon but not yet disposed
of) as to which a Monthly Payment thereon is delinquent 60 days or more as of
the end of the related Collection Period, and the denominator of which is the
Pool Scheduled Principal Balance for such Distribution Date.
"Average Thirty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Thirty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Thirty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Assets (including
Assets in respect of which the related Manufactured Home, Real Property or
Mortgage Property has been repossessed or foreclosed upon but not yet disposed
of) as to which a Monthly Payment thereon is delinquent 30 days or more as of
the end of the related Collection Period, and the denominator of which is the
Pool Scheduled Principal Balance for such Distribution Date.
"Book-Entry Certificates": The Class A-1 ARM, Class A, Class M and
Class B Certificates.
"Call Option Date": The Distribution Date on which, after taking into
account distributions of principal to be made on such Distribution Date, the sum
of the Certificate Principal Balances of the Certificates is less than 10% of
the sum of the original Certificate Principal Balances of the Certificates.
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<PAGE>
"Carryover Interest Distribution Amount": With respect to each Class of
Certificates, except the Class X Certificates and the Residual Certificates, and
each Distribution Date, all amounts that were distributable on such Class as
Interest Distribution Amounts and as Carryover Interest Distribution Amounts on
the previous Distribution Date but not previously distributed, together with
interest accrued on such amount at the Pass-Through Rate in effect for such
Class during the related Interest Accrual Period. With respect to each
Subaccount on each Distribution Date, all amounts that were allocable to such
Subaccount as Priority Interest Distribution Amounts and as Carryover Interest
Distribution Amounts on the previous Distribution Date but not previously
distributed, together with interest accrued on any such amount at the
Pass-Through Rate in effect for the Corresponding Certificates with respect to
such Subaccount during the related Interest Accrual Period.
"Carryover Non-Priority Interest Distribution Amount": For any Subaccount,
on any Distribution Date, all amounts that were distributable on such Subaccount
as Non-Priority Interest Distribution Amounts on previous Distribution Dates
that remain unpaid.
"Carryover Writedown Interest Distribution Amount": With respect to each
Distribution Date and each related Class or Subaccount, all amounts that were
distributable on such Class or Subaccount as Writedown Interest Distribution
Amounts and Carryover Writedown Interest Distribution Amounts on the previous
Distribution Date but not previously distributed, plus interest accrued on any
such amount during the related Interest Accrual Period at the then applicable
Pass-Through Rate.
"Class A Certificates": The Class A Certificates.
"Class A Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date and the denominator of
which is the sum of the Class A Certificate Principal Balance, the Class M-1
Adjusted Certificate Principal Balance, the Class M-2 Adjusted Certificate
Principal Balance, the Class B-1 Adjusted Certificate Principal Balance and the
Class B-2 Adjusted Certificate Principal Balance, each immediately prior to such
Distribution Date.
"Class A Principal Distribution Amount": For any Distribution Date, will
equal (i) prior to the Cross-over Date, the entire Principal Distribution
Amount, less the Class A-1 ARM Principal Distribution Amount, (ii) on any
Distribution Date as to which the Principal Distribution Tests are not met, the
entire Principal Distribution Amount, less the Class A-1 ARM Principal
Distribution Amount, or (iii) on any other Distribution Date, the Class A
Percentage of the difference between the Principal Distribution Amount and the
Class A-1 ARM Principal Distribution Amount. For any Distribution Date, if the
Class A Principal Distribution Amount exceeds the Class A Certificate Principal
Balance less the Principal Distribution Shortfall Carryover Amount with respect
to such Class and Distribution Date, then such excess amount shall be allocated
to the Class M-1 Principal Distribution Amount.
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<PAGE>
"Class A Subaccount": The Class A Subaccount.
"Class A-1 ARM Certificates": The Class A-1 ARM Certificates.
"Class A-1 ARM Margin": For any Distribution Date on or prior to the Call
Option Date, 0.25%, and on any other Distribution Date, 0.50%.
"Class A-1 ARM Principal Distribution Amount": For any Distribution Date,
will equal the lesser of the entire Principal Distribution Amount attributable
to the Adjustable Rate Assets listed on Schedule I and the then current
Certificate Principal Balance of the Class A-1 ARM Certificates. For any
Distribution Date, if the Class A-1 ARM Principal Distribution Amount exceeds
the Class A-1 ARM Certificate Principal Balance less the Principal Distribution
Shortfall Carryover Amount with respect to such Class and Distribution Date,
then such excess amount shall be allocated to the Class M-1 Principal
Distribution Amount.
"Class A-1 ARM Subaccount": The Class A-1 ARM Subaccount.
"Class B Certificates": The Class B-1 Certificates and Class B-2
Certificates.
"Class B Subaccounts": Any or all, as appropriate, of the Class B-1 or
Class B-2 Subaccounts.
"Class B-1 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Adjusted Certificate Principal Balance of the Class
B-1 Certificates immediately prior to such Distribution Date and the denominator
of which is the sum of the Class A Certificate Principal Balance, the Class M-1
Adjusted Certificate Principal Balance, the Class M-2 Adjusted Certificate
Principal Balance, the Class B-1 Adjusted Certificate Principal Balance and the
Class B-2 Adjusted Certificate Principal Balance, each immediately prior to such
Distribution Date.
"Class B-1 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance, the Class M-1
Certificate Principal Balance and the Class M-2 Certificate Principal Balance
have not been reduced to zero and prior to the Cross-over Date, zero, (ii) on
any Distribution Date as to which the Principal Distribution Tests are not met
and the Class A Certificate Principal Balance, the Class M-1 Certificate
Principal Balance and the Class M-2 Certificate Principal Balance have not been
reduced to zero, zero, (iii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance,
the Class M-1 Certificate Principal Balance and the Class M-2 Certificate
Principal Balance each have been reduced to zero, the Principal Distribution
Amount, less the Class A-1 ARM Principal Distribution Amount, or (iv) on any
other Distribution Date, the Class B-1 Percentage of the difference between the
Principal Distribution Amount and the Class A-1 ARM Principal Distribution
Amount. For any Distribution Date, if the Class B-1 Principal Distribution
Amount exceeds the Class B-1 Certificate Principal Balance less the Principal
Distribution
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<PAGE>
Shortfall Carryover Amount with respect to such Class and Distribution Date,
then such excess amount shall be allocated to the Class B-2 Principal
Distribution Amount.
"Class B-2 Floor Amount": With respect to any Distribution Date, either
(a) 1.50% of the aggregate principal balance of the Pool Scheduled Principal
Balance as of the Cut-off Date, if the Class A Certificate Principal Balance,
the Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have not been reduced to
zero immediately prior to such Distribution Date, and (b) zero, if the Class A
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have been reduced to zero immediately prior to such Distribution Date.
"Class B-2 Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class B-2 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M-1 Adjusted
Certificate Principal Balance, the Class M-2 Adjusted Certificate Principal
Balance, the Class B-1 Adjusted Certificate Principal Balance and the Class B-2
Adjusted Certificate Principal Balance, each immediately prior to such
Distribution Date.
"Class B-2 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance, the Class M-1
Certificate Principal Balance, the Class M-2 Certificate Principal Balance and
the Class B-1 Certificate Principal Balance have not been reduced to zero and
prior to the Cross-over Date, zero, (ii) on any Distribution Date as to which
the Principal Distribution Tests are not met and the Class A Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
have not been reduced to zero, zero, (iii) on any Distribution Date as to which
the Principal Distribution Tests are not met and the Class A Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
each have been reduced to zero, the Principal Distribution Amount, less the
Class A-1 ARM Principal Distribution Amount, or (iv) on any other Distribution
Date, the Class B-2 Percentage of the difference between the Principal
Distribution Amount and the Class A-1 ARM Principal Distribution Amount. If the
Class A Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance and the Class B-1
Certificate Principal Balance have not been reduced to zero on or before a
Distribution Date, then amounts otherwise allocable as Class B-2 Principal
Distribution Amounts shall be allocated first to the Class B-1 Principal
Distribution Amount, next to the Class M-2 Principal Distribution Amount then to
the Class M-1 Principal Distribution Amount, next to the Class A Principal
Distribution Amount, and finally to the Class A-1 ARM Principal Distribution
Amount to the extent that allocation of such amounts to the Class B-2 Principal
Distribution Amount would reduce the Class B-2 Certificate Principal Balance
below the Class B-2 Floor Amount. On any Distribution Date, the Class B-2
Principal Distribution Amount shall not exceed the Class B-2 Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and such Distribution Date.
S-6
<PAGE>
"Class M Certificates": The Class M-1 and Class M-2 Certificates.
"Class M-1 Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class M-1 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M-1 Adjusted
Certificate Principal Balance, the Class M-2 Adjusted Certificate Principal
Balance, the Class B-1 Adjusted Certificate Principal Balance and the Class B-2
Adjusted Certificate Principal Balance, each immediately prior to such
Distribution Date.
"Class M-1 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance has not been
reduced to zero and prior to the Cross-over Date, zero, (ii) on any Distribution
Date as to which the Principal Distribution Tests are not met and the Class A
Certificate Principal Balance has not been reduced to zero, zero, (iii) on any
Distribution Date as to which the Principal Distribution Tests are not met and
the Class A Certificate Principal Balance has been reduced to zero, the
Principal Distribution Amount, less the Class A-1 ARM Principal Distribution
Amount, or (iv) on any other Distribution Date, the Class M-1 Percentage of the
difference between the Principal Distribution Amount and the Class A-1 ARM
Principal Distribution Amount. For any Distribution Date, if the Class M-1
Principal Distribution Amount exceeds the Class M-1 Certificate Principal
Balance less the Principal Distribution Shortfall Carryover Amount with respect
to such Class and Distribution Date, then such amounts shall be allocated to the
Class M-2 Principal Distribution Amount.
"Class M-2 Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class M-2 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M-1 Adjusted
Certificate Principal Balance, the Class M-2 Adjusted Certificate Principal
Balance, the Class B-1 Adjusted Certificate Principal Balance and the Class B-2
Adjusted Certificate Principal Balance, each immediately prior to such
Distribution Date.
"Class M-2 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance and the Class M-1
Certificate Principal Balance have not been reduced to zero and prior to the
Cross-over Date, zero, (ii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance and
the Class M-1 Certificate Principal Balance have not been reduced to zero, zero,
(iii) on any Distribution Date as to which the Principal Distribution Tests are
not met and the Class A Certificate Principal Balance and the Class M-1
Certificate Principal Balance have been reduced to zero, the Principal
Distribution Amount, less the Class A-1 ARM Principal Distribution Amount, or
(iv) on any other Distribution Date, the Class M-2 Percentage of the difference
between the Principal Distribution Amount and the Class A-1 ARM Principal
Distribution Amount. For any Distribution Date, if the Class M-2 Principal
Distribution Amount exceeds the Class M-2 Certificate Principal Balance less the
Principal Distribution Shortfall Carryover Amount with
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<PAGE>
respect to such Class and Distribution Date, then such amounts shall be
allocated to the Class B-1 Principal Distribution Amount.
"Class M Subaccounts": Any or all, as appropriate, of the Class M-1 or
Class M-2 Subaccounts.
"Class R Certificates": The Class R Certificates, which represent
beneficial ownership of both the Pooling REMIC Residual Interest and the Issuing
REMIC Residual Interest.
"Class R-1 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 10(b) hereof, the Class R-1
Certificates, which will represent the Issuing REMIC Residual Interest.
"Class R-2 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 10(b) hereof, the Class R-2
Certificates, which will represent the Pooling REMIC Residual Interest.
"Class X Carryover Strip Amount": With respect to the Class X Certificates
on each Distribution Date, all amounts that were distributable on such Class as
Class X Strip Amounts on previous Distribution Dates that remain unpaid.
"Class X Certificates": The Class X Certificates created pursuant to
Section 3 hereof.
"Class X Strip Amount": With respect to any Distribution Date, (i) 30
days' interest on the Subaccount Principal Balance of the Class A-1 ARM
Subaccount at a rate equal to the positive difference, if any, between the
Weighted Average Net Asset Rate of the Adjustable Rate Assets and the
Pass-Through Rate on the Class A-1 ARM Subaccount plus (ii) 30 days' interest
on the Subaccount Principal Balance of the Class A, Class M and Class B
Subaccounts, at a rate equal to the positive difference, if any, between the
Weighted Average Net Asset Rate of the Fixed Rate Assets and the weighted
average of the Pass-Through Rates on the Class A, Class M and Class B
Subaccount. Solely for the purposes of those calculations, the Pass-Through
Rates of the Class A-1 A-1 ARM, Class A, Class M and Class B Subaccounts shall
be the Pass-Through Rates on the respective Corresponding Certificates.
"Closing Date": August 27, 1998.
"Corporate Trust Office": The address set forth hereinbelow under
"Trustee".
"Corresponding Certificates": For any Subaccount, the Class of
Certificates bearing the same letter and numerical designation as that borne by
such Subaccount.
"Corresponding Subaccount" For any Class of Certificates, the Subaccount
bearing the same letter and numerical designation as that borne by such Class.
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<PAGE>
"Cross-over Date": The later to occur of (a) the Distribution Date
occurring in March 2003 or (b) the first Distribution Date on which the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the aggregate Adjusted Certificate Principal Balance of
the Subordinated Certificates plus the Current Overcollateralization Amount for
such Distribution Date and the denominator of which is the Pool Scheduled
Principal Balance on such Distribution Date, equals or exceeds 1.925 times the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the initial aggregate Adjusted Certificate Principal
Balance of the Subordinated Certificates and the denominator of which is the
Pool Scheduled Principal Balance as of the Cut-off Date.
"Cumulative Realized Losses": With respect to any Distribution Date, the
aggregate Realized Losses incurred on the Assets during the period from the
Cut-off Date through the end of the related Prepayment Period.
"Current Overcollateralization Amount": As of any Distribution Date, the
positive difference, if any, between the Scheduled Principal Balance of the
Assets and the Certificate Principal Balance of all then outstanding Classes of
Certificates.
"Current Realized Loss Ratio": With respect to any Distribution Date, the
annualized percentage derived from the fraction, the numerator of which is the
sum of the aggregate Realized Losses for the three preceding Prepayment Periods
and the denominator of which is the arithmetic average of the Pool Scheduled
Principal Balances for such Distribution Date and the preceding two Distribution
Dates.
"Cut-off Date": August 1, 1998.
"ERISA Restricted Certificates": The Class M-1, Class M-2, Class B-1,
Class B-2, Class X and Class R Certificates.
"Excess Subaccount Principal Balance": With respect to each Subaccount,
the excess, if any, of the Subaccount Principal Balance over the Certificate
Principal Balance of the Corresponding Certificates.
"Fixed Rate Assets": The Assets other than the Adjustable Rate Assets.
"Floating Rate Determination Date": For any Interest Accrual Period for
the Class A-1 ARM Certificates, the second London Banking Day prior to the
commencement of such Interest Accrual Period.
"Institutional Holder": An insurance company whose long-term debt is rated
at least A -(or equivalent rating) by a Rating Agency, or an equivalent rating
from any other nationally recognized statistical rating organization.
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"Interest Distribution Amount": On each Distribution Date, an amount equal
to interest accrued at the applicable Pass-Through Rate for the related Interest
Accrual Period on (i) in the case of the Class A-1 ARM Certificates or the Class
A-1 ARM Subaccount, and the Class A Certificates or the Class A Subaccount, the
Certificate Principal Balance of such Class or the Subaccount Principal Balance
of such Subaccount, respectively, immediately prior to that Distribution Date
and (ii) in the case of the Subordinated Certificates or the Corresponding
Subaccounts, on the Adjusted Certificate Principal Balance of such Class or the
Subaccount Principal Balance of such Subaccount, respectively, immediately prior
to that Distribution Date.
"Issuing REMIC": The Trust REMIC consisting of the Subaccounts.
"Issuing REMIC Residual Interest": The residual interest (as defined
in Code section 860G(a)(2)) in the Issuing REMIC.
"London Banking Day": Any day on which commercial banks and foreign
exchange markets settle payments in London and New York City.
"Non-Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the positive difference, if any, between
(i) the related Interest Distribution Amount for such Subaccount and (ii) the
related Priority Interest Distribution Amount for such Subaccount.
"Notional Principal Balance": The Notional Principal Balance of the Class
X Certificates on any date shall equal the sum of all of the Subaccount
Principal Balances on such date.
"Offered Certificates": The Class A-1 ARM, Class A, Class M and Class
B-1 Certificates.
"Offered Subordinated Certificates": The Class M and Class B-1
Certificates.
"One-Month LIBOR": For each applicable Interest Accrual Period, the per
annum rate established in accordance with the provisions of Section 13 hereof.
"Overcollateralization Reduction Amount": With respect to each
Distribution Date, the positive difference, if any, between the Current
Overcollateralization Amount and the Target Overcollateralization Amount;
provided, however, that if on any Distribution Date the Principal Distribution
Tests are not satisfied, then the Overcollateralization Reduction Amount shall
equal zero.
"Pass-Through Rate": With respect to each Class of Certificates (except
the Class X Certificates and the Residual Certificates) on any Distribution
Date, the per annum rate for such Class set forth in the table in Section 3
hereof. With respect to any Subaccount on any Distribution Date, the then
applicable Weighted Average Net Asset Rate.
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<PAGE>
"Pooling REMIC": The Trust REMIC consisting of the Assets and the
Distribution Account.
"Pooling REMIC Residual Interest": The residual interest (as defined
in Code section 860G(a)(2)) in the Pooling REMIC.
"Principal Distribution Shortfall Carryover Amount": With respect to each
Distribution Date and each Class of Certificates, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Certificates. With respect to each Distribution Date and each Corresponding
Subaccount, an amount equal to all Principal Distribution Amounts distributable
on the Corresponding Certificates from previous Distribution Dates that have not
yet been distributed on such Corresponding Certificates.
"Principal Distribution Tests": With respect to each Distribution Date:
(a) the Average Sixty-Day Delinquency Ratio as of such Distribution Date does
not exceed 5%; (b) the Average Thirty-Day Delinquency Ratio as of such
Distribution Date does not exceed 7%; (c) the Cumulative Realized Losses as of
such Distribution Date do not exceed an amount equal to the percentage set forth
below of the initial aggregate Certificate Principal Balance of all the
Certificates:
Distribution Dates Percentage
------------------ ----------
March 2003 through August 2004 7%
September 2004 through August 2005 8%
September 2005 through and after 9%
; and (d) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 2.75%.
"Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the Interest Distribution Amount for the
Corresponding Certificates.
"Private Certificates": The Class B-2 Certificates, Class X
Certificates and Residual Certificates.
"Qualified Bidders": Firms and institutions that are engaged in the
business of buying and selling manufactured housing paper.
"Rating Agency": Each of Moody's Investors Service, Inc. (99 Church
Street, New York, New York 10004), and Fitch IBCA, Inc. (One State Street,
New York, New York 10004).
"Regular Certificates": The Class A-1 ARM Certificates, Class A
Certificates, Class M Certificates, Class B Certificates and Class X
Certificates.
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"Residual Certificates": The Class R Certificates or, following the
division of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 10(b)
hereof, the Class R-1 Certificates and Class R-2 Certificates.
"Rule 144A Certificates": The Class B-2, Class X and Residual
Certificates.
"Servicing Fee Rate": 1.00% per annum.
"Subaccount": Each of the following six subaccounts established solely for
purposes of the REMIC Provisions by the Trustee, which have the Pass-Through
Rates and initial Subaccount Principal Balances set forth below:
INITIAL
SUBACCOUNT
SUBACCOUNT PASS-THROUGH RATE PRINCIPAL BALANCE
---------- ----------------- -----------------
A-1 ARM (1) $ 7,625,927
A (1) $ 239,608,000
M-1 (1) $ 23,178,000
M-2 (1) $ 14,680,000
B-1 (1) $ 10,816,000
B-2 (1) $ 13,135,281
(1) The Pass-Through Rate on the Class A-1 ARM Subaccount for any
Distribution Date shall be equal to the Weighted Average Net Asset Rate of
the Adjustable Rate Assets. The Pass-Through Rate on all other Subaccounts
for any Distribution Date shall be equal to the Weighted Average Net Asset
Rate of the Fixed Rate Assets.
The Final Scheduled Distribution Date for each Subaccount is as follows:
FINAL SCHEDULED
SUBACCOUNT DISTRIBUTION DATES
---------- ------------------
A-1 ARM October 15, 2027
A September 15, 2027
M-1 April 15, 2026
M-2 October 15, 2025
B-1 November 15, 2024
B-2 July 15, 2028
For purposes of Treasury Regulation ss.1.860G-1(a)(4), the latest possible
maturity date for each of the Subaccounts shall be its final Scheduled
Distribution Date as set forth above.
"Subaccount Principal Balance": With respect to each Subaccount, on any
date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such
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Subaccount in the definition of "Subaccount" above, minus all amounts allocated
to such Subaccount in reduction of its Subaccount Principal Balance pursuant to
Sections 5(a) and 6 hereof.
"Subordinated Certificates": The Class M-1, Class M-2, Class B-1,
Class B-2, Class X and Residual Certificates.
"Target Overcollateralization Amount": With respect to (i) any
Distribution Date prior to the Cross-over Date shall equal 2.00% of the
Scheduled Principal Balance of the Assets as of the Cut-off Date, and (ii) for
any other Distribution Date shall equal the lesser of (x) 2.00% of the Pool
Scheduled Principal Balance of the Assets as of the Cut-off Date and (y) 3.50%
of the then current Scheduled Principal Balance of the Assets; PROVIDED,
HOWEVER, that in no event shall the Target Overcollateralization Amount be less
than 0.50% of the Scheduled Principal Balance of the Assets as of the Cut-off
Date.
"Trustee": PNC Bank, National Association, not in its individual capacity
but solely as Trustee under this Pooling and Servicing Agreement, or any
successor trustee appointed as herein provided. Notices to the Trustee shall be
sent to Corporate Trust Department, 1600 Market Street, 30th Floor,
Philadelphia, PA 19103, Attn: OMI Trust 1998-C (the "Corporate Trust Office"),
or its successor in interest.
"Trust REMIC": Each of the Pooling REMIC and the Issuing REMIC.
"Underwriters": Credit Suisse First Boston Corporation (whose address is
11 Madison Avenue, 20th Floor, New York, New York 10010) and First Chicago
Capital Markets, Inc. (whose address is 1 First National Plaza, Chicago,
Illinois 60670).
"Weighted Average Net Asset Rate": With respect to any Distribution Date,
the weighted average of the Asset Rates applicable to the Monthly Payments that
were due during the related Collection Period on Assets that were Outstanding at
the beginning of the related Prepayment Period, less the Servicing Fee Rate.
"Writedown Amount": With respect to each Distribution Date, the amount, if
any, by which (i) the aggregate Certificate Principal Balance of all the
Certificates, after all distributions have been made on the Certificates on such
Distribution Date pursuant to Section 5(b) hereof, exceeds (ii) the Pool
Scheduled Principal Balance of the Assets for the next Distribution Date.
"Writedown Interest Distribution Amount": With respect to each
Distribution Date and each Class of Subordinated Certificates, interest accrued
during the related Interest Accrual Period at the applicable Pass-Through Rate
on any related Writedown Amount. With respect to each Distribution Date and each
Corresponding Subaccount, interest accrued during the related Interest Accrual
Period on any related Writedown Amount at the Pass-Through Rate applicable to
the Corresponding Certificates.
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SECTION 3. CERTIFICATES.
------------
The aggregate initial principal amount of Certificates that may be
executed and delivered under this Pooling and Servicing Agreement is limited to
$309,043,208, except for Certificates executed and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued
in 8 Classes having the designations, initial Certificate Principal Balances,
Pass-Through Rates and Final Scheduled Distribution Dates set forth or described
below:
INITIAL FINAL
CERTIFICATE SCHEDULED
PRINCIPAL PASS THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(8)
- ----------- ------------- ------------ -------------
A-1 ARM $ 7,625,927 (1) October 15, 2027
A $ 239,608,000 6.450% September 15, 2027
M-1 $ 23,178,000 (2) April 15, 2026
M-2 $ 14,680,000 (3) October 15, 2025
B-1 $ 10,816,000 (4) November 15, 2024
B-2 $ 13,135,281 (5) July 15, 2028
X (6) (6) July 15, 2028
R (7) (7) July 15, 2028
(1) The Pass-Through Rate on the Class A-1 ARM Certificates for any
Distribution Date shall be the per annum rate equal to the lesser of (i)
One-Month LIBOR, as determined (except for the initial Distribution Date)
on the applicable Floating Rate Determination Date, plus the Class A-1 ARM
Margin and (ii) the Weighted Average Net Asset Rate of the Adjustable Rate
Assets. For the initial Distribution Date, the Pass-Through Rate for the
Class A-1 ARM Certificates will be 5.89453% per annum, and the initial
Interest Accrual Period for the Class A-1 ARM Certificates will commence
on the Closing Date and end on September 14, 1998.
(2) The Pass-Through Rate on the Class M-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.775% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(3) The Pass-Through Rate on the Class M-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.075% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(4) The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.400% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(5) The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 9.200% per annum and
(ii) the Weighted Average Net Asset Rate of the Fixed Rate Assets.
(6) The Class X Certificates shall have no Certificate Principal Balance
and no Pass-Through Rate. The Class X Certificates will represent the
right to receive, on each Distribution Date, the applicable Class X Strip
Amount and any Class X Carryover Strip Amount.
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(7) The Class R Certificates shall have no Certificate Principal Balance
and no Pass-Through Rate, and shall represent the residual interest in
both the Pooling REMIC and the Issuing REMIC. Following the division of
the Class R Certificates into two separately transferable, certificated
and fully registered certificates in accordance with Section 10(b) hereof,
the Class R-1 and Class R-2 Certificates shall have no Certificate
Principal Balances and no Pass-Through Rates and shall represent the
residual interest in the Issuing REMIC and the Pooling REMIC,
respectively.
(8) For purposes of Treasury Regulation ss.1.860G-1(a)(4), the latest
possible maturity date of each Class of Certificates shall be the Final
Scheduled Distribution Date.
SECTION 4. DENOMINATIONS.
-------------
The Book-Entry Certificates will be registered as one or more certificates
in the name of the Clearing Agency or its nominee. Beneficial interests in the
Book-Entry Certificates will be held by the Beneficial Owners through the
book-entry facilities of the Clearing Agency, in minimum denominations of $1,000
and integral multiples of $1 in excess thereof.
The Class X Certificates and the Residual Certificates will be issued in
certificated, fully registered form. The Class X Certificates and the Residual
Certificates will be issued in minimum Percentage Interests equal to 10%.
SECTION 5. DISTRIBUTIONS.
-------------
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall allocate the Available Distribution Amount to the various
Subaccounts, and, where applicable, OAC, to the extent of the amount thereof
remaining after application pursuant to clauses (1) through (4) of Section 4.03
of the Standard Terms, in the following manner and in the following order of
priority:
(i) First, concurrently, to the Class A-1 ARM Subaccount and the Class A
Subaccount, (A) first, its Priority Interest Distribution Amount for such
Distribution Date, and (B) second, the related Carryover Interest
Distribution Amount for such Distribution Date, if any;
(ii) Second, to the Class M-1 Subaccount, (A) first, the related Priority
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such
Distribution Date;
(iii) Third, to the Class M-2 Subaccount, (A) first, the related Priority
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such
Distribution Date;
(iv) Fourth, to the Class B-1 Subaccount, (A) first, the related Priority
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such
Distribution Date;
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(v) Fifth, to the Class B-2 Subaccount, (A) first, the related Priority
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such
Distribution Date;
(vi) Sixth, concurrently, to the Class A-1 ARM Subaccount and the Class A
Subaccount, the related Principal Distribution Shortfall Carryover Amount
for the Class A-1 ARM Subaccount and the Class A Subaccount, if any, for
such Distribution Date, allocated between the Class A-1 ARM Subaccount and
the Class A Subaccount pro rata based on their respective Principal
Distribution Shortfall Carryover Amount;
(vii) Seventh, concurrently, to the Class A-1 ARM Subaccount, the Class
A-1 ARM Principal Distribution Amount and to the Class A Subaccount, the
Class A Principal Distribution Amount in reduction of the Certificate
Principal Balance of such Classes, until reduced to zero;
(viii) Eighth, to the Class M-1 Subaccount, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date, (C) third, the related Principal Distribution
Shortfall Carryover Amount for the Class M-1 Subaccount, if any, for such
Distribution Date, and (D) fourth, the Class M-1 Principal Distribution
Amount, in reduction of the Subaccount Principal Balance of such Class,
until the Class M-1 Certificate Principal Balance is reduced to zero;
(ix) Ninth, to the Class M-2 Subaccount, (A) first, any related Writedown
Interest Distribution Amount for such Distribution Date, (B) second, any
related Carryover Writedown Interest Distribution Amount for such
Distribution Date, (C) third, the related Principal Distribution Shortfall
Carryover Amount for the Class M-2 Subaccount, if any, for such
Distribution Date, and (D) fourth, the Class M-2 Principal Distribution
Amount, in reduction of the Subaccount Principal Balance of such Class,
until the Class M-2 Certificate Principal Balance is reduced to zero;
(x) Tenth, to the Class B-1 Subaccount, (A) first, any related Writedown
Interest Distribution Amount for such Distribution Date, (B) second, any
related Carryover Writedown Interest Distribution Amount for such
Distribution Date, (C) third, the related Principal Distribution Shortfall
Carryover Amount for the Class B-1 Subaccount, if any, for such
Distribution Date, and (D) fourth, the Class B-1 Principal Distribution
Amount, in reduction of the Subaccount Principal Balance of such Class,
until the Class B-1 Certificate Principal Balance is reduced to zero;
(xi) Eleventh, to the Class B-2 Subaccount, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date, (C) third, the related Principal Distribution
Shortfall Carryover Amount for the Class B-2 Subaccount, if any, for
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such Distribution Date, and (D) fourth, the Class B-2 Principal
Distribution Amount, in reduction of the Subaccount Principal Balance of
such Class, until the Class B-2 Certificate Principal Balance is reduced
to zero;
(xii) Twelfth, if Oakwood Acceptance Corporation is the Servicer, to the
Servicer in the following sequential order: (A) the Servicing Fee with
respect to such Distribution Date; and (B) any Servicing Fees from
previous Distribution Dates remaining unpaid;
(xiii) Thirteenth, to each Subaccount, (i) first, its Carryover
Non-Priority Interest Distribution Amount for such Distribution Date, (ii)
second, its Non-Priority Interest Distribution Amount for such
Distribution Date, and (iii) its remaining Subaccount Principal Balance in
each case with the Available Distribution Amount being allocated among the
Subaccounts pro rata based upon the total Excess Subaccount Principal
Balance remaining to be paid with respect to each Subaccount; and
(xiv) Finally, any remainder to Holders of the Pooling REMIC Residual
Interest.
(b) On each Distribution Date, after all Subaccount allocations have been
made as described in Section 5(a) above and Section 6 below, the Trustee (or the
Paying Agent on behalf of the Trustee) shall withdraw all amounts allocated to
the various Subaccounts, and shall distribute such amounts in the following
manner and in the following order of priority:
(i) First, concurrently, to the Class A-1 ARM Certificates and the Class A
Certificates, (A) first, its Interest Distribution Amount for such
Distribution Date, and (B) second, the related Carryover Interest
Distribution Amount, if any, for such Distribution Date;
(ii) Second, to the Class M-1 Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such Distribution
Date;
(iii) Third, to the Class M-2 Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such Distribution
Date;
(iv) Fourth, to the Class B-1 Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such Distribution
Date;
(v) Fifth, to the Class B-2 Certificates, (A) first, the related Interest
Distribution Amount for such Distribution Date and (B) second, any related
Carryover Interest Distribution Amount for such Distribution Date;
S-17
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(vi) Sixth, concurrently, to the Class A-1 ARM Certificates and the Class
A Certificates, the related Principal Distribution Shortfall Carryover
Amount for the Class A-1 ARM Certificates and the Class A Certificates, if
any, for such Distribution Date, allocated between the Class A-1 ARM
Certificates and the Class A Certificates pro rata based on their
respective Principal Distribution Shortfall Carryover amount;
(vii) Seventh, concurrently, to the Class A-1 ARM Certificates, the Class
A-1 ARM Principal Distribution Amount and to the Class A Certificates, the
Class A Principal Distribution Amount in reduction of the Certificate
Principal Balance of such Classes, until reduced to zero;
(viii) Eighth, to the Class M-1 Certificates, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date, (C) third, the related Principal Distribution
Shortfall Carryover Amount for the Class M-1 Certificates, if any, for
such Distribution Date, and (D) fourth, the Class M-1 Principal
Distribution Amount, in reduction of the Certificate Principal Balance of
such Class, until it is reduced to zero;
(ix) Ninth, to the Class M-2 Certificates, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date, (C) third, the related Principal Distribution
Shortfall Carryover Amount for the Class M-2 Certificates, if any, for
such Distribution Date, and (D) fourth, the Class M-2 Principal
Distribution Amount, in reduction of the Certificate Principal Balance of
such Class, until it is reduced to zero;
(x) Tenth, to the Class B-1 Certificates, (A) first, any related Writedown
Interest Distribution Amount for such Distribution Date, (B) second, any
related Carryover Writedown Interest Distribution Amount for such
Distribution Date, (C) third, the related Principal Distribution Shortfall
Carryover Amount for the Class B-1 Certificates, if any, for such
Distribution Date, and (D) fourth, the Class B-1 Principal Distribution
Amount, in reduction of the Certificate Principal Balance of such Class,
until it is reduced to zero;
(xi) Eleventh, to the Class B-2 Certificates, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date, (C) third, the related Principal Distribution
Shortfall Carryover Amount for the Class B-2 Certificates, if any, for
such Distribution Date, and (D) fourth, the Class B-2 Principal
Distribution Amount, in reduction of the Certificate Principal Balance of
such Class, until it is reduced to zero;
(xii) Twelfth, first to the Class A Certificates, the Accelerated
Principal Distribution Amount for such Distribution Date, in reduction of
the Certificate Principal Balance of such Class, until reduced to zero;
second, to the Class A-1 ARM Certificates, the Accelerated Principal
Distribution Amount for such Distribution Date in reduction of the
Certificate
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Principal Balance of such Class, until reduced to zero; and finally,
sequentially to the Class M-1, Class M-2, Class B-1 and Class B-2
Certificates, in that order, the Accelerated Principal Distribution Amount
for such Distribution Date in reduction of the Certificate Principal
Balance of each such Class, until reduced to zero; in each case allocated
among such Classes PRO RATA based on their Certificate Principal Amount;
(xiii) Thirteenth, to the Class X Certificates in the following
sequential order:
(A) the current Class X Strip Amount; and
(B) any Class X Carryover Strip Amount; and
(xiv) Finally, any remainder to the holders of the Issuing REMIC Residual
Interest.
(c) All distributions or allocations made with respect to each Class on
each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates of such Class based on their respective Percentage Interests. So
long as the Book-Entry Certificates are registered in the name of a Clearing
Agency or its nominee, the Trustee shall make all distributions or allocations
on such Certificates by wire transfers of immediately available funds to the
Clearing Agency or its nominee. In the case of Certificates issued in
fully-registered, certificated form, payment shall be made either (i) by check
mailed to the address of each Certificateholder as it appears in the Certificate
Register on the Record Date immediately prior to such Distribution Date or (ii)
by wire transfer of immediately available funds to the account of a Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and such Holder
is (A) with respect to any Class A, Class M or Class B Certificates issued after
the Closing Date in certificated, fully-registered form, the registered owner of
Class A, Class M or Class B Certificates with an aggregate initial Certificate
Principal Balance of at least $1,000,000, and (B) with respect to the Residual
Certificates or Class X Certificates, the registered owner of the Residual
Certificates or Class X Certificates evidencing an aggregate Percentage Interest
of at least 50%. The Trustee may charge any Holder its standard wire transfer
fee for any payment made by wire transfer. Final distribution on the
Certificates will be made only upon surrender of the Certificates at the offices
of the Trustee set forth in the notice of such final distribution sent by the
Trustee to all Certificateholders pursuant to Section 9.01 of the Standard
Terms.
(d) (1) Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.
(2) Any amounts remaining in the Subaccounts on any Distribution
Date after all distributions required to be made by this Pooling and Servicing
Agreement have been made, and any amounts remaining in the Issuing REMIC after
payment in full of the Regular Interests therein
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and any administrative expenses associated with the Trust, will be distributed
to the Holders of the Issuing REMIC Residual Interest.
SECTION 6. ALLOCATION OF WRITEDOWN AMOUNTS.
-------------------------------
On each Distribution Date, after all required distributions have been made
on the Certificates pursuant to Section 5 above, the Writedown Amount, if any,
shall be allocated on such Distribution Date in the following manner and in the
following order of priority:
(a) First, to the Class B-2 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero;
(b) Second, to the Class B-1 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero;
(c) Third, to the Class M-2 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero; and
(d) Finally, to the Class M-1 Subaccount, to be applied in reduction of
the Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero.
(e) Writedown Amounts allocated to the Class B-2, Class B-1, Class M-2 and
Class M-1 Subaccounts pursuant to this Section 6 shall be allocated to the
Class B-2, Class B-1, Class M-2 and Class M-1 Certificates, respectively,
until the Adjusted Certificate Principal Balance of each such Class has
been reduced to zero.
SECTION 7. REMITTANCE REPORTS.
------------------
(a) The Remittance Report for each Distribution Date shall identify the
following items, in addition to the items specified in Section 4.01 of the
Standard Terms:
(1) the Interest Distribution Amount for each Class of the Certificates
for such Distribution Date (which shall equal the Priority Interest
Distribution Amount for the Corresponding Subaccount) and the Carryover
Interest Distribution Amount, as well as any Writedown Interest
Distribution Amount and any Carryover Writedown Interest Distribution
Amount, for each Class of the Certificates for such Distribution Date, and
the amount of interest of each such category to be distributed on each
such Class based upon the Available Distribution Amount for such
Distribution Date;
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(2) the amount to be distributed on such Distribution Date on each Class
of the Certificates to be applied to reduce the Certificate Principal
Balance of such Class (which will be equal to the amount to be allocated
on such Distribution Date on the Corresponding Subaccount to be applied to
reduce the Subaccount Principal Balance of such Subaccount), separately
identifying any portion of such amount attributable to any prepayments,
the amount to be distributed to reduce the Principal Distribution
Shortfall Carryover Amount on each such Class based upon the Available
Distribution Amount for such Distribution Date and separately identifying
any Accelerated Principal Distribution Amount to be distributed on the
Certificates, the Current Overcollateralization Amount and the Target
Overcollateralization Amount.
(3) the aggregate amount, if any, to be distributed on the Residual
Certificates;
(4) the amount of any Writedown Amounts to be allocated to reduce the
Certificate Principal Balance of any Class of Subordinated Certificates
(which will be equal to the amount of any Writedown Amount to be allocated
to the Corresponding Subaccount) on such Distribution Date;
(5) the Certificate Principal Balance of each Class of the Certificates
(which will be equal to the Subaccount Principal Balance of the
Corresponding Subaccount) and the Adjusted Certificate Principal Balance
of each Class of the Offered Subordinated Certificates (which will be
equal to the Adjusted Subaccount Principal Balance of the Corresponding
Subaccount) after giving effect to the distributions to be made (and any
Writedown Amounts to be allocated) on such Distribution Date;
(6) the aggregate Interest Distribution Amount remaining unpaid, if any,
and the aggregate Carryover Interest Distribution Amount remaining unpaid,
if any, for each Class of Certificates (which will be equal to the
Priority Interest Distribution Amount and Carryover Interest Distribution
Amount remaining unpaid on the Corresponding Subaccount), after giving
effect to all distributions to be made on such Distribution Date;
(7) the aggregate Writedown Interest Distribution Amount remaining unpaid,
if any, and the aggregate Carryover Writedown Interest Distribution Amount
remaining unpaid, if any, for each Class of Certificates (which will be
equal to such amounts remaining unpaid on the Corresponding Subaccount),
after giving effect to all distributions to be made on such Distribution
Date; and
(8) the aggregate Principal Distribution Shortfall Carryover Amount
remaining unpaid, if any, for each Class of Certificates, after giving
effect to the distributions to be made on such Distribution Date.
In the case of information furnished pursuant to clauses (1), (2) and (3)
above, the amounts shall be expressed, with respect to any Class A, Class M or
Class B Certificate, as a dollar amount per $1,000 denomination.
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(b) In addition to mailing a copy of the related Remittance Report to each
Certificateholder on each Distribution Date in accordance with Section 4.01 of
the Standard Terms, on each Distribution Date, the Trustee shall mail a copy of
the related Remittance Report to the Underwriters (to the attention of the
person, if any, reported to the Trustee by the Underwriters) and to THE
BLOOMBERG (to the address and to the person, if any specified to the Trustee by
Credit Suisse First Boston Corporation). The Trustee shall not be obligated to
mail any Remittance Report to THE BLOOMBERG unless and until Credit Suisse First
Boston Corporation shall have notified the Trustee in writing of the name and
address to which such reports are to be mailed, which notice, once delivered,
will be effective for all Distribution Dates after the date such notice is
received by the Trustee unless and until superseded by a subsequent notice.
SECTION 8. LIMITED RIGHT OF SERVICER TO RETAIN SERVICING FEES FROM
----------------------------------------------------------------
COLLECTIONS.
------------
The Servicer may retain its Servicing Fee and any other servicing
compensation provided for herein and in the Standard Terms from gross interest
collections on the Assets prior to depositing such collections into the
Certificate Account; PROVIDED, HOWEVER, that OAC as Servicer may only so retain
its Servicing Fee in respect of a Distribution Date from gross interest
collections on the Assets to the extent that the amounts on deposit in the
Certificate Account and attributable to the Available Distribution Amount for
such Distribution Date exceed the sum of all amounts to be allocated and
distributed on such Distribution Date pursuant to clauses (i) through (xxii)
under Section 5(b) hereof.
SECTION 9. MODIFICATIONS OF STANDARD TERMS.
-------------------------------
The following modifications to the Standard Terms shall be in effect with
respect to the Certificates only.
(a) Section 1.01 of the Standard Terms is hereby amended as follows:
(i) the definition of "Compensating Interest" is hereby
deleted in its entirety.
(ii) the definition of "Interest Accrual Period" is hereby
amended by deleting the definition thereof and replacing such
definition in its entirety as follows:
"Interest Accrual Period": With respect to each
Distribution Date (i) for the Class A-1 ARM Certificates, the
period commencing on the 15th day of the preceding month
through the 14th day of the month in which such Distribution
Date occurs (except that the first Interest Accrual Period for
the Class A-1 ARM Certificates will be the period from the
Closing Date through September 14, 1998) and (ii) for the
Class A, Class M and Class B Certificates, the calendar month
preceding the month in which the
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Distribution Date occurs. Interest on the Class A-1 ARM
Certificates will be calculated on the basis of a 360-day
year and the actual number of days elapsed in the applicable
Interest Accrual Period. Interest on the Class A Certificates,
Class M-1 Certificates, Class M-2 Certificates, Class B-1
Certificates and Class B-2 Certificates will be computed on
the basis of a 360-day year consisting of twelve 30-day
months.
(iii) the definition of "Principal Distribution Amount" is
hereby amended by adding the phrase "less (e) the
Overcollateralization Reduction Amount" after the final
parenthetical therein.
(b) Section 3.04 of the Standard Terms is hereby amended by deleting the
title "Advances and Compensating Interest" and replacing such title with the
title "Advances", and is amended further by deleting Section 3.04(e) in its
entirety.
(c) Section 5.05(a) of the Standard Terms is hereby amended by the
addition of the following to the end of the first paragraph thereof:
"Notwithstanding the foregoing, no Rule 144A Agreement,
Transferee Agreement or Opinion of Counsel shall be required
in connection with any Private Certificate that is a
Book-Entry Certificate, and each Beneficial Owner of such
Certificate shall be deemed to have represented, by virtue of
its acquisition of such Certificate, that it is a Qualified
Institutional Buyer and that the certifications contained in
Exhibit 5.5 to these Standard Terms apply to its purchase of
the Certificates."
SECTION 10. REMIC ADMINISTRATION.
--------------------
(a) For purposes of the REMIC Provisions, all of the Certificates (except
the Residual Certificates) will be designated as the "regular interests" in the
Issuing REMIC, the Subaccounts will be designated as the "regular interests" in
the Pooling REMIC, the Class R Certificates will be designated as the "residual
interest" in each of the Issuing REMIC and the Pooling REMIC and, following the
division of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 10(b)
below, the Class R-1 Certificates will be designated as the "residual interest"
in the Issuing REMIC and the Class R-2 Certificates will be designated as the
"residual interest" in the Pooling REMIC.
(b) Upon the request of any registered Holder of a Class R Certificate,
the Trustee shall issue to such Holder two separately transferable, certificated
and fully registered Certificates (a Class R-1 Certificate and a Class R-2
Certificate), in substantially the forms of Exhibit R-1 and Exhibit R-2 attached
hereto. In the event that the Class R Certificates are exchanged for separately
transferrable Class R-1 and Class R-2 Certificates: (1) the Class R-1
Certificates will be designated as the residual interest in the Issuing REMIC,
(2) the Class R-2 Certificates will be designated as the residual interest in
the Pooling REMIC, (3) the Holders of a majority of the Percentage Interest
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in the Class R-1 Certificates together with the Holders of a majority of the
Percentage Interest in the Class R-2 Certificates will have the option to make a
Terminating Purchase given to the Holders of a majority of the Percentage
Interest in the Residual Certificates pursuant to Section 9.01 of the Standard
Terms, and (4) the restrictions on the transfer of a Residual Certificate
provided in the Standard Terms will apply to both the Class R-1 and the Class
R-2 Certificates.
SECTION 11. AUCTION CALL.
------------
(a) If the Servicer does not exercise its optional termination right as
described in Section 9.01 of the Standard Terms within 90 days after it first
becomes entitled to do so, the Trustee shall use commercially reasonable efforts
to solicit bids for the purchase of all Assets, REO Properties and Repo
Properties remaining in the Trust from no fewer than two prospective purchasers
that it believes to be Qualified Bidders. If OAC is then the Servicer of the
Assets, the solicitation of bids shall be conditioned upon the continuation of
OAC as the servicer of the Assets on terms and conditions substantially similar
to those in the Pooling and Servicing Agreement, except that it shall not be
required to pay compensating interest or make Advances.
(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
Assets, REO Properties and Repo Properties either (i) to the Servicer, if it
shall so elect, or (ii) to the highest bidder, and in either case the Trustee
shall distribute the net proceeds of such sale in redemption of the Certificates
in compliance with Article IX of the Standard Terms and Section 5 hereof. Any
such sale must also comply with the requirements applicable to a Terminating
Purchase set forth in Section 9.02 of the Standard Terms.
(c) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by Section
9.02 of the Standard Terms) shall be deducted from the bid price of the Assets,
REO Properties and Repo Properties in determining the net proceeds therefrom.
(d) If the Trustee does not obtain bids from at least two Qualified
Bidders, or does not receive a bid such that the net proceeds therefrom would at
least equal the Termination Price, it shall not sell the Assets, REO Properties
and Repo Properties, and shall thereafter have no obligation to attempt to sell
same.
(e) The Servicer shall cooperate with and provide necessary information to
the Trustee in connection with any auction sale as described herein.
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SECTION 12. VOTING RIGHTS.
-------------
The Voting Rights applicable to the Certificates shall be allocated 0.5%
to the Class R Certificates, 0.5% to the Class X Certificates and 99% to the
other Certificates in proportion with their respective Certificate Principal
Balance.
SECTION 13. DETERMINATION OF ONE-MONTH LIBOR.
--------------------------------
(a) The Class A-1 ARM Certificates will be entitled to receive on each
Distribution Date interest distributions at the Pass-Through Rate for such Class
as specified in Section 3 hereof.
(b) With respect to the Class A-1 ARM Certificates, One-Month LIBOR shall
be determined as follows:
On each Floating Rate Determination Date, the Servicer will determine the
arithmetic mean of the London Interbank Offered Rate ("LIBOR") quotations
for one-month Eurodollar deposits ("One-Month LIBOR") for the succeeding
Interest Accrual Period for the Class A-1 ARM Certificates on the basis of
the Reference Banks' offered LIBOR quotations provided to the Servicer as
of 11:00 a.m. (London time) on such Floating Rate Determination Date. As
used herein with respect to a Floating Rate Determination Date, "Reference
Banks" means leading banks engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of
business in London, (ii) whose quotations appear on the Bloomberg Screen
US0001M Index Page on the Floating Rate Determination Date in question and
(iii) which have been designated as such by the Servicer and are able and
willing to provide such quotations to the Servicer on each Floating Rate
Determination Date; and "Bloomberg Screen US0001M Index Page" means the
display designated as page "US0001M on the Bloomberg Financial Markets
Commodities News (or such other pages as may replace such page on that
service for the purpose of displaying LIBOR quotations of major banks). If
any Reference Bank should be removed from the Bloomberg Screen US0001M
Index Page or in any other way fails to meet the qualifications of a
Reference Bank, the Servicer may, in its sole discretion, designate an
alternative Reference Bank.
On each Floating Rate Determination Date, One-Month LIBOR for the next
succeeding Interest Accrual Period for the Class A-1 ARM Certificates will
be established by the Servicer as follows:
(i) If, on any Floating Rate Determination Date, two or more of the
Reference Banks provide offered One-Month LIBOR quotations on the
Bloomberg Screen US0001M Index Page, One-Month LIBOR for the next Accrual
Period for the Class A-1 ARM Certificates will be the arithmetic mean of
such offered quotations (rounding such arithmetic mean if necessary to the
nearest five decimal places).
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(ii) If, on any Floating Rate Determination Date, only one or none of the
Reference Banks provides such offered One-Month LIBOR quotations for the
next applicable Interest Accrual Period, One-Month LIBOR for the next
Accrual Period for the Class A-1 ARM Certificates will be the higher of
(x) One-Month LIBOR as determined on the previous Floating Rate
Determination Date and (y) the Reserve Interest Rate. The "Reserve
Interest Rate" will be the rate per annum that the Servicer determines to
be either (A) the arithmetic mean (rounding such arithmetic mean if
necessary to the nearest five decimal places) of the one-month Eurodollar
lending rate that New York City banks selected by the Servicer are
quoting, on the relevant Floating Rate Determination Date, to the
principal London offices of at least two leading banks in the London
interbank market or (B) in the event that the Servicer can determine no
such arithmetic mean, the lowest one-month Eurodollar lending rate that
the New York City banks selected by the Servicer are quoting on such
Floating Rate Determination Date to leading European banks.
(iii) If, on any Floating Rate Determination Date, the Servicer is
required but is unable to determine the Reserve Interest Rate in the
manner provided in paragraph (ii) above, One-Month LIBOR for the next
applicable Interest Accrual Period will be One-Month LIBOR as determined
on the previous Floating Rate Determination Date.
Notwithstanding the foregoing, One-Month LIBOR for an Interest Accrual
Period shall not be based on One-Month LIBOR for the previous Interest Accrual
Period on the Class A-1 ARM Certificates for two consecutive Floating Rate
Determination Dates. If, under the priorities described above, One-Month LIBOR
for an Interest Accrual Period on the Class A-1 ARM Certificates would be based
on One-Month LIBOR for the previous Floating Rate Determination Date for the
second consecutive Floating Rate Determination Date, the Servicer shall select
an alternative index (over which the Servicer has no control) used for
determining one-month Eurodollar lending rates that is calculated and published
(or otherwise made available) by an independent third party.
The establishment of One-Month LIBOR (or an alternative index) by the
Servicer and the Servicer's subsequent calculation of the Pass-Through Rate on
the Class A-1 ARM Certificates for the relevant Interest Accrual Period, in the
absence of manifest error, will be final and binding.
SECTION 14. GOVERNING LAW.
-------------
The Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of North Carolina applicable to agreements
made and to be performed therein. The parties hereto agree to submit to the
personal jurisdiction of all federal and state courts sitting in the State of
North Carolina and hereby irrevocably waive any objection to such jurisdiction.
In addition, the parties hereto hereby irrevocably waive any objection that they
may have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement in any federal or state court sitting in the State
of North Carolina, and further irrevocably waive any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
S-26
<PAGE>
SECTION 15. FORMS OF CERTIFICATES.
---------------------
Each of the Schedules and Exhibits attached hereto or referenced herein
are incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.
SECTION 16. COUNTERPARTS.
------------
This Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 17. ENTIRE AGREEMENT.
----------------
This Pooling and Servicing Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.
S-27
<PAGE>
IN WITNESS WHEREOF, OMI, the Servicer and the Trustee have caused this
Pooling and Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized and their respective signatures duly attested all as
of the day and year first above written.
OAKWOOD MORTGAGE INVESTORS, INC.
By: /s/ DOUGLAS R. MUIR
---------------------------------
Name: Douglas R. Muir
Title: Vice President
OAKWOOD ACCEPTANCE CORPORATION
By: /s/ DOUGLAS R. MUIR
---------------------------------
Name: Douglas R. Muir
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
AS TRUSTEE
By: /s/ JUDY A. WISNIEWSKI
---------------------------------
Name: Judy A. Wisniewski
Title: Assistant Vice President
S-28
<PAGE>
STATE OF NORTH CAROLINA )
) s.
COUNTY OF DAVIDSON )
The foregoing instrument was acknowledged before me in the County of
Davidson this 27th day of August, 1998 by Douglas R. Muir, Vice President of
Oakwood Mortgage Investors, Inc., a North Carolina corporation, on behalf of the
corporation.
/s/ REBECCA WADDELL
-----------------------------------
Notary Public
My Commission expires: 3/4/2002
STATE OF NORTH CAROLINA )
) s.
COUNTY OF DAVIDSON )
The foregoing instrument was acknowledged before me in the County of
Davidson this 27th day of August, 1998 by Douglas R. Muir, Vice President of
Oakwood Acceptance Corporation, a North Carolina corporation, on behalf of the
corporation.
/s/ REBECCA WADDELL
-----------------------------------
Notary Public
My Commission expires: 3/4/2002
S-29
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
) s.
CITY OF PHILADELPHIA )
The foregoing instrument was acknowledged before me in the City of
Philadelphia, this 27th day of August, 1998, by Judy Wisniewski,
Assistant Vice President of PNC Bank, National Association, a national
banking association, on behalf of the association.
/s/ JOAN F. WILSON
-----------------------------------
Notary Public
My Commission expires: Feb. 12, 2001
S-30
<PAGE>
INDEX TO SCHEDULES AND EXHIBITS
SCHEDULE IA Contract Schedule
SCHEDULE IB Mortgage Loan Schedule
EXHIBIT A-1 Form of Class A-1 ARM Certificate
EXHIBIT A Form of Class A Certificate
EXHIBIT M-1 Form of Class M-1 Certificate
EXHIBIT M-2 Form of Class M-2 Certificate
EXHIBIT B-1 Form of Class B-1 Certificate
EXHIBIT B-2 Form of Class B-2 Certificate
EXHIBIT X Form of Class X Certificate
EXHIBIT R Form of Class R Certificate
S-31
- ------------------------------------------------------------------------------
STANDARD TERMS
TO
POOLING AND SERVICING AGREEMENT
------------------------------------------
OAKWOOD MORTGAGE INVESTORS, INC.
PASS-THROUGH CERTIFICATES
JULY 1998 EDITION
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS................................................. 1
ARTICLE II
THE ASSETS
Section 2.01 ASSIGNMENT OF ASSETS........................................ 24
Section 2.02 THE CONTRACTS............................................... 24
Section 2.03 THE MORTGAGE LOANS.......................................... 26
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE............... 29
Section 2.05 REPRESENTATIONS AND WARRANTIES AS TO ASSETS................. 29
Section 2.06 PURCHASE OR SUBSTITUTION OF CERTAIN ASSETS.................. 30
ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS
Section 3.01 THE SERVICER................................................ 34
Section 3.02 MAINTENANCE OF RECORDS; INSPECTION OF ASSET FILES........... 34
Section 3.03 COLLECTION OF PAYMENTS ON ASSETS; SERVICING DELINQUENT
ACCOUNTS.................................................. 35
Section 3.04 ADVANCES AND COMPENSATING INTEREST.......................... 35
Section 3.05 SERVICING ACCOUNT........................................... 36
Section 3.06 CERTIFICATE ACCOUNT......................................... 37
Section 3.07 WITHDRAWALS FROM CERTIFICATE ACCOUNT; REMITTANCE AMOUNTS.... 37
Section 3.08 REALIZATION UPON DEFAULTED ASSETS........................... 38
Section 3.09 TITLE, CONSERVATION, AND DISPOSITION OF REPO PROPERTY AND
REO PROPERTY.............................................. 39
Section 3.10 FULL PREPAYMENTS AND LIQUIDATIONS; TRUSTEE TO COOPERATE;
RELEASE OF MORTGAGE FILES................................. 41
Section 3.11 MAINTENANCE OF SECURITY INTERESTS AND OTHER LIENS IN
MANUFACTURED HOMES........................................ 43
Section 3.12 DUE-ON-SALE CLAUSES AND ASSUMPTION AGREEMENTS............... 43
Section 3.13 ANNUAL ACCOUNTANTS' CERTIFICATE; ANNUAL STATEMENT AS TO
COMPLIANCE................................................ 43
Section 3.14 SERVICING FEES.............................................. 44
Section 3.15 LATE CHARGES; PREPAYMENT FEES OR OTHER CHARGES.............. 44
Section 3.16 MAINTENANCE OF STANDARD HAZARD INSURANCE, PRIMARY MORTGAGE
INSURANCE, AND ERRORS AND OMISSIONS COVERAGE.............. 45
ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS
Section 4.01 REMITTANCE REPORTS.......................................... 47
Section 4.02 DISTRIBUTION ACCOUNT........................................ 48
Section 4.03 ALLOCATION OF AVAILABLE DISTRIBUTION........................ 48
Section 4.04 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.................... 49
Section 4.05 REPORTS OF SECURITY PRINCIPAL BALANCES TO THE CLEARING
AGENCY.................................................... 49
Section 4.06 PREPARATION OF REGULATORY REPORTS........................... 50
<PAGE>
PAGE
----
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
Section 5.01 POOLING REMIC INTERESTS..................................... 51
Section 5.02 THE CERTIFICATES............................................ 51
Section 5.03 BOOK-ENTRY CERTIFICATES..................................... 51
Section 5.04 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES....... 52
Section 5.05 RESTRICTIONS ON TRANSFER.................................... 53
Section 5.06 ACCRUAL OF INTEREST ON THE CERTIFICATES..................... 54
Section 5.07 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES........... 55
Section 5.08 PERSONS DEEMED OWNERS....................................... 55
Section 5.09 APPOINTMENT OF PAYING AGENT................................. 55
ARTICLE VI
OMI AND THE SERVICER
Section 6.01 LIABILITY OF OMI AND THE SERVICER........................... 55
Section 6.02 OMI'S REPRESENTATIONS AND WARRANTIES........................ 55
Section 6.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER... 57
Section 6.04 CORPORATE EXISTENCE......................................... 58
Section 6.05 LIMITATION ON LIABILITY OF OMI, THE SERVICER AND OTHERS..... 58
Section 6.06 SERVICER RESIGNATION........................................ 59
Section 6.07 ASSIGNMENT OR DELEGATION OF DUTIES BY THE SERVICER AND OMI.. 59
Section 6.08 OMI AND SERVICER MAY OWN CERTIFICATES....................... 59
Section 6.09 PROTECTION OF TRUST ESTATE.................................. 59
Section 6.10 PERFORMANCE OF OBLIGATIONS.................................. 60
ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS
Section 7.01 EVENTS OF DEFAULT........................................... 60
Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.................... 61
Section 7.03 NOTIFICATIONS TO SERVICER AND TO CERTIFICATEHOLDERS......... 63
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 DUTIES OF TRUSTEE........................................... 63
Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE....................... 64
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR ASSETS............... 66
Section 8.04 TRUSTEE MAY OWN CERTIFICATES................................ 66
Section 8.05 TRUSTEE'S FEES AND EXPENSES................................. 66
Section 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE........................ 67
Section 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE...................... 67
Section 8.08 SUCCESSOR TRUSTEE........................................... 67
Section 8.09 MERGER OR CONSOLIDATION OF TRUSTEE.......................... 68
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE............... 68
(ii)
<PAGE>
PAGE
----
Section 8.11 APPOINTMENT OF CUSTODIANS................................... 69
Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES.............................................. 69
ARTICLE IX
TERMINATION
Section 9.01 TERMINATION UPON REPURCHASE OR LIQUIDATION OF ALL CONTRACTS. 69
Section 9.02 ADDITIONAL TERMINATION REQUIREMENTS......................... 71
ARTICLE X
REMIC TAX PROVISIONS
Section 10.0 REMIC ADMINISTRATION........................................ 72
Section 10.0 PROHIBITED ACTIVITIES....................................... 73
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.0 AMENDMENTS.................................................. 75
Section 11.0 RECORDATION OF AGREEMENT; COUNTERPARTS...................... 75
Section 11.0 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.................. 76
Section 11.0 NOTICES..................................................... 76
Section 11.0 SEVERABILITY OF PROVISIONS.................................. 77
Section 11.0 SALE OF CONTRACTS........................................... 77
Section 11.0 NOTICE TO RATING AGENCY..................................... 77
TABLE OF EXHIBITS
Exhibit 1 Form of Servicer Custodial Certification
Exhibit 2-A Form of Initial Certification
Exhibit 2-B Form of Final Certification
Exhibit 3 Form of Recordation Report
Exhibit 4 Form of Request for Release
Exhibit 5 Form of Rule 144A Agreement
Exhibit 6 Form of Transferee Agreement
Exhibit 7 Form of Benefit Plan Affidavit
Exhibit 8 Form of Residual Transferee Agreement
Exhibit 9 Form of Power of Attorney
(iii)
<PAGE>
RECITALS
Oakwood Mortgage Investors, Inc. ("OMI"), Oakwood Acceptance Corporation
("OAC") and a banking association or corporation as trustee (the "Trustee") have
entered into a Pooling and Servicing Agreement that provides for the issuance of
manufactured housing contract and/or mortgage pass-through securities (the
"Certificates") that in the aggregate evidence the entire interest in a pool
consisting of retail installment sales contracts for units of manufactured
housing (the "Contracts") and/or mortgage loans secured by first liens on one-
to four-family residential real properties (the "Mortgage Loans," and, together
with the Contracts, the "Assets") and other property owned by the Trust (the
"Trust") created by such Pooling and Servicing Agreement. These Standard Terms
are a part of, and are incorporated by reference into, such Pooling and
Servicing Agreement.
STANDARD PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Pooling and Servicing Agreement and
as hereinafter set forth, OMI, OAC and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.
Except as otherwise specified herein or in a Pooling and Servicing
Agreement or as the context may otherwise require, whenever used in these
Standard Terms, the following words and phrases shall have the meanings assigned
to them in this Article. Unless otherwise specified, all calculations described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months.
"Accrual Date": With respect to any Series or Class of Certificates, the
date upon which interest begins accruing on the Certificates of such Series or
Class, which shall be specified in the related Pooling and Servicing Agreement.
"Adjustable Rate Asset": An "adjustable rate" Contract or Mortgage Loan,
the Asset Rate of which is subject to periodic adjustment in accordance with the
terms of the Contract or the related Mortgage Note.
"Advance": Any Servicing Advance or P&I Advance.
"Affiliate": As to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Application for Relief": As defined in Section 4.06 hereof.
"Asset": A Contract or Mortgage Loan.
"Asset Documents": Collectively, Contract Documents and Mortgage Loan
Documents.
"Asset File": With respect to any Asset, the related Contract File or
Trustee Mortgage Loan File, as
-1-
<PAGE>
applicable.
"Asset Rate": As to any Asset, the related Contract Rate or Mortgage
Rate, as applicable.
"Asset Schedule": For any Series, the list or lists attached to the
related Pooling and Servicing Agreement consisting of the related Contract
Schedule, if any, and the related Mortgage Loan Schedule, if any.
"Assignment": A document effecting the transfer of all the rights of a
secured party under a Mortgage to a transferee, in recordable form for the
jurisdiction in which the related Mortgaged Property is located.
"Available Distribution Amount": For each Distribution Date for a Series
of Certificates, the amount on deposit in the related Distribution Account at
the commencement of business on such Distribution Date, less the amounts
distributable from the Distribution Account in accordance with clauses (1)
through (4) of Section 4.03(a) hereof.
"Beneficial Owner": With respect to a Book-Entry Certificate, the Person
who is registered as owner of that Certificate in the books of the Clearing
Agency for that Certificate or in the books of a Person maintaining an account
with such Clearing Agency.
"Benefit Plan Affidavit": An affidavit substantially in the form of
Exhibit 7 hereto.
"Benefit Plan Opinion": An Opinion of Counsel to the effect that a
proposed transfer of a Certificate will not (a) cause any of the assets of the
Trust to be regarded as "plan assets" for purposes of the Plan Asset
Regulations, (b) give rise to any fiduciary duty under ERISA on the part of OMI,
the Servicer, the Trustee or the Trust's Tax Matters Person, if any, or (c) be
treated as, or result in, a "prohibited transaction" under section 406 or
section 407 of ERISA or under section 4975 of the Code. The cost of obtaining a
Benefit Plan Opinion shall not be borne by OMI, the Servicer or the Trustee.
"Board of Directors": The Board of Directors of OMI, OAC or any other
Servicer or any committee of that Board duly authorized to act on behalf of that
Board with respect to any matters arising hereunder.
"Book-Entry Certificates": The Classes of Certificates of a Series, if
any, classified as such in the related Pooling and Servicing Agreement.
"Business Day": Any day that is not a Saturday, Sunday, holiday or other
day on which commercial banking institutions in the city and state in which the
Trustee's Corporate Trust Office is located are authorized or obligated by law
or executive order to be closed.
"Certificate Account": An account established pursuant to and described in
Section 3.06 hereof. The Certificate Account will be an asset of the Trust but
not an asset of any related REMIC. Solely for federal income tax purposes, the
Servicer will be the owner of the Certificate Account and, thus, any income
earned by the Certificate Account, or any amounts transferred by any related
REMIC to the Certificate Account, shall be treated as income earned by, or
amounts distributed to, the Servicer.
"Certificate Principal Balance": With respect to each Certificate or Class
of Certificates, on any date of determination, the outstanding principal amount,
if any, of such Certificate(s) immediately prior to the most recently preceding
Distribution Date (or in the case of a date of determination on or before the
first Distribution Date, an amount equal to the initial principal amount of such
Certificate(s) as of the Closing Date) net of the amounts, if any, applied on
such preceding Distribution Date to reduce the principal amount of such
Certificate(s) in accordance with Section 4.03 hereof.
"Certificate Register" and "Certificate Registrar": The respective
meanings specified for such terms in
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<PAGE>
Section 5.04 hereof.
"Certificateholder" or "Holder": With respect to any Certificate, the
Person in whose name such Certificate is registered in the Certificate Register.
"Certificates": The certificates authorized by, executed and delivered
under, and issued pursuant to any Pooling and Servicing Agreement.
"Class": With respect to any Series, the classification of different
types of the Certificates within such Series as set forth in the related Pooling
and Servicing Agreement.
"Clearing Agency": The Depository Trust Company, or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the regulations of the Securities and Exchange Commission thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": With respect to any Series, the date specified as the
"Closing Date" in the related Pooling and Servicing Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to each Distribution Date for a Series,
the period commencing on the second day of the calendar month preceding the
month in which such Distribution Date occurs and ending at the close of business
on the first day of the calendar month in which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended.
"Compensating Interest": For any Remittance Date, the amount of all Due
Date Interest Shortfalls for the preceding Collection Period to the extent such
Shortfalls do not exceed the Servicer's aggregate servicing compensation in
respect of such Collection Period.
"Contract": Each retail installment sales contract and security agreement
or installment loan agreement and security agreement relating to the Contracts
(1) that has been executed by an Obligor and pursuant to which such Obligor (A)
purchased the Manufactured Home described therein, (B) agreed to pay the
deferred purchase price or amount borrowed, together with finance charges, as
therein provided in connection with such purchase or loan, (C) granted a
security interest in such Manufactured Home to the originator of such contract
and (D) undertook to perform certain other obligations as specified in such
contract or loan agreement and (2) that has been assigned to the Trustee
pursuant to the Pooling and Servicing Agreement.
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<PAGE>
"Contract Documents": With respect to each Contract:
(a) the original Contract;
(b) either (1) the original title document for the related
Manufactured Home, a duplicate certified by the appropriate governmental
authority that issued the original thereof or, if such original is not yet
available, a copy of the application filed with the appropriate
governmental authority pursuant to which the original title document will
issue (which copy may be on microfilm or optical disk maintained by the
Servicer in its records separate from the other related Contract
Documents), or (2) if the laws of the jurisdiction in which the related
Manufactured Home is located do not provide for the issuance of title
documents for manufactured housing units, other evidence of ownership of
the related Manufactured Home that is customarily relied upon in such
jurisdiction as evidence of title to a manufactured housing unit;
(c) unless such Contract is a Land Secured Contract, evidence of one
or more of the following types of perfection of the Seller's or the
Trustee's security interest in the related Manufactured Home granted by
such Contract (or, if such evidence is not yet available, a copy of the
application or other filing used to obtain such security interest (which
copy may be on microfilm or optical disk maintained by the Servicer in its
records separate from the other related Contract Documents)), as
appropriate in the applicable jurisdiction: (1) notation of such security
interest on the title document, (2) a financing statement meeting the
requirements of the UCC, with evidence of recording indicated thereon, (3)
a fixture filing in accordance with the UCC, with evidence of filing
indicated thereon, or (4) such other evidence of perfection of a security
interest in a manufactured housing unit as is customarily relied upon in
the jurisdiction in which the related Manufactured Home is located;
(d) an original assignment of the Contract from the initial named
payee thereunder to the Seller (unless the Seller is the initial named
payee for such Contract);
(e) originals of any assumption agreements relating to such
Contract, together with originals of any surety or guaranty agreement
relating to such Contract or to any such assumption agreement, payable to
the order of the Trustee, or, if not so payable, endorsed to the order of,
or assigned to, the Trustee by the holder/payee thereunder without
recourse;
(f) originals of any extension, modification or waiver agreement(s)
relating to such Contract; and
(g) proof of maintenance of a Standard Hazard Insurance Policy for
the related Manufactured Home.
-4-
<PAGE>
In the case of any Land Secured Contract, the related Contract Documents
shall consist of the following documents in lieu of those listed in clause (c)
of the foregoing paragraph: (i) the original recorded Mortgage for the related
Real Property, with evidence of recordation noted thereon or attached thereto,
or a certified copy thereof issued by the appropriate recording office (or, if
the Mortgage is in the process of being recorded, a photocopy of the Mortgage,
which may be on microfilm or optical disk maintained by the Servicer in its
records separate from the other related Contract Documents); (ii) if the
Mortgage does not name the related Seller as mortgagee therein or beneficiary
thereof, an original recorded assignment or assignments of the Mortgage from the
Persons named as mortgagee in, or beneficiary of, such Mortgage, to the related
Seller, with evidence of recordation noted thereon or attached thereto, or a
certified copy of each such assignment issued by the appropriate recording
office (or, if such an original assignment is in the process of being recorded,
a photocopy of each such assignment, which may be on microfilm or optical disk
maintained by the Servicer in its records separate from the other related
Contract Documents); (iii) a copy of the power of attorney delivered by the
Seller to the Trustee in the event that recordation of such assignments becomes
necessary for foreclosure on the related Real Property by or on behalf of the
Trustee; and (iv) if such Land Secured Contract's original principal balance was
$40,000 or greater, a copy of the title search report and bring-down thereof (or
evidence of title insurance) with respect to the related Real Property.
"Contract File": With respect to any Contract, a file containing all of
the related Contract Documents.
"Contract Loan-to-Value Ratio": Means, (i) as to each Contract with
respect to which a lien on land is required for underwriting purposes, the
ratio, expressed as a percentage, of the principal amount of such Contract to
the sum of the purchase price of the home (including taxes, insurance and any
land improvements), the tax value or appraised value of the land and the amount
of any prepaid finance charges or closing costs that are financed; and (ii) as
to each other Contract, the ratio, expressed as a percentage, of the principal
amount of such Contract to the purchase price of the home (including taxes,
insurance and any land improvements) and the amount of any prepaid finance
charges or closing costs that are financed.
"Contract Rate": With respect to a Contract, the annual interest rate
required to be paid by an Obligor under the terms of such Contract.
"Contract Schedule": For any Series, the list attached to the related
Pooling and Servicing Agreement identifying each Contract assigned thereunder
(which may be presented together with any related Mortgage Loan Schedule in a
single Asset Schedule), which list shall (a) identify each Contract and (b) set
forth (or describe the method of determining) as to each such Contract (1) the
Cut-off Date Principal Balance thereof, (2) the amount of each Monthly Payment
due from the Obligor thereunder, (3) the Contract Rate thereof, (4) the original
term to maturity thereof, (5) the date of origination thereof, (6) the original
Contract Loan-to-Value Ratio thereof, (7) the state in which the related
Manufactured Home is located, (8) whether the related Manufactured Home is a
used, repossessed, new or transferred home, (9) whether the Contract is a Land
Secured Contract and (10) any other information specified in the related Pooling
and Servicing Agreement.
"Converted Loan": An Adjustable Rate Asset with respect to which the
Obligor has complied with the applicable requirements of the related Contract or
Mortgage Note to convert the related Asset Rate to a fixed rate of interest, and
as to which the Servicer has processed such conversion.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business under a
Pooling and Servicing Agreement shall be administered.
"Credit Insurer": An insurer under any Primary Mortgage Insurance Policy
or pool insurance policy for a Series.
"Custodian": For any Series, the Trustee or an agent of the trustee
identified in the related Pooling and Servicing Agreement, which agent shall
hold all or part of the Trustee Mortgage Loan Files for some or all of the
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<PAGE>
related Mortgage Loans.
"Cut-off Date": With respect to any Series, the date or dates (a) after
which all Monthly Payments due in respect of the Assets sold to the Trust (net
of Servicing Fees relating to such Assets) and (b) on and after which all
Principal Prepayments, Net Liquidation Proceeds and Repurchase Prices received
in respect of such Assets, are to be transmitted to the Certificate Account for
the benefit of the Holders of the Certificates. The Cut-off Date for a Series
shall be specified in the related Pooling and Servicing Agreement.
"Cut-off Date Principal Balance": As to any Asset, the original principal
amount of such Asset, minus the principal portion of all Monthly Payments due on
such Asset on or before the Cut-off Date and minus all other payments applied to
reduce such original principal amount before the Cut-off Date.
"Default": Any occurrence that is, or that with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Contract": A Contract (a) as to which any related Monthly
Payment has been delinquent and remains delinquent 90 days after the Due Date
therefor or (b) as to which the related Obligor has become bankrupt or
insolvent.
"Defect Discovery Date": With respect to an Asset, the date on which
either the Trustee or the Servicer first discovers a Qualification Defect
affecting the Asset.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of
such REO Property in a trade or business conducted by the Trust, in each
case other than through an Independent Contractor; PROVIDED, HOWEVER, that the
Servicer on behalf of the Trustee shall not be considered to Directly Operate an
REO Property solely because the Servicer on behalf of the Trustee establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or capital expenditures with
respect to such REO Property.
"Disqualified Organization": Either (a) the United States, (b) any state
or political subdivision thereof, (c) any foreign government, (d) any
international organization, (e) any agency or instrumentality of any of the
foregoing, (f) any organization (other than a cooperative described in section
521 of the Code) that is exempt from federal income taxation (including taxation
under the unrelated business taxable income provisions of the Code), (g) any
rural telephone or electrical service cooperative described in section
1381(a)(2)(C) of the Code, or (h) any other entity identified as a disqualified
organization by legislation enacted or administrative pronouncement in effect as
of the date of the most recent transfer of the related Residual Certificate. A
corporation will not be treated as an instrumentality of the United States or
any state or political subdivision thereof if all of its activities are subject
to tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such governmental unit.
"Distribution Account": As defined in Section 4.02 hereof.
"Distribution Date": Unless otherwise specified in the Pooling and
Servicing Agreement, the 15th day of any month, or the next Business Day after
such 15th day if such 15th day is not a Business Day, commencing in the month
following the Closing Date and ending on the date on which the Trust is
terminated.
"Due Date": With respect to any Asset, the date on which a Monthly
Payment is due on such Asset from the Obligor thereunder (without regard to any
grace period).
"Due Date Interest Shortfall": For any Asset that is prepaid in full or
liquidated on other than a Due Date for such Asset, the difference between (a)
the amount of interest that would have accrued on such Asset through the
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day preceding the Due Date next following the date of such prepayment or
liquidation had the Asset not been prepaid in full or liquidated (net of any
other administrative fees payable out of such interest had it accrued and been
paid) and (b) the amount of interest that actually accrued on such Asset prior
to the prepayment in full or liquidation thereof (net of an allocable portion of
any other administrative fees payable from interest payments on such Asset in
respect of the related Collection Period).
"Early Payment": As to any Asset and any Due Date on which the principal
and interest payments on such Asset made with respect to such Due Date (not
including any late fees) exceed the sum of the scheduled Monthly Payment for
such Asset and Due Date plus any unpaid Monthly Payments for previous Due Dates,
if the related Obligor has not sent written notice to the Servicer with such
payment asking that the amount by which such payment exceeds the Monthly Payment
then due be treated as a Principal Prepayment and the Servicer is unable to
determine the Obligor's intended treatment of such excess payment, the Early
Payment shall be the amount by which (1) payments of principal and interest on
such Asset made with respect to such Due Date exceed (2) the scheduled Monthly
Payment for such Asset on such Due Date plus any unpaid Monthly Payments for
previous Due Dates, but only to the extent that the amount of such excess is an
integral multiple of the amount of the scheduled Monthly Payment for such Due
Date. To the extent that the amount of such excess exceeds an integral multiple
of such scheduled Monthly Payment, the excess shall be deemed to be a Principal
Prepayment of such Asset.
"Eligible Account": (1) An account or accounts maintained with a Qualified
Bank, (2) any trust account maintained in the corporate trust department of a
financial institution subject to governmental regulatory authorities or (3) a
non-trust account maintained with the Trustee, so long as the Trustee's
commercial paper or short-term unsecured debt obligations are rated by each
Rating Agency in its highest applicable rating category (without regard
to "plus" or "minus" modifiers of such rating category); PROVIDED that the
Servicer shall move any funds in such account to another account which is an
Eligible Account pursuant to clause (1) or (2) of this definition within five
days after any downgrading of the Trustee's commercial paper or short-term
unsecured debt obligations below each Rating Agency's highest applicable rating
category (without regard to "plus" or "minus" modifiers of such rating category)
and shall not deposit funds into any account that is an Eligible Account
pursuant to this clause (3) if such deposit would cause the amount on deposit in
such account to exceed 20% of the aggregate unpaid principal balance of the
Certificates. Eligible Accounts may bear interest.
"Eligible Investments": Any one or more of the following obligations or
securities:
(a) direct obligations of, and obligations fully guaranteed by,
the United States of America;
(b) demand and time deposits in, negotiable certificates of deposit
of, bankers' acceptances issued by, or federal funds sold by, any
Qualified Bank;
(c) commercial paper of any Person other than OMI, the Seller or any
Affiliate of OMI or the Seller rated in the Rating Agency's highest
applicable rating category;
(d) repurchase agreements fully collateralized by possession of
obligations of the type specified in clause (a) above; PROVIDED, HOWEVER,
that investments in such repurchase agreements shall mature within three
days of the acquisition thereof and; PROVIDED FURTHER, that such
agreements shall be entered into with a Qualified Bank;
(e) money market accounts or money market funds rated in the highest
rating category of the Rating Agency for such money market funds; and
(f) money market accounts or money market mutual funds investing
primarily in obligations of the United States government, and further investing
exclusively in debt obligations, PROVIDED, HOWEVER, that such money market
accounts or money market mutual funds shall be rated in the highest rating
category sufficient to support the initial ratings assigned to a related Series
of Certificates.
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The foregoing notwithstanding, Eligible Investments that are acquired with funds
in the Certificate Account, the Distribution Account or any Reserve Fund shall
include only such obligations or securities that mature on or before the
Business Day immediately preceding the next Distribution Date. The Trustee may
not sell or convert an Eligible Investment if such sale or conversion would
result in a loss on the investment. In no event shall an instrument be an
Eligible Investment if such instrument evidences (1) a right to receive only
interest payments with respect to the obligations underlying such instrument or
(2) both principal and interest payments derived from obligations underlying
such instrument, if the interest and principal payments with respect to such
instrument provide a yield to maturity at the date of investment of greater than
120% of the yield to maturity at par of such underlying obligations.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA Restricted Certificates": With respect to any Series, any
Certificates of a Class that are subordinated to the Certificates of any other
Class of such Series with respect to the allocation of Writedown Amounts, or, if
the related Pooling and Servicing Agreement does not provide for the allocation
of Writedown Amounts, the Certificates designated as "ERISA Restricted
Certificates" in the related Pooling and Servicing Agreement.
"Event of Default": As defined in Section 7.01 hereof.
"FHA": The Federal Housing Administration.
"FHA Asset": An Asset that is insured by the FHA.
"FHA Insurance": As to any FHA Asset, FHA's agreement to reimburse the
owner of such Asset for the amount of any losses incurred upon the liquidation
of such Asset.
"FHLMC": Federal Home Loan Mortgage Corporation.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-B hereto
provided by the Trustee (or the Custodian) on or before the first anniversary of
the Closing Date pursuant to Section 2.03(c)(2) hereof.
"Final Scheduled Distribution Date": With respect to any Class of any
Series, the date specified as such in the related Pooling and Servicing
Agreement.
"FNMA": Federal National Mortgage Association.
"Fraud Loss": A loss incurred on a Contract or Mortgage Loan resulting
from a Credit Insurer's failure to pay a claim with respect to such Contract or
Mortgage Loan on the grounds of fraud in connection with the origination of the
Contract or Mortgage Loan or on the grounds of fraud, dishonesty or
misrepresentation in connection with the application for any insurance obtained
with respect to such Contract or Mortgage Loan.
"Independent": When used with respect to any specified Person, another
Person who (a) is in fact independent of OMI, the Seller, the Servicer, any
obligor upon the Certificates or any Affiliate of OMI, the Seller or the
Servicer or such obligor, (b) does not have any direct financial interest or any
material indirect financial interest in OMI, the Seller or the Servicer or in
any such obligor or in an Affiliate of OMI, the Seller or the Servicer or such
obligor, and (c) is not connected with OMI, the Seller or the Servicer or any
such obligor as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. Whenever it is provided herein
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by OMI, the Seller or the Servicer in
the exercise of reasonable care by OMI, the Seller or the Servicer, as
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the case may be, and approved by the Trustee, and such opinion or certificate
shall state that the Person executing the same has read this definition and that
such Person is independent within the meaning thereof.
"Independent Contractor": Either (a) any Person (other than the Servicer)
that would be an "independent contractor" with respect to the Trust within the
meaning of Section 856(d)(3) of the Code if the Trust were a real estate
investment trust (except that, in applying that Section, more than 35% of the
outstanding principal balance of any Class shall be deemed to be more than 35%
of the certificates of beneficial interest of the Trust), so long as the Trust
does not receive or derive any income from such Person, the relationship between
such Person and the Trust is at arm's length and such Person is not an employee
of the REMIC, the Trustee or the Servicer, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (b) any other Person (including the
Servicer) upon receipt by the Trustee of an Opinion of Counsel, the expense of
which shall constitute a Servicing Advance if borne by the Servicer, to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-A hereto
provided by the Trustee (or the Custodian) on the Closing Date pursuant to
Section 2.03(c)(1) hereof.
"Initial Value": As defined in Section 3.16(b) hereof.
"Insurance Policy": Any insurance policy covering any Asset (or the
related Manufactured Home or Mortgaged Property), including, without limitation,
any Standard Hazard Insurance Policy or Primary Mortgage Insurance Policy or FHA
Insurance or VA Guaranty.
"Insurance Proceeds": Amounts paid or payable (as the context requires)
under any Insurance Policy, to the extent such amounts are not applied to the
restoration or repair of the Manufactured Home or Mortgaged Property in respect
of which such amounts were paid.
"Insured Expenses": Expenses incurred by the Servicer in connection with a
Contract or Mortgage Loan under which the Obligor is in default, which expenses
are covered by a Standard Hazard Insurance Policy and are paid by an insurer
under any such policy.
"Interest Accrual Period": With respect to any Distribution Date for a
Series, the calendar month immediately preceding the calendar month in which
such Distribution Date occurs, which period will be assumed to consist of 30
days for the purpose of calculating any interest amounts accrued on the
Certificates of such Series.
"Issuing REMIC": If provided for in a Pooling and Servicing Agreement, the
REMIC composed primarily of Regular Interests in the Pooling REMIC, together
with the Distribution Account.
"Land Secured Contract": A Contract secured at origination by a parcel of
real estate in addition to a Manufactured Home.
"Liquidated Loan": A Defaulted Contract or defaulted Mortgage Loan as to
which all amounts that the Servicer expects to recover through the date of
disposition of the related Manufactured Home or Mortgaged Property have been
received.
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"Liquidation Expenses": All reasonable, out-of-pocket costs and expenses
(exclusive of the Servicer's overhead costs) incurred by the Servicer in
connection with liquidation of any Asset or disposition of any related Repo
Property or REO Property, including, but not limited to, the cost of all notices
sent in connection with such liquidation, costs and expenses incurred in
connection with preparation and recordation of assignments of Mortgages relating
to Land Secured Contracts, expenses, including reasonable attorney's fees,
incurred in connection with the commencement and pursuit of Proceedings against
Obligors or guarantors or sureties of Obligors or in the pursuit of foreclosure
or other similar remedies, expenses incurred in repossessing and refurbishing
the related Manufactured Home or preparing the related REO Property for sale and
sales commissions paid in connection with the resale of the related Manufactured
Home or REO Property.
"Liquidation Proceeds": Amounts received and retained in connection with
the liquidation of Liquidated Loans, whether through foreclosure thereon or
repossession and resale of the related Manufactured Home, foreclosure on the
related Mortgaged Property or otherwise (including Insurance Proceeds collected
in connection with such liquidation).
"Loan-to-Value Ratio": The Contract Loan-to-Value Ratio or the Mortgage
Loan-to-Value Ratio of an Asset, as applicable.
"Manufactured Home": A unit of manufactured housing (within the meaning of
Code section 25(e)(10)) together with all accessions thereto securing the
indebtedness of the Obligor under any Contract or constituting a portion of the
Mortgaged Property securing the indebtedness of the Obligor under any Mortgage
Loan.
"Monthly Payment": With respect to any Asset, the scheduled monthly
payment of principal and interest thereon due in any month under the terms
thereof.
"Mortgage": A written instrument creating a valid first lien on Real
Property or a Mortgaged Property, in the form of a mortgage, deed of trust, deed
to secure debt or security deed, including any riders or addenda thereto.
"Mortgage Insurer": The insurance company or companies which issue any
Primary Mortgage Insurance Policies with respect to any Mortgage Loans.
"Mortgage Loan": A mortgage loan (not including any Land Secured Contract)
secured by a first lien on a one- to four-family residential real property
(which may be the real estate to which a Manufactured Home is deemed by the
Seller to have become permanently affixed as of the Cut-off Date for the related
Series).
"Mortgage Loan Documents": With respect to each Mortgage Loan, the
following documents:
(a) the original Mortgage Note bearing a complete chain of
endorsements, if necessary, from the initial payee thereunder to the
Seller, with a further endorsement without recourse from the Seller in
blank or to the Trustee or its Custodian, in a form specified in the
related Sales Agreement, together with all related riders and addenda and
any related surety or guaranty agreement, power of attorney and buydown
agreement;
(b) the original recorded Mortgage (or a copy thereof certified to
be a true and correct reproduction of the original thereof by the
appropriate public recording office) with evidence of recordation noted
thereon or attached thereto, or, if the Mortgage is in the process of
being recorded, a photocopy of the Mortgage, certified by an officer of
the related Seller or the originator, the related title insurance company,
the related closing/settlement/escrow agent or the related closing
attorney to be a true and correct copy of the Mortgage submitted for
recordation;
(c) the original recorded assignment of the Mortgage from the
related Seller to the Trustee or
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its Custodian, in a form specified in the related Sales Agreement (or a
copy thereof certified to be a true and correct reproduction of the
original thereof by the appropriate public recording office) with evidence
of recordation noted thereon or attached thereto, or, if the assignment is
in the process of being recorded, a photocopy of the assignment, certified
by an officer of the Seller to be a true and correct copy of the
assignment submitted for recordation;
(d) each original recorded intervening assignment of the Mortgage as
is necessary to show a complete chain of title from the initial mortgagee
(or beneficiary, in the case of a deed of trust) to the related Seller (or
a copy of each such assignment certified to be a true and correct
reproduction of the original thereof by the appropriate public recording
office) with evidence of recordation noted thereon or attached thereto,
or, if an assignment is in the process of being recorded, a photocopy of
the assignment, certified by an officer of the Seller to be a true and
correct copy of the assignment submitted for recordation;
(e) an original Title Insurance Policy or, if such policy has not
yet been issued or is otherwise not available, (1) a written commitment to
issue such policy issued by the applicable title insurance company and an
officer's certificate of the related Seller certifying that all of the
requirements specified in such commitment have been satisfied, (2) a
preliminary title report if the related Mortgaged Property is located in
a state in which preliminary title reports are acceptable evidence of
title insurance or (3) a certificate of an officer of the Seller
certifying that a Title Insurance Policy is in full force and effect as
to the related Mortgage and that such Title Insurance Policy is freely
assignable to and will inure to the benefit of the Trustee (subject
to recordation of the related Assignment of Mortgage);
(f) for each Mortgage Loan identified in the related Agreement as
having in place a Primary Mortgage Insurance Policy, a Primary Mortgage
Insurance Policy or a certificate of primary mortgage insurance issued by
the related Mortgage Insurer or its agent indicating that such a policy is
in effect as to such Mortgage Loan or, if neither a policy nor a
certificate of insurance from the related Mortgage Insurer is available, a
certificate of an officer of the related Seller certifying that a Primary
Mortgage Insurance Policy is in effect as to such Mortgage Loan;
(g) each related assumption agreement, modification, written
assurance or substitution agreement, if any; and
(h) proof of the maintenance of a Standard Hazard Insurance Policy
(and a flood insurance policy, if applicable) as to the related Mortgaged
Property.
"Mortgage Loan-to-Value Ratio": Means, as to a Mortgage Loan, the ratio,
expressed as a percentage, of the principal amount of such Mortgage Loan at the
time of determination, to either (i) the sum of the appraised value of the land
and improvements, and the amount of any prepaid finance charges or closing costs
that are financed or (ii) the sum of the purchase price of the home (including
taxes, insurance and any land improvements), the appraised value of the land and
the amount of any prepaid finance charges or closing costs that are financed.
"Mortgage Loan Schedule": For any Series, the list attached to the related
Pooling and Servicing Agreement identifying each Mortgage Loan assigned
thereunder (which may be presented together with any related Contract Schedule
in a single Asset Schedule), which list shall (a) identify each Mortgage Loan
and (b) set forth (or describe the method of determining) as to each such
Mortgage loan (1) the Cut-off Date Principal Balance thereof, (2) the amount of
each Monthly Payment, (3) the Mortgage Rate thereof, (4) the original term to
maturity thereof, (5) the date of origination thereof, (6) the original Mortgage
Loan-to-Value Ratio thereof, (7) the state in which the related Mortgaged
Property is located, and (8) any other information as may be reasonably
requested by the Trustee prior to the Closing Date.
"Mortgage Note": A manually executed written instrument evidencing a
Mortgagor's promise to repay a stated sum of money, plus interest, to the holder
of such instrument on or before a specific date according to a
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schedule of principal and interest payments.
"Mortgage Rate": With respect to each Mortgage Loan, the interest rate
specified in the related Mortgage Note.
"Mortgaged Property": The mortgaged property securing a Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
"Net Insurance Proceeds": With respect to any Asset, Insurance Proceeds
received with respect thereto net of (a) any Insured Expenses incurred in
connection therewith, (b) all reasonable out-of-pocket expenses incurred by the
Servicer in connection with the collection of such Insurance Proceeds and (c)
the amount of any Advances made by the Servicer or any other entity with respect
to such Asset and not previously reimbursed to the Servicer or such other entity
as of the time of the Servicer's receipt of such Insurance Proceeds. Amounts
received by the Servicer as Net Insurance Proceeds will be treated for
accounting purposes as payments received on Assets.
"Net Liquidation Proceeds": With respect to any Asset, the amount of
Liquidation Proceeds received with respect thereto (including any Net Insurance
Proceeds recovered in connection with the liquidation of the related
Manufactured Home or Mortgaged Property) net of the amount of any Liquidation
Expenses incurred and not previously reimbursed to the Servicer or such other
entity as of the time of the liquidation of such Asset. Amounts received by the
Servicer as Net Liquidation Proceeds will be treated for accounting purposes as
payments received on Assets.
"Net Rate": As to any Asset, the applicable Asset Rate minus the
Servicing Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed, modified or extended on behalf of the Trust
(if the Trustee, or the Servicer or its agent, has the right to renegotiate the
terms of such lease).
"Non-Recoverable Advance": As to any Advance that has not yet been made,
any portion of the amount of such prospective Advance which the Servicer
reasonably determines would not ultimately be recoverable from Related Proceeds.
As to any Advance that has been made by the Servicer, any portion of the amount
of such Advance that has subsequently been determined by the Servicer to be not
ultimately recoverable from Related Proceeds. In determining whether an Advance
is or would be a Non-Recoverable Advance, the Servicer need not take into
account the possibility that it might recover any amounts as the result of a
deficiency judgment against the related Obligor.
"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860(G)-3(a)(1) (I.E., a person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, (c) an estate that is subject to United States federal income tax
regardless of the source of its income, or (d) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries have the authority to
control all substantial decisions of the trust) who would be subject to United
States income tax withholding pursuant to section 1441 or 1442 of the Code on
income derived from a Residual Interest.
"OAC": Oakwood Acceptance Corporation, a North Carolina corporation.
"Obligor": A person who is indebted under a Contract or who has acquired a
Manufactured Home subject to a Contract or a person who is the Mortgagor or
borrower under a Mortgage Loan or who has acquired a Mortgaged Property subject
to a Mortgage Loan.
"Obligor Bankruptcy Loss": With respect to any Distribution Date as to any
Asset that was the subject of a
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Principal Cramdown during the preceding Prepayment Period, the related Principal
Cramdown Amount.
"Officer": With respect to any corporation, the Chairman of the Board of
Directors, the President, any Vice President or Assistant Vice President, the
Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer of
such corporation (or, in the case of the Trustee, any trust officer thereof);
with respect to any partnership, the designated managing partner, if any, who
has been granted authority by the partnership agreement of such partnership to
bind the partnership by his or her signature, or, in any other case, any general
partner of the partnership; with respect to any bank or trust company acting as
trustee of an express trust or as custodian, any trust officer or authorized
officer thereof.
"Officer's Certificate": For any Person, a certificate that has been
signed on behalf of that Person by an Officer of that Person or any other
individual authorized to execute the certificate.
"Opinion of Counsel": A written opinion of counsel, which counsel is
satisfactory to the Servicer and the Trustee. Whenever an Opinion of Counsel is
required hereunder, the renderer of such Opinion may rely on other Opinions of
Counsel. Any Opinion of Counsel relating to tax matters must be an opinion of
Independent counsel.
"OMI": Oakwood Mortgage Investors, Inc., a North Carolina corporation.
"Outstanding": (a) With respect to the Certificates, as of any date of
determination, "Outstanding" refers to all Certificates theretofore executed and
delivered under the Pooling and Servicing Agreement except:
(1) Certificates theretofore canceled by the Certificate Registrar
or delivered to the Certificate Registrar for cancellation;
(2) Certificates or portions thereof for which money in the amount
necessary for the making of a final distribution on such Certificates has
been theretofore deposited with the Trustee or any Paying Agent in trust
for the Holders of such Certificates; PROVIDED, that if such Certificates
are to be retired because of termination of the Trust at the option of the
Servicer, notice of such optional termination has been duly given pursuant
to the Pooling and Servicing Agreement;
(3) Certificates in exchange for which other Certificates have been
executed and delivered pursuant to Section 5.04 hereof; and
(4) Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates have been issued pursuant to Section 5.07
hereof unless proof satisfactory to the Trustee has been presented at or
before the time that the determination of those Certificates that are
Outstanding is made that any such Certificates are held by a holder in due
course.
(b) With respect to the Assets as of any date, "Outstanding" refers to
Assets with unpaid principal balances greater than zero and that have not
previously been purchased or repurchased pursuant to Section 2.06 hereof or
become Liquidated Loans.
"Outstanding Certificate Writedown Amount": With respect to any Class of
Certificates, the aggregate amount of all Writedown Amounts that have been
allocated to such Class since the Closing Date for the related Series, minus any
amounts that have been distributed on such Class in reduction of such aggregate
amount in accordance with the related Pooling and Servicing Agreement.
"P&I Advance": As defined in Section 3.04(b) hereof.
"Pass-Through Rate": With respect to any Class of Certificates, the annual
rate at which interest accrues on the Certificates of such Class, which rate is
specified or described for each Class in the related Pooling and Servicing
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Agreement.
"Paying Agent": Any Person authorized by OMI and the Trustee to
distribute principal or interest on any Certificates on behalf of the Trustee
and appointed pursuant to Section 5.09 hereof.
"Percentage Interest": With respect to a Certificate to which an initial
principal amount is assigned as of the Closing Date, the portion of the Class of
which such Certificate is a part evidenced by such Certificate, expressed as a
percentage, the numerator of which is the denomination represented by such
Certificate and the denominator of which is the initial Certificate Principal
Balance of such Class. With respect to a Certificate to which an initial
principal balance is not assigned as of the Closing Date, the portion of the
Class of which such Certificate is a part evidenced by such Certificate,
expressed as a percentage stated on the face of such Certificate.
"Permitted Encumbrances": In respect of any Mortgaged Property or Real
Property:
(a) the lien of current real property taxes and assessments
not yet due and payable;
(b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the related originator and referred to
or otherwise considered in the appraisal made for the originator;
and
(c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property
or Real Property.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds in which such plans, accounts, annuities or arrangements are
invested, that are described in or subject to the Plan Asset Regulations, ERISA
or corresponding provisions of the Code.
"Plan Asset Regulations": The Department of Labor regulations set forth
in 29 C.F.R. ss. 2510.3-101.
"Plan Investor": A Plan, a Person acting on behalf of a Plan or a Person
using the assets of a Plan.
"Pool Scheduled Principal Balance": For any Series, on any Distribution
Date, the aggregate of the Scheduled Principal Balances, immediately prior to
the beginning of the related Collection Period, of the related Assets that were
Outstanding at the beginning of such Collection Period, without giving effect to
any Principal Prepayments, Net Liquidation Proceeds or Repurchase Prices
received (or Realized Losses incurred) on the day preceding the beginning of
such Collection Period, plus the aggregate of the principal components of any
Monthly Payments that were due at or prior to the beginning of such Collection
Period on such Assets, but which Monthly Payments were not collected from a
related Obligor or advanced by the Servicer and which were not reflected in a
corresponding reduction in the aggregate Certificate Principal Balance of the
related Certificates on the related Distribution Date. The Pool Scheduled
Principal Balance as of any date of determination that is not a Distribution
Date shall be the Pool Scheduled Principal Balance for the next upcoming
Distribution Date.
"Pooling and Servicing Agreement": A Pooling and Servicing Agreement among
OMI, OAC and a Trustee, relating to the issuance of Certificates of a Series,
which shall incorporate these Standard Terms by reference.
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"Pooling REMIC": If provided for in a Pooling and Servicing Agreement,
the REMIC consisting primarily of the related Assets.
"Pooling REMIC Regular Interest": A Regular Interest in a Pooling REMIC.
"Prepayment Period": With respect to each Distribution Date, the calendar
month immediately preceding the calendar month in which such Distribution Date
occurs.
"Primary Mortgage Insurance": The insurance provided under any Primary
Mortgage Insurance Policy.
"Primary Mortgage Insurance Policy": A primary mortgage insurance policy,
if applicable, covering certain conventional Mortgage Loans for which the
initial Mortgage Loan-to-Value Ratios exceeded 80%.
"Principal Cramdown" means, as to any Asset, either (a) a decree by a
bankruptcy court to the effect that the portion of such Asset that is secured by
the underlying Manufactured Home or Mortgaged Property is less than its Unpaid
Principal Balance due to the fact that the value of such Manufactured Home or
Mortgaged Property is less than such Unpaid Principal Balance or (b) the
permanent forgiveness by a bankruptcy court of some or all of the Unpaid
Principal Balance owed by the related Obligor.
"Principal Cramdown Amount" means, with respect to any Prepayment Period
as to any Asset that has been the subject of a Principal Cramdown, the amount by
which (a) the Unpaid Principal Balance of such Asset exceeds (b) as applicable,
depending upon the type of Principal Cramdown that was applied to such Asset,
either (1) the portion of such Unpaid Principal Balance that remains secured by
the related Manufactured Home or Mortgaged Property after taking the related
Principal Cramdown into account or (2) the Unpaid Principal Balance after taking
into account the permanent forgiveness of debt ordered by the bankruptcy court
in connection with the related Principal Cramdown.
"Principal Distribution Amount": For any Series, except as otherwise
defined in the related Pooling and Servicing Agreement, on any Distribution Date
other than the Distribution Date that is the Termination Date, the sum of the
following amounts: (a) the sum of the principal components of all Monthly
Payments scheduled to be made on the Due Date occurring during the related
Collection Period on the related Assets that were Outstanding at the opening of
business on such Due Date (regardless of whether such Monthly Payments were
received by the Servicer from the related Obligors), not including any Monthly
Payments due on Liquidated Loans or repurchased Assets; (b) the sum of the
amounts of all Principal Prepayments received by the Servicer on the related
Assets during the related Prepayment Period; (c) with respect to any related
Asset that became a Liquidated Loan during the related Prepayment Period, the
Scheduled Principal Balance thereof on the date of liquidation thereof
(determined without giving effect to such liquidation); and (d) with respect to
any related Asset that was purchased or repurchased by the Servicer, the Seller
or OMI pursuant to Section 2.06 hereof during the related Prepayment Period, the
Scheduled Principal Balance thereof on the date of purchase or repurchase
thereof (determined without giving effect to such purchase or repurchase).
"Principal Prepayment": With respect to any Asset, a payment attributable
to principal of such Asset, other than a scheduled principal payment on such
Asset, which may be received (a) from the related Obligor together with a
regular Monthly Payment, (b) from the related Obligor together with an Early
Payment, or (c) in the form of Net Insurance Proceeds received by the Servicer
otherwise than as a component of Liquidation Proceeds.
"Private Certificate": Any Class of Certificates of a Series designated
as such in the related Pooling and Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
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"Qualification Defect": With respect to an Asset, (a) a defective document
in the related Asset File, (b) the absence of a document in such Asset File, or
(c) the breach of any representation, warranty, or covenant with respect to the
Asset made by OMI, the Seller or the Servicer, but only if, as a result of any
of the foregoing, the affected Asset would cease to qualify as a "qualified
mortgage" for purposes of the REMIC Provisions. With respect to a REMIC Regular
Interest or a participation certificate described in Code section 860G(a)(3),
the failure to qualify as a "qualified mortgage" for purposes of the REMIC
Provisions.
"Qualified Bank": Any domestic bank not affiliated with the Seller or OMI
(1) having long-term unsecured debt obligations rated in one of the two highest
rating categories (without modifiers) of each Rating Agency or short-
term unsecured debt obligations rated in each Rating Agency's highest applicable
rating category, (2) having commercial paper or short-term unsecured debt
obligations rated in each Rating Agency's highest applicable rating category, or
(3) that is otherwise acceptable to each applicable Rating Agency.
"Qualified Institutional Buyer": Any "qualified institutional buyer" as
defined in clause (a)(1) of Rule 144A.
"Qualified Insurer": Any insurance company or surety or bonding company
licensed to do business and issue insurance in all relevant jurisdictions
(including, in the case of an insurer under a Standard Hazard Insurance Policy,
the jurisdiction in which each Manufactured Home or Real Property or Mortgaged
Property covered by such policy is located).
"Qualified Substitute Asset": An Asset substituted by OMI or the Seller
for a Replaced Asset which must, on the date of such substitution, (a) have an
Unpaid Principal Balance not greater than (and not more than $10,000 less than)
the Unpaid Principal Balance of the Replaced Asset, (b) have an Asset Rate not
less than (and not more than one percentage point in excess of) the Asset Rate
of the Replaced Asset, (c) have a Net Rate equal to the Net Rate of the Replaced
Asset, (d) have a remaining term to maturity not greater than (and not more than
one year less than) that of the Replaced Asset, (e) have a Loan-to-Value Ratio
as of the first day of the month in which the substitution occurs equal to or
less than the Loan-to-Value Ratio of the Replaced Asset as of such date (in each
case, using the appraised value at origination, and after taking into account
the Monthly Payment due on such date), and (f) comply with each representation
and warranty set forth in Section 2.05 hereof and in the related Sales
Agreement. In the event that more than one Asset is substituted for a Replaced
Asset, the amount described in clause (a) hereof shall be determined on the
basis of aggregate Unpaid Principal Balances, the rates described in clauses (c)
(i), (ii), and (iii) hereof shall be determined on the basis of weighted average
Asset Rates and Net Rates, as the case may be, and the term described in clause
(d) hereof shall be determined on the basis of weighted average remaining terms
to maturity, provided that no Qualified Substitute Asset may have an original
term to maturity beyond the latest original term to maturity of any Asset
assigned to the Trust on the Closing Date. In the case of a Trust for which a
REMIC election has been or will be made, a Qualified Substitute Asset also shall
satisfy the following criteria as of the date of its substitution for a Replaced
Asset: (A) the Obligor shall not be 30 or more days delinquent in payment on the
Qualified Substitute Asset, (B) the Asset File for such Asset shall not contain
any material deficiencies in documentation, and shall include an executed
Contract or Mortgage Note, as applicable, and, if it is a Land Secured Contract
or a Mortgage Loan, a recorded Mortgage; (C) the Loan-to-Value Ratio of the
Asset must be 125% or less either (1) on the date of origination of the Asset,
or, if any of the terms of such Asset were modified other than in connection
with a default or imminent default on such Asset, on the date of such
modification, or (2) on the date of the substitution, based on an appraisal
conducted within the 60 day period prior to the date of the substitution; (D) no
property securing such Asset may be subject to foreclosure, bankruptcy, or
insolvency proceedings; and (E) such Asset, if a Land Secured Contract or a
Mortgage Loan, must be secured by a valid first lien on the related Real
Property or Mortgaged Property. In addition to all other requirements stated in
this paragraph, any Replaced Asset that is a Mortgage Loan may only be replaced
by another Mortgage Loan.
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"Rating Agency": As to any Series, any nationally recognized statistical
rating agency, or its successor, that on the Closing Date rated one or more
Classes of the Certificates of such Series at the request of OMI. If such agency
or a successor is no longer in existence, "Rating Agency" shall be such
nationally recognized statistical rating agency, or other comparable Person,
designated by OMI, notice of which designation shall be given to the Trustee and
the Servicer. References herein to any rating category of a Rating Agency shall
mean such rating category without regard to any plus or minus or numerical
designation.
"Real Property": Land and improvements thereon subject to the lien of the
Mortgage securing a Land Secured Contract.
"Realized Interest Loss": A shortfall in interest resulting from the
receipt of Liquidation Proceeds in respect of a Contract or Mortgage Loan in an
amount that is insufficient to pay accrued and unpaid interest thereon.
"Realized Loss": Either (a) with respect to any Liquidated Loan, (1) the
Unpaid Principal Balance of the Liquidated Loan, plus accrued and unpaid
interest on such Liquidated Loan, plus amounts reimbursable to the Servicer for
previously unreimbursed Servicing Advances, minus (2) Net Liquidation Proceeds
collected in respect of the Liquidated Loan or (b) with respect to any Asset
that has been the subject of a Principal Cramdown, an Obligor Bankruptcy Loss
with respect to such Asset.
"Record Date": With respect to each Distribution Date, the last Business
Day of the month immediately preceding the month in which such Distribution
Date occurs.
"Recordation Report": A report substantially in the form of Exhibit 3
hereto provided by the Trustee (or the Custodian) pursuant to Section 2.03(c)(5)
hereof identifying those Mortgage Loans for which a Mortgage or an Assignment
remains unrecorded.
"Regular Certificate": A Certificate other than a Residual Certificate
and that is a Regular Interest in a REMIC or a combination of Regular Interests
in a REMIC.
"Regular Interests": Interests in a REMIC that are designated as "regular
interests" under the REMIC Provisions.
"Regulations": The regulations promulgated under the Code by the Treasury.
"Related Proceeds': As defined in Section 3.04(c) hereof.
"REMIC": A "real estate mortgage investment conduit," within the meaning
of the REMIC Provisions. As to a particular Trust, those assets of the Trust as
to which an election is to be made to be treated as a "real estate mortgage
investment conduit," within the meaning of section 860D of the Code. A REMIC
generally is an elective entity for federal income tax purposes that consists of
a fixed pool of qualifying assets in which investors hold multiple classes of
interests. In order to be treated as a REMIC, such pool will be required to meet
ongoing qualification requirements provided by the Code, Regulations, and
binding pronouncements of the Internal Revenue Service, as in effect from time
to time.
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"REMIC Loan-to-Value Ratio": The quotient, expressed as a percentage,
obtained by dividing (a) the original unpaid principal balance of an Asset, plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or PARI PASSU with, such Asset by
(b) the sale price of the Manufactured Home or Mortgaged Property that secures
such Asset. Alternatively, the REMIC Loan-to- Value Ratio may be determined by
dividing (a) the unpaid principal balance of an Asset as of the Startup Day plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or PARI PASSU with, such Asset by
(b) the fair market value of the Manufactured Home or Mortgaged Property that
secures such Asset on the Startup Day.
"REMIC Provisions": Provisions of the Code relating to real estate
mortgage investment conduits, which appear at sections 860A through 860G of the
Code, related Code provisions, and Regulations (whether in proposed, temporary
or final form), announcements and rulings thereunder, as the foregoing may be in
effect from time to time.
"Remittance Amount": With respect to any Remittance Date and related
Distribution Date, the sum of the following amounts:
(a) the Monthly Payment that was due on each Outstanding Asset on
the Due Date occurring in the related Collection Period and that was
received by the Servicer from the related Obligor;
(b) all amounts received during the related Collection Period in
respect of any Asset that was Outstanding at the beginning of the related
Collection Period representing late payments of principal and interest due
on such Asset prior to the Due Date occurring in the related Collection
Period, to the extent such amounts exceed outstanding unreimbursed P&I
Advances made by the Servicer with respect to such Asset;
(c) each Principal Prepayment (whether full or partial) of any Asset
that was Outstanding at the beginning of the related Prepayment Period
received by the Servicer during the related Prepayment Period;
(d) any amounts received by the Servicer during the related
Prepayment Period as Net Liquidation Proceeds with respect to any Asset
that was Outstanding at the beginning of the related Prepayment Period
(net of outstanding unreimbursed P&I Advances made by the Servicer with
respect to such Asset); and
(e) all amounts deposited into the Certificate Account during the
related Prepayment Period as a result of any purchase or repurchase of any
Asset pursuant to Section 2.06 hereof (net of outstanding unreimbursed P&I
Advances made by the Servicer with respect to such Asset).
"Remittance Date": The Business Day preceding each Distribution Date,
which is the date by which funds must be remitted by the Servicer from the
Certificate Account to the Distribution Account or, if the Certificate Account
is maintained by the Trustee, the date on which the Servicer is to notify the
Trustee of the related Remittance Amount, in either case pursuant to Section
3.07(b) hereof.
"Remittance Report": As defined in Section 4.01 hereof.
"Rents From Real Property": With respect to any REO Property, gross
income of the character described in Code section 856(d) and Treasury
regulations thereunder.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf of
the Certificateholders through foreclosure or deed-in-lieu of foreclosure, as
further described in Section 3.09 hereof.
"REO Property Disposition": The receipt by the Servicer of Insurance
Proceeds and other payments and
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recoveries (including Liquidation Proceeds) which the Servicer recovers from the
sale or other disposition of an REO Property.
"Replaced Asset": An Asset replaced or to be replaced by a Qualified
Substitute Asset.
"Repo Property": A Manufactured Home (and any related Real Property)
acquired by the Servicer on behalf of the Trust pursuant to a repossession,
foreclosure, or similar proceeding in connection with a Defaulted Contract.
"Repurchase Price": With respect to any Asset to be purchased or
repurchased pursuant to Section 2.05 hereof, an amount equal to the Unpaid
Principal Balance of such Asset as of the close of business on the date of such
purchase or repurchase, together with all accrued and unpaid interest thereon to
the end of the Collection Period in which such purchase or repurchase occurs.
"Repurchaser": Any Person that repurchases or purchases a Contract from
the Trust pursuant to Section 2.06 hereof.
"Request for Release": A release signed by an Officer of the Servicer in
the form attached hereto as Exhibit 4.
"Reserve Fund": Any fund designated as a "Reserve Fund" in a Pooling and
Servicing Agreement.
"Residual Certificate": Any one of the Classes of Certificates of a
Series designated as such in the related Pooling and Servicing Agreement.
"Residual Interest": An interest in a REMIC that is designated as a
"residual interest" under the REMIC Provisions.
"Residual Majority": At any time, the Holders of a majority (by
Percentage Interests) of the Residual Certificates.
"Residual Transferee Agreement": A certification and agreement required
to be executed and delivered by the prospective transferee of a Residual
Certificate pursuant to Section 5.05(c) hereof, which must be substantially in
the form of Exhibit 8 hereto.
"RESPA": The Real Estate Settlement Procedures Act of 1974, as amended.
"Rule 144A": Rule 144A promulgated by the Securities and Exchange
Commission, as the same may be amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of
Exhibit 5 hereto.
"Rule 144A Certificates": Any Class of Certificates of a Series
designated as such in the related Pooling and Servicing Agreement.
"Sales Agreement": A Sales Agreement pursuant to which OAC (or another
Seller) sells Contracts and/or Mortgage Loans to OMI for inclusion in a Trust.
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"Scheduled Principal Balance": As of any date of determination with
respect to any Contract, Repo Property, Mortgage Loan or REO Property, (a) the
Cut-off Date Principal Balance of such Contract or Mortgage Loan (or of the
related Contract or Mortgage Loan, in the case of a Repo Property or REO
Property) minus (b) the sum of (1) the principal components of any Monthly
Payments due on such Contract or Mortgage Loan (or on the related Contract or
Mortgage Loan, in the case of a Repo Property or REO Property) after the related
Cut-off Date and on or before such date of determination (regardless of whether
such Monthly Payments were received from the related Obligor) plus (2) all
principal prepayments received by the Servicer on such Contract or Mortgage Loan
(or on the related Contract or Mortgage Loan, in the case of a Repo Property or
REO Property) (including the principal portion of Net Liquidation Proceeds and
the principal portion of all amounts paid by the Seller or another party to
repurchase such Contract or Mortgage Loan) on or after the Cut-off Date and on
or prior to the end of the Prepayment Period preceding the date of
determination, plus (3) all Realized Losses incurred on such Contract or
Mortgage Loan (or the related Contract or Mortgage Loan, in the case of a Repo
Property or REO Property) on or after the Cut-off Date and on or prior to such
date of determination.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": As to any Contract or Mortgage Loan included in the Trust Estate
for a Series, the entity that sold such Contract or Mortgage Loan to OMI under a
Sales Agreement, which will be OAC unless otherwise specified in the related
Pooling and Servicing Agreement. For purposes of the definitions of "Contract
Documents" and "Mortgage Loan Documents" herein, documents (including, without
limitation, certificates of title, UCC filing instruments, assignments and
endorsements) indicating assignment or endorsement to, or the existence of a
security interest in, a name that is a registered trade name of the Seller in
the relevant jurisdiction shall satisfy any requirement of these Standard Terms
that such documents reflect the name of the "Seller."
"Series": A separate Series of Certificates issued pursuant to a Pooling
and Servicing Agreement, which Series may, as provided therein, be divided into
two or more Classes.
"Servicer": OAC, as servicer of any of the Assets under any Pooling and
Servicing Agreement, and its permitted successors and assigns thereunder.
"Servicer Contract File": As to each Contract, a file maintained by the
Servicer that contains the related loan application and credit report, any
correspondence relating to the Contract, and all other instruments, documents,
papers, ledger cards, accounting records, and computer print-outs maintained by
the Servicer now or hereafter in connection with the servicing of the Contracts,
which may be maintained on microfilm or on computer- readable optical disk or on
any other medium selected by the Servicer.
"Servicer Custodial Certification": A certification executed by an
Officer of the Servicer substantially in the form of Exhibit 1 hereto.
"Servicer File": As to any Asset, the related Servicer Contract File or
Servicer Mortgage Loan File, as applicable.
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"Servicer Mortgage Loan File": As to each Mortgage Loan, a file maintained
by the Servicer that contains (1) an original Standard Hazard Insurance Policy
(and flood insurance policy, if required pursuant to Section 3.16 hereof)
relating to the underlying Mortgaged Property or a certificate of insurance
issued by the insurer or its agent indicating that a Standard Hazard Insurance
Policy (and a flood insurance policy, if required pursuant to Section 3.16
hereof) is in effect with respect to such Mortgaged Property, (2) originals or
copies of all documents submitted to a Mortgage Insurer for credit and property
underwriting approval, (3) the originals of all RESPA and Regulation Z
disclosure statements executed by the related Mortgagors, (4) the appraisal
report made in connection with the origination of the Mortgage Loan, (5) the
settlement statement for the purchase and/or refinancing of the underlying
Mortgaged Property by the related Mortgagor under the related Mortgage Note and
Mortgage, (6) the originals of any tax service contracts, (7) documentation
relating to any approvals by the Servicer of any modifications of the original
related Mortgage Loan Documents and any releases of collateral supporting the
related Mortgage Loan, together with copies of the documentation effecting any
such modifications or releases, (8) collection notices or form notices sent to
the related Mortgagor, (9) foreclosure correspondence and legal notifications,
if applicable, (10) water and irrigation company stock certificates, if
applicable, and (11) all other documents relating to such Mortgage Loan which
would customarily be maintained in a mortgage loan file by the Servicer in order
to service the mortgage loan properly, as well as any other documents relating
to such Mortgage Loan (other than Mortgage Loan Documents) that come into the
Servicer's possession.
"Servicing Account": As defined in Section 3.05 hereof.
"Servicing Advances": Advances required to be made by the Servicer as
described in Section 3.04(a) hereof, including, but not limited to, advances for
the payment of personal property taxes, real estate taxes and premiums for
Standard Hazard Insurance Policies.
"Servicing Fee": On each Distribution Date, the product obtained by
multiplying (a) one-twelfth of the Servicing Fee Rate by (b) the aggregate
Scheduled Principal Balance of the Assets immediately prior to the preceding
Collection Period (without giving effect to any Principal Prepayments, Net
Liquidation Proceeds and Repurchase Prices received (or Realized Losses
incurred) on the day preceding the beginning of such Collection Period).
"Servicing Fee Rate": A PER ANNUM rate, to be specified in each Pooling
and Servicing Agreement.
"Shortfall": Due Date Interest Shortfall and Soldiers' and Sailors'
Shortfall.
"Soldiers' and Sailors' Shortfall": Interest losses on a Contract or
Mortgage Loan resulting from application of the Soldiers' and Sailors' Civil
Relief Act of 1940.
"Special Hazard Insurance Policy": An insurance policy covering a Contract
or Mortgage Loan against loss by reason of fire, lightning, explosion, smoke,
windstorm, hail, riot, strike and civil commotion.
"Special Hazard Loss": A loss incurred on a Contract or Mortgage Loan
attributable to physical damage to the related Manufactured Home or Mortgaged
Property of a type which is not covered by standard hazard insurance policies,
excluding losses caused by war, nuclear reaction, nuclear or atomic weapons,
insurrection or normal wear and tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Holder's Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed transaction
or activity will not (a) affect adversely the status of the REMIC as a REMIC or
the related Regular Certificates as the regular interests therein, (b) affect
the timing or amount of distributions of interest or principal on such Regular
Certificates, or (c) result in the
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encumbrance of the Contracts by a tax lien.
"Standard Hazard Insurance Policy": With respect to each Contract, the
policy of fire and extended coverage insurance (and any federal flood insurance,
if applicable) required to be maintained for the related Manufactured Home as
provided herein, which may be a blanket mortgage impairment policy maintained by
the Servicer in accordance with the terms and conditions of the Pooling and
Servicing Agreement.
"Standard Terms": These Standard Terms to Pooling and Servicing Agreement
and all exhibits, schedules and appendices hereto, as amended and supplemented
from time to time.
"Startup Day": The Startup Day (within the meaning of Code section
860G(a)(9)) is the Closing Date.
"Tax Matters Person": The Person or Persons designated from time to time
hereunder to act as tax matters person (within the meaning of the REMIC
Provisions) of the REMIC.
"Terminating Purchase": The purchase of all Contracts and Mortgage Loans
and each Repo Property and REO Property owned by a Trust pursuant to
Section 9.01 hereof.
"Termination Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on the Distribution Date on which the
earlier of (a) a Terminating Purchase or (b) the final payment or other
liquidation of the last Asset remaining in the Trust or the disposition of the
last Repo Property or REO Property remaining in the Trust is made are deposited.
The Termination Account shall be an Eligible Account.
"Termination Date": Any Distribution Date fixed for termination of the
Trust pursuant to the provisions of Sections 9.01 and 9.02 hereof.
"Termination Price": With respect to any Terminating Purchase, the greater
of (1) the sum of (a) any Liquidation Expenses incurred by the Servicer in
respect of any Asset that has not yet been liquidated, (b) all amounts required
to be reimbursed or paid to the Servicer in respect of previously unreimbursed
Advances, plus (c) the sum of (i) 100% of the aggregate of the Unpaid Principal
Balance of each Asset remaining in the Trust on the day of such purchase, plus
accrued interest thereon at the related Asset Rate through the end of the
Interest Accrual Period relating to the Termination Date, plus (ii) the lesser
of (A) the aggregate of the Unpaid Principal Balances of each Asset relating to
any Repo Property or REO Property remaining in the Trust, plus accrued interest
thereon at the related Asset Rate through the end of the Interest Accrual Period
related to the Termination Date and (B) the current appraised value of any such
Repo Property or REO Property (net of Liquidation Expenses to be incurred in
connection with the disposition of such Repo Property or 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 previously
unreimbursed P&I Advances made in respect of such Repo Property or REO Property
and (2) the aggregate fair market value of all of the assets of the Trust (as
reasonably determined in good faith by the Servicer as of the close of business
on the third Business Day preceding the date upon which notice of any such
purchase is furnished to Certificateholders pursuant to Section 9.01(c)
hereof), plus all previously unreimbursed P&I Advances made with respect to
the Assets. The fair market value of the assets of the Trust shall be deemed
to include accrued interest through the end of the Interest Accrual Period
related to the Termination Date at the applicable Asset Rate on the unpaid
principal balance of each Asset (including any Asset that became a Repo
Property or REO Property, which Repo Property or REO Property has not yet been
disposed of by the Servicer). The basis for any such valuation shall be
furnished by the Servicer to the Certificateholders upon request.
"Terminator": The Person making a Terminating Purchase or causing such
Terminating Purchase to be made.
"TIN": Taxpayer identification number.
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"Title Insurance Policy": For any Mortgage Loan, an American Land Title
Association mortgagee's mortgage loan title policy form 1970, or other form of
mortgagee's title insurance acceptable to FNMA or FHLMC for the jurisdiction in
which the subject property is located, including all riders and endorsements
thereto, insuring that the related Mortgage creates a valid first lien on the
underlying Mortgaged Property subject only to Permitted Encumbrances.
"Transferee Agreement": An agreement substantially in the form of
Exhibit 6 hereto.
"Treasury": The United States Department of the Treasury.
"Trust": The trust created pursuant to the terms of a Pooling and
Servicing Agreement.
"Trust Estate": The segregated pool of assets sold and assigned to a
Trustee by OMI pursuant to the conveyance clause of any Pooling and Servicing
Agreement.
"Trustee": The bank or trust company identified as the trustee under any
Pooling and Servicing Agreement.
"Trustee Mortgage Loan File": As to each Mortgage Loan, a file containing
all of the related Mortgage Loan Documents.
"UCC": The Uniform Commercial Code as in effect in any relevant
jurisdiction.
"Unpaid Principal Balance": With respect to any Asset, the outstanding
principal balance payable by the related Obligor pursuant to the terms of such
Asset.
"U.S. Person": A Person other than a Non-U.S. Person.
"USAP": As defined in Section 3.13 hereof.
"VA": The United States Department of Veterans Affairs.
"VA Asset": An Asset guaranteed in whole or in part by the VA.
"VA Guaranty": As to any VA Asset, VA's full or partial guaranty of
payment of amounts due thereunder.
"Voting Rights": With respect to any Certificate, the portion of the
voting rights of all of the Certificates of the related Series which is
allocated to such Certificate. Unless otherwise provided in the related Pooling
and Servicing Agreement, (a) if any Class of Certificates does not have a
Certificate Principal Balance or has an initial Certificate Principal Balance
that is less than or equal to 1% of the aggregate Certificate Principal Balance
of all the Certificates of its Series, then 1% of the Voting Rights for such
Series shall be allocated to each such Class, and the balance of the Voting
Rights for such Series shall be allocated among the remaining Classes of
Certificates of such Series in proportion to their respective Certificate
Principal Balances following the most recent Distribution Date, and (b) if no
Class of Certificates of such Series has an initial Certificate Principal
Balance less than 1% of the aggregate Certificate Principal Balance of all
Certificates of such Series, then all of the Voting Rights for such Series shall
be allocated among all the Classes of Certificates of such Series in proportion
to their respective Certificate Principal Balances following the most recent
Distribution Date. Voting Rights allocated to each Class of Certificates shall
be allocated among the Certificates of such Class in proportion to the
respective Percentage Interests of the Holders thereof.
"Withholding Agent": The Trustee or its designated Paying Agent or other
Person who is liable to withhold federal income tax from a distribution on a
Residual Certificate under sections 1441 or 1442 of the Code and the Regulations
promulgated thereunder.
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"Writedown Amount": With respect to any Distribution Date for a Series,
the amount, if any, by which (1) the aggregate Certificate Principal Balance of
all Certificates of such Series, after all distributions have been made on such
Certificates on such Distribution Date, exceeds (2) the Pool Scheduled Principal
Balance of the related Assets for the next Distribution Date.
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ARTICLE II
THE ASSETS
SECTION 2.01. ASSIGNMENT OF ASSETS.
Pursuant to a Pooling and Servicing Agreement, OMI has sold to the Trustee
without recourse all the right, title and interest of OMI in and to the Assets
identified in such Pooling and Servicing Agreement, any and all rights,
privileges and benefits accruing to OMI under the Sales Agreement(s) with
respect to such Assets (except any rights of OMI to fees payable by the Seller
under such Sales Agreement and provided that OMI shall retain its rights to
indemnification from the Seller under such Sales Agreement, but shall also
convey rights to such indemnification to the Trustee as its assignee), including
the rights and remedies with respect to the enforcement of any and all
representations, warranties and covenants under such Sales Agreements and assets
included or to be included in the related Trust for the benefit of the related
Certificateholders as set forth in the conveyance clause of the related Pooling
and Servicing Agreement. Such assignment includes all of OMI's rights to
payments due with respect to the Assets after the Cut-off Date.
SECTION 2.02. THE CONTRACTS.
(a) Servicer's Custody of Contract Files and Servicer Contract Files. The
parties to the Pooling and Servicing Agreement, by their execution thereof,
acknowledge the Servicer's appointment to serve as custodian of the Contract
Files and the Servicer Contract Files as described herein for the benefit of the
Certificateholders and the Trustee. The Servicer, by its execution of the
Pooling and Servicing Agreement, agrees to, and shall, retain possession of the
Contract File and the Servicer Contract File pertaining to each of the Contracts
on behalf of the Certificateholders and the Trustee. Without limiting the
foregoing, the Trustee acknowledges that, with respect to each Contract secured
by a Manufactured Home located in Virginia as to which the Trustee is identified
as first lienor on the related certificate of title, for purposes of Section
46.2-641 of the Virginia Code (as currently in effect), the Servicer is holding
such Contract and the related certificate of title as bailee and agent for the
Trustee as such first lienor.
The Servicer shall hold each Contract and any other documents constituting
each Contract File and each Servicer Contract File that are in the possession of
the Servicer or that at any time come into the possession of the Servicer in
trust as custodian for the Holders of the Certificates, and the Servicer hereby
acknowledges and declares that it holds and will hold or has agreed to hold such
documents as custodian and as the bailee for, and for the exclusive use and
benefit of, the Holders of the Certificates in accordance with the terms of the
Pooling and Servicing Agreement, and shall make disposition thereof only in
accordance with the Pooling and Servicing Agreement. The Servicer shall
segregate and maintain continuous custody of all documents constituting the
Contract Files in its possession in secure and fireproof-rated locked files or
vaults in accordance with customary standards for such custody.
From time to time, OMI or the Seller shall deliver to the Servicer for
inclusion in the appropriate Contract File, the original Contract Documents for
any Contract to the extent that copies of such original documents were initially
included in such Contract File or in the event that only a copy of an
application for an original Contract Document was initially included among the
related Contract Documents. In addition, the Servicer shall add to the
appropriate Contract File any additional original documents received by the
Servicer that evidence a modification of the related Contract approved by OMI.
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The Servicer shall maintain custody of the Contract Files and Servicer
Contract Files for each Series in its possession at its offices where the
Contract Files and Servicer Contract Files are presently maintained or at such
other offices of the Servicer in the State of North Carolina as the Servicer may
identify to the Trustee by written notice provided at least ten days prior to
the Servicer's change of the location of its custody of the Contract Files and
Servicer Contract Files. The Servicer may not move the location of its custody
of the Contract Files and Servicer Contract Files for any Series outside of the
State of North Carolina without first giving 30 days' prior written notice of
such relocation to each applicable Rating Agency and the Trustee and obtaining
each such Rating Agency's written confirmation that such relocation will not
result in any downgrading of any Certificates of such Series. Notwithstanding
the foregoing, the Servicer may temporarily move individual Contract Files or
any portions thereof without notice to the Trustee or any Rating Agency as may
be necessary for it to conduct collection and other servicing activities in
accordance with its customary practices and procedures. In acting as custodian
of the Contract Files, the Servicer agrees not to assert any ownership interests
in the Contracts or the Contract Files, and to indicate to any third parties,
promptly upon their inquiry to the Servicer, that the Contracts and the Contract
Files have been sold and assigned to the appropriate Trust.
(b) Review of Contract Files. Prior to the Closing Date, the Servicer's
operations department will complete a review of all of the Contract Files
(including the certificates of title to, or other evidence of a perfected
security interest in, the related Manufactured Homes), confirming the accuracy
of the Contract Schedule delivered to the Trustee. On or before the Closing
Date, the Servicer shall deliver to the Trustee a Servicer Custodial
Certification signed by one of its Officers confirming that it is in possession
of the Contract File for each Contract identified on Schedule I to the Pooling
and Servicing Agreement, subject to any exceptions noted in a schedule to such
certificate. Such certification shall be substantially in the form of Exhibit 1
hereto.
In giving its Servicer's Custodial Certification with respect to a Series,
the Servicer shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to determine
that they or the signatures thereon are genuine, enforceable, or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face or (B) to determine whether
any Contract File should include any assumption agreement, modification
agreement or waiver agreement.
If the Servicer discovers any discrepancy between any Contract and the
Contract Schedule, or that any required Contract Document is defective or
missing from the related Contract File, in either case in a manner that is
materially adverse to the interests of the Certificateholders, it shall
immediately provide written notice to the Seller (unless the Seller is the
Servicer) and the Trustee of such discrepancy, incompleteness or defect. If the
Seller does not cure such discrepancy or such incomplete or defective Contract
File within 90 days after its receipt of written notice of such discrepancy,
incompleteness or defect, the Servicer shall take all steps within its power to
enforce the Trustee's right to require the Seller to repurchase the affected
Contract (or in the alternative to substitute for such Contract, if the
substitution will take place within two years after the Closing Date) pursuant
to the applicable Sales Agreement or, in the alternative (if the discrepancy
consists of an overstatement in the Contract Schedule of the Cut-off Date
Principal Balance of a Contract), to deposit cash into the related Certificate
Account in the amount of such overstatement of the Cut-off Date Principal
Balance of a Contract in the Contract Schedule (as described in the applicable
Sales Agreement).
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(c) Security Interests in the Contracts, Manufactured Homes and Real
Property.
(1) PERFECTION OF TRUSTEE'S SECURITY INTEREST IN CONTRACTS. On or
prior to the Closing Date, the Servicer shall cause to be filed in all
appropriate UCC filing offices, UCC-1 financing statements describing the
Trust Estate (including the Contracts and payments due thereon after the
Cut-off Date) and proceeds thereof as "collateral" and (1) naming the
Seller as "Debtor," OMI as "Secured Party," and the Trustee as "Assignee,"
and (2) naming OMI as "Debtor" and the Trustee as "Secured Party." Each
financing statement shall bear a statement on the face thereof indicating
that the parties intend the financing statement to evidence a true sale
of chattel paper, but that if the transaction is recharacterized as a
loan from the Trustee to the Seller or as involving a loan from the
Trustee to OMI or from OMI to the Seller, the financing statement is to
perfect the Trustee's security interest in the chattel paper. The Servicer
shall cause to be filed all necessary continuation statements for each of
the aforementioned UCC-1 financing statements. Within one week after the
Closing Date, the Servicer will stamp the face of each Contract with the
following legend (with the name of the Trustee filled into each blank):
"This Contract has been assigned to ____________________, as Trustee
pursuant to a Pooling and Servicing Agreement among Oakwood Acceptance
Corporation, Oakwood Mortgage Investors, Inc. and ________________."
(2) PERFECTION OF TRUSTEE'S SECURITY INTEREST IN MANUFACTURED HOMES.
So long as the Contract Documents for each Contract contain evidence of
perfection of either the Seller's, OMI's or the Trustee's security
interest in the related Manufactured Home, neither the Seller nor OMI
shall be required to cause notations to be made on any certificate or
other document of title relating to such Manufactured Home or to execute
any transfer instrument (including, without limitation, any UCC-3
assignments) relating to such Manufactured Home, except under the limited
circumstances described in Section 2.06(b) below. Subject to the
limitation described in the preceding sentence, the Servicer shall take
all steps necessary, at its own expense, to maintain perfection of the
Trustee's lien on each Manufactured Home to the extent the Servicer
receives notice of relocation, re-registration or sale thereof.
(3) REAL ESTATE ASSIGNMENTS. The Contract Documents for each Land
Secured Contract are required to contain evidence that the Seller has
record title to the Real Property underlying such Land Secured Contract.
Neither the Seller nor OMI will be required to prepare, deliver or record
any assignments to OMI or the Trustee in recordable form for the Mortgages
related to such Land Secured Contracts. However, on or before the Closing
Date, the Seller shall deliver to the Trustee an executed power of
attorney substantially in the form of Exhibit 9 hereto, authorizing the
Trustee to execute and record assignments of Mortgages securing Land
Secured Contracts from the Seller to the Trustee in the event that
recordation of such assignments becomes necessary for foreclosure on the
related Real Property by or on behalf of the Trustee. Pursuant to such
power of attorney, at the Servicer's instruction, the Trustee shall
execute any such assignments as are provided to the Trustee by the
Servicer. After execution of any such assignments, the Trustee shall
redeliver such assignments to the Servicer at the Servicer's expense. Any
expenses incurred by the Servicer in connection with the foregoing or in
connection with its recordation of assignments in preparation for a
foreclosure on a Land Secured Contract shall constitute Liquidation
Expenses.
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SECTION 2.03. THE MORTGAGE LOANS.
(a) Custody of Trustee Mortgage Loan Files. In connection with the
transfer and assignment of the Mortgage Loans from OMI to the Trustee, OMI shall
deliver, or cause to be delivered, to the Trustee or its Custodian on or before
the Closing Date, a Trustee Mortgage Loan File containing each of the documents
listed in the definition thereof. If any Mortgage or an Assignment of a Mortgage
to the Trustee or any prior Assignment is in the process of being recorded on
the Closing Date, OMI shall cause each such original recorded document or
certified copy thereof, to be delivered to the Trustee or its Custodian promptly
following its recordation. OMI shall also cause to be delivered to the Trustee
any other original Mortgage Loan Document to be included in the Trustee Mortgage
Loan File if a copy thereof initially was delivered.
In lieu of recording an Assignment of any Mortgage for any Mortgage Loan,
OMI may deliver or cause to be delivered to the Trustee or its Custodian the
Assignment of the Mortgage from the Seller to the Trustee in a form suitable for
recordation, together with an Opinion of Counsel to the effect that recording is
not required to protect the Trustee's right, title and interest in and to the
related Mortgage Loan or, in case a court should recharacterize the sale of the
Mortgage Loans as a financing, to perfect a first priority security interest in
favor of the Trustee in the related Mortgage Loan. In the event that the
Servicer receives notice that recording is required to protect the right, title
and interest of the Trustee in and to any such Mortgage Loan for which
recordation of an Assignment has not previously been required, the Servicer
shall promptly notify the Trustee and the Trustee shall within five Business
Days of its receipt of such notice deliver, or cause to be delivered, each
previously unrecorded Assignment to the Servicer for recordation.
By its execution of the Pooling and Servicing Agreement for a Series, the
Trustee acknowledges and declares that it or the Custodian holds and will hold
or has agreed to hold all documents delivered to it from time to time with
respect to a Mortgage Loan underlying such Series and all other assets delivered
to it or its Custodian and that are included in the definition of "Trust Estate"
in the related Pooling and Servicing Agreement in trust for the exclusive use
and benefit of all present and future Certificateholders.
(b) Custody of Servicer Mortgage Loan Files. The Servicer has in its
possession a Servicer Mortgage Loan File for each Mortgage Loan containing each
of the documents listed in the definition thereof. All such documents shall be
held by the Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
(c) Review of Trustee Mortgage Loan Files.
(1) INITIAL CERTIFICATION. The Trustee shall, for the benefit of the
Certificateholders for any Series, review each related Trustee Mortgage
Loan File prior to the related Closing Date to ascertain that all
documents required to be included in the Trustee Mortgage Loan File are
included therein, and shall deliver to OMI and the Servicer on such
Closing Date an Initial Certification with respect to each underlying
Mortgage Loan (except any Mortgage Loan that has been liquidated or
purchased from the related Trust prior to such Closing Date) to the effect
that, except as specifically noted on a schedule of exceptions thereto,
(A) all documents required to be contained in the Trustee Mortgage Loan
File are in its possession, (B) such documents have been reviewed by it
and appear regular on their face and relate to such Mortgage Loan, and (C)
based on its examination and only as to the foregoing documents, the
information set forth on the related Mortgage Loan Schedule accurately
reflects information set forth in the Trustee Mortgage Loan File.
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It is understood that before making the Initial Certification for
any Series, the Trustee shall examine the related Mortgage Loan Documents
to confirm that:
(A) each Mortgage Note and Mortgage bears an original
signature or signatures purporting to be that of the Person or
Persons named as the maker and mortgagor/trustor or, if photocopies
are permitted, that such copies bear a reproduction of such
signature or signatures;
(B) except for the endorsement to the Trustee, neither the
Mortgage nor any Assignment, on the face or the reverse side(s)
thereof, contain evidence of any unsatisfied claims, liens, security
interests, encumbrances or restrictions on transfer;
(C) the principal amount of the indebtedness secured by the
related Mortgage is identical to the original principal amount of
the related Mortgage Note;
(D) the Assignment of the related Mortgage from the Seller to
the Trustee is in the form required pursuant to clause (c) of the
definition of Trustee Mortgage Loan File, and bears an original
signature of the Seller and any other necessary party (or signatures
purporting to be that of the Seller and any such other party) or, if
photocopies are permitted, that such copies bear a reproduction of
such signature or signatures;
(E) if intervening Assignments are included in the Trustee
Mortgage Loan File, each such intervening Assignment bears an
original signature of the related mortgagee and/or the assignee
(and any other necessary party) (or signatures purporting to be
that of the Seller and any such other party) or, if photocopies are
permitted, that such copies bear a reproduction of such signature
or signatures;
(F) if either a Title Insurance Policy, a preliminary title
report or a written commitment to issue a Title Insurance Policy is
delivered, the address of the real property set forth in such
policy, report or written commitment is identical to the real
property address contained in the related Mortgage; and
(G) if any of a Title Insurance Policy, certificate of title
insurance or a written commitment to issue a Title Insurance Policy
is delivered, such policy, certificate or written commitment is for
an amount not less than the original principal amount of the related
Mortgage Note and such Title Insurance Policy insures that the
related Mortgage creates a first lien, senior in priority to all
other deeds of trust, mortgages, deeds to secure debt, financing
statements and security agreements and to any mechanics' liens,
judgment liens or writs of attachment (or if the Title Insurance
Policy or certificate of title insurance has not been issued, the
written commitment for such insurance obligates the insurer to issue
such policy for an amount not less than the original principal
amount of the related Mortgage Note).
(2) FINAL CERTIFICATION. Prior to the first anniversary date of the
Closing Date for a Series, the Trustee shall deliver to OMI and the
Servicer a Final Certification evidencing the completeness of the Trustee
Mortgage Loan File for each Mortgage Loan, with any applicable exceptions
noted on such Final Certification.
(3) CERTIFICATIONS GENERALLY. In giving each of the Initial
Certification and the Final Certification with respect to a Series, the
Trustee shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereon are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been
recorded or that they are other than what they purport to be on their face
or (B) to determine whether any Trustee
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Mortgage Loan File should include any assumption agreement, modification
agreement, written assurance or substitution agreement.
(4) RECORDATION REPORT. No later than the fifth Business Day of each
third month, commencing the fourth month following the month in which the
Closing Date for a Series occurs, the Trustee shall deliver to the
Servicer a Recordation Report for such Series, dated as of the first day
of such month, identifying those Mortgage Loans underlying such Series for
which it has not yet received (A) an original recorded Mortgage or a copy
thereof certified to be true and correct by the public recording office in
possession of such Mortgage or (B) an original recorded Assignment of the
Mortgage to the Trustee and any required intervening Assignments or a copy
thereof certified to be a true and correct copy by the public recording
office in possession of such Assignment; PROVIDED, HOWEVER, that the
Trustee shall not be required to provide a Recordation Report with respect
to the recordation of an Assignment for any Mortgage Loan for which there
has been delivered an Assignment in recordable form pursuant to Section
2.03(a) hereof unless the Trustee has delivered such Assignment to the
Servicer for recordation, in which case, the Trustee shall deliver a
Recordation Report as to the status of such Assignment in accordance with
this paragraph commencing in the fourth month following the delivery of
such Assignment to the Servicer for recordation.
(5) CUSTODIANS. In lieu of taking possession of the Trustee Mortgage
Loan Files and reviewing such files itself, the Trustee may, in accordance
with Section 8.11 hereof, appoint one or more Custodians to hold the
Trustee Mortgage Loan Files for a Series on its behalf and to review them
as provided in this Section 2.03. OMI shall, upon notice of the
appointment of a Custodian, deliver or cause to be delivered all documents
to the Custodian that would otherwise be deliverable to the Trustee. In
such event, the Trustee shall obtain from each such Custodian, within the
specified times, the Initial and Final Certifications and the Recordation
Reports with respect to those Mortgage Loans held and reviewed by such
Custodian and may deliver such Certifications and Reports to OMI and the
Servicer in satisfaction of the Trustee's obligation to prepare such
Certification and Reports. The Trustee shall notify the Custodian of any
notices delivered to the Trustee with respect to those Trustee Mortgage
Loan Files.
(d) Recordation with Respect to Mortgage Loans. Notwithstanding any
provisions in these Standard Terms to the contrary, OMI shall cause, with
respect to each Mortgage Loan, Assignments of Mortgages to the Trustee to be
prepared and recorded with respect to all Mortgages not later than one-hundred
twenty (120) calendar days following the Closing Date, which recordation shall
be an expense of the Company. For each Mortgage for which an Assignment of
Mortgage is not duly and timely recorded as provided above, the Company shall
repurchase such Mortgage pursuant to the provisions of 2.06 hereof. As evidence
of recordation, the Trustee shall be entitled to rely upon, among other things
(i) a certification from a title insurance company, (ii) an Opinion of Counsel,
(iii) a recorded Assignment or (iv) a clerk's receipt as to the recordation of
any or all of the Assignments.
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
As of the Closing Date, the Trustee represents and warrants that (1) it
acquired the Assets on behalf of the Trust from OMI in good faith, for value,
and without notice or knowledge of any adverse claim, lien, charge, encumbrance
or security interest (including, without limitation, federal tax liens or liens
arising under ERISA), (2) except as permitted in the related Pooling and
Servicing Agreement and these Standard Terms, it has not and will not, in any
capacity, assert any claim or interest in the Assets, and (3) it has not
encumbered or transferred its right, title or interest in the Assets. The
representation and warranty made in clause (1) above with respect to the absence
of any adverse claim, lien, charge, encumbrance or security interest is made by
the Trustee without any independent investigation and without recourse or
warranty, except that the Trustee believes such representation and warranty to
be true.
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SECTION 2.05. REPRESENTATIONS AND WARRANTIES AS TO ASSETS.
OMI represents and warrants to the Trustee, effective as of the Closing
Date, that the following information is true and correct in all material
respects:
(a) The information pertaining to each Asset set forth in the Asset
Schedule was true and correct at the date or dates respecting which such
information was furnished.
(b) OMI is the owner of, or holder of a perfected first priority security
interest in, each Asset.
(c) OMI acquired its ownership of, or security interest in, each such
Asset in good faith without notice of any adverse claim.
(d) Except for the sale to the Trustee, OMI has not assigned any interest
or participation in each such Asset (or, if any such interest or participation
has been assigned, it has been released).
(e) OMI has full right to sell the Trust Estate to the Trustee.
It is understood and agreed that the representations and warranties set
forth in this Section 2.05 shall survive delivery of the respective Contract
Files to the Servicer as custodian for the Trustee and of the respective Trustee
Mortgage Loan Files to the Trustee or its Custodian and shall inure to the
benefit of the Trustee notwithstanding any restrictive or qualified endorsement
or assignment. Upon the discovery by OMI, the Servicer or the Trustee of a
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other parties
to the Pooling and Servicing Agreement. It is understood and agreed that the
obligations of OMI set forth in Section 2.06 to cure, substitute for or
repurchase a Contract constitute the sole remedies available to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations and warranties contained in this Section 2.05. It is further
understood and agreed that OMI shall be deemed not to have made the
representations and warranties in this Section 2.05 with respect to, and to the
extent of, representations and warranties made, as to the matters covered in
this Section 2.05, by the Seller in the related Sales Agreement assigned to the
Trustee.
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SECTION 2.06. PURCHASE OR SUBSTITUTION OF CERTAIN ASSETS.
(a) Breaches of Representations and Warranties and Incomplete or
Defective Asset Files.
(1) SELLER BREACH. Upon discovery or receipt of notice of any
defective document in an Asset File, or of any breach by the Seller of any
representation, warranty or covenant hereunder or under the Sales
Agreement, which defect or breach materially and adversely affects the
value of any Asset or the interest of the Trust therein (it being
understood that any such defect or breach shall be deemed to have
materially and adversely affected the value of the related Asset or the
interest of the Trust therein if the Trust incurs a loss as a result of
such defect or breach), the Trustee shall promptly notify the Servicer of
such defect or breach and direct the Servicer to request the Seller of
such Asset to cure such defect or breach. The Seller must cure such defect
or breach, or purchase such Asset from the Trustee on behalf of the
Certificateholders, within 90 days after the date on which the Seller was
notified of such defect or breach. In lieu of purchasing any such Asset as
provided above, if so provided in the related Sales Agreement, the Seller
may cause such Asset to be removed from the Trust (in which case it shall
become a Replaced Asset) and substitute one or more Qualified Substitute
Assets in the manner and subject to the limitations set forth in Section
2.06(g) below. Notwithstanding the foregoing, however, if such breach is a
Qualification Defect and one or more REMIC elections have been made with
respect to the related Trust, such cure, purchase or substitution must
take place within 75 days of the Defect Discovery Date. It is understood
and agreed that enforcement of the obligation of the Seller to cure or to
purchase (or to substitute for) any Asset as to which a material defect in
a constituent document exists or as to which such a breach has occurred
and is continuing, in addition to the obligation of the Seller to
indemnify OMI and its assignees (including the Trust) for any losses and
damages incurred in respect of any such breach or defect, shall constitute
the sole remedy respecting such defect or breach available to the Trustee
on behalf of the Certificateholders. The Servicer shall use its best
efforts to enforce the Seller's obligations under its Sales Agreement to
repurchase or substitute for Assets affected by breaches of the Seller's
representations and warranties contained in its Sales Agreement, and to
enforce the Seller's obligations to indemnify the Trust (as the assignee
of OMI under the Sales Agreement) for any losses or damages it incurs as a
result of breaches of the Seller's representations and warranties
contained in its Sales Agreement.
(2) SERVICER BREACH. In addition to taking any action required
pursuant to Section 7.01 hereof, upon discovery or notice of any breach by
the Servicer of any representation, warranty or covenant hereunder not
covered by Section 2.06(a)(1) above which materially and adversely affects
the value of any Asset or the interest of the Trust therein (it being
understood that any such defect or breach shall be deemed to have
materially and adversely affected the value of the related Asset or the
interest of the Trust therein if the Trust incurs a loss as a result of
such defect or breach), the Trustee promptly shall notify the Servicer of
such breach. Upon receipt of such notification, the Servicer shall cure
such breach or shall purchase such Asset from the Trustee within 90 days
after the date on which the Servicer was notified of such breach.
Notwithstanding the foregoing, however, if such breach is a Qualification
Defect and one or more REMIC elections have been made with respect to the
related Trust, such cure or purchase must take place within 75 days of the
Defect Discovery Date.
In the event the Seller has breached a representation or warranty
under its Sales Agreement that is substantially identical to a
representation or warranty breached by the Servicer, the Servicer shall
first proceed against the Seller. If the Seller does not within 60 days
after notification of the breach, take steps to cure such breach or
purchase or substitute for the Mortgage Loan, the Servicer shall cure such
breach or purchase the Mortgage Loan from the Trust as provided in this
Section 2.06(a)(2).
(3) OMI BREACH. Within 90 days after the earlier of discovery or
receipt of notice by OMI of the breach of any of its representations or
warranties set forth in Section 2.05 above with respect to any Asset,
which breach materially and adversely affects the value of the Asset or
the interest of the Trust
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therein (it being understood that any such breach shall be deemed to have
materially and adversely affected the value of the related Asset or the
interest of the Trust therein if the Trust incurs a loss as a result of
such defect or breach), OMI shall (i) cure such breach in all material
respects, (ii) purchase the Asset from the Trustee, or (iii) remove such
Asset from the Trust (in which case it shall become a Replaced Asset) and
substitute one or more Qualified Substitute Assets in the manner and
subject to the limitations set forth in Section 2.06(g) below.
Notwithstanding the foregoing, however, if such breach is a Qualification
Defect and one or more REMIC elections have been made with respect to the
related Trust, such cure, purchase or substitution must take place within
75 days of the Defect Discovery Date.
(b) Failure to Retitle Manufactured Homes. Upon the occurrence of either
of the following events:
(1) the rendering of judgment by a court of competent jurisdiction
that the Trustee does not have a perfected first-priority security
interest in a particular Manufactured Home because the Seller has not
caused notations to be made on any certificate or other document of title
relating to such Manufactured Home or has not executed any transfer
instrument (including any UCC financing statement or UCC-3 assignment)
relating to such Manufactured Home, or
(2) the Servicer's receipt of written advice of counsel selected by
the Servicer from among the counsel used by the Servicer in the ordinary
course of its business to the effect that a court of competent
jurisdiction sitting in a jurisdiction in which some of the Manufactured
Homes underlying the Contracts are located has held that, solely because
of the failure of a pledgor or assignor of manufactured housing contracts
(whose pledgee or assignee has perfected its security interest in such
contracts) to cause notations to be made on any certificate or other
document of title relating to a manufactured home underlying the pledged
contracts or to execute any transfer instrument (including any UCC
financing statement or UCC-3 assignment) relating to any such manufactured
home, a perfected first-priority security interest was not created in a
manufactured home underlying such contracts located in such jurisdiction
in favor of the pledgee or assignee,
then the Servicer, at its expense, must complete all appropriate remedial action
with respect to the affected Manufactured Home(s) within 180 days after the
Servicer's receipt of written notice of such judgment or of such written advice.
If the Servicer fails to complete all such remedial action with respect to any
affected Manufactured Home within such 180-day period, the Servicer must
repurchase each related Contract at the Repurchase Price therefor on or before
the last Business Day of the Prepayment Period ending on or immediately after
the expiration of such 180-day period in accordance with Section 2.05(f) below.
In connection with the foregoing obligation, the Servicer shall have no
obligation on an ongoing basis to seek any advice of counsel with respect to the
matters described in clause (2) of the preceding paragraph. However, the
Servicer shall seek advice with respect to such matters whenever information
comes to the attention of any of its executive officers which causes such
executive officer to determine that a holding of the type described in such
clause (2) might exist.
(c) Assignment Failure. If an Assignment to the Trustee of the Seller's
interest in a Mortgage securing a Mortgage Loan has not been recorded within one
year after the Closing Date for the related Series of Certificates (or in the
case of Mortgage Loans for which recordation of an Assignment was initially
waived but subsequently required pursuant to Section 2.03(a) hereof, within one
year after the Trustee's delivery of the Assignment to the Servicer for
recordation), the Servicer shall either (1) purchase the related Mortgage Loan
from the Trustee or (2) if there have been no defaults in the Monthly Payments
on such Mortgage Loan, deposit an amount equal to the Repurchase Price therefor
into an escrow account maintained by the Trustee (which account shall not be an
asset of the Trust or any REMIC), or shall enforce the related Seller's
obligation under its Sales Agreement to make such purchase or deposit. Any such
amounts deposited to an escrow account, plus any earnings thereon, shall (A) be
released to the Servicer or Seller, as the case may be, upon receipt by the
Trustee of satisfactory evidence that the Assignment has been recorded in the
name of the Trustee or (B) be applied to purchase the related Mortgage Loan in
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the event that the Servicer notifies the Trustee that there has been a default
thereon. Any amounts in the escrow account may be invested in Eligible
Investments at the written direction of the Servicer.
(d) Converted Loans. Upon receipt of written notice from the Servicer of
the conversion of any Adjustable Rate Asset to a Converted Loan, the Trustee
shall direct the Servicer to enforce the related Seller's obligation set forth
in its Sales Agreement to purchase such Converted Loan from the Trustee, or the
Servicer shall repurchase such Converted Loan from the Trustee. In the event the
Servicer or Seller defaults upon its obligation to purchase any Converted Loan,
and, in the case of a Seller default, such default remains unremedied for a
period of five Business Days after written notice of such default shall have
been given by the Servicer to the Seller, then the Servicer shall use its best
efforts to cause such Converted Loan to be sold for settlement on the last day
of any month to any entity which the Servicer may in its sole discretion select.
The Servicer shall not cause a Converted Loan to be sold or otherwise
transferred to a Person other than the Servicer or Seller (or other Person who
has a pre-existing obligation to purchase such loan) unless (i) upon such sale
the Trust would receive a net amount at least equal to the Repurchase Price of
the Converted Loan and (ii) if the Repurchase Price of the Converted Loan
exceeds the related Basis Limit Amount, the Servicer receives an Opinion of
Counsel that such disposition of a Converted Loan will not result in the
imposition of a "prohibited transaction" tax (as such term is defined in the
Code) on any related REMIC or jeopardize its status as a REMIC. Any such
Converted Loan which is not purchased by the Servicer or the Seller and which
the Servicer is unable to sell as described in the second preceding sentence
shall remain in the Trust.
(e) Optional Purchase by Servicer of Defaulted Contracts. At any time
after a Contract has become and remains a Defaulted Contract, the Servicer may,
at its option, purchase such Defaulted Contract from the Trust at the Repurchase
Price therefor in accordance with Section 2.06(f) below.
(f) Manner of Repurchase. Any Asset purchased pursuant to Section 2.05(a),
(b), (c), (d) or (e) hereof shall be purchased at the Repurchase Price for such
Asset. The Seller, OMI or the Servicer, as appropriate (any of the foregoing, a
"Repurchaser"), shall deposit into the Certificate Account, on the date of
purchase, the Repurchase Price for each Asset to be purchased. Upon such deposit
and upon being provided by the Repurchaser with appropriate instruments of
transfer or assignment, the Trustee shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as shall be necessary
to vest in the Repurchaser any Asset purchased hereunder, and the Trustee shall
deliver to the Repurchaser any Asset Documents relating to the repurchased Asset
that are in the Trustee's possession, whereupon the Trustee shall have no
further responsibility with regard to such Asset. Except as provided in this
Section 2.06(f), if a Repurchaser shall, in accordance with the foregoing,
purchase any Asset required by it to be purchased, neither the Trustee nor any
Certificateholder shall have any other remedy against such Repurchaser based on
any misrepresentation or breach of covenant or warranty of such Repurchaser with
respect to or resulting from any such Asset.
The Servicer will be responsible for determining the Repurchase Price for
any Asset (and the related Basis Limit Amount for any Converted Loan) to be
repurchased pursuant to this Section 2.06 and shall certify such amounts to the
Trustee at the time of any such purchase. If, for whatever reason, the Servicer
shall certify to the Trustee that there is a miscalculation of the amount to be
paid to the Trust, the Trustee shall from monies in the Distribution Account
return any overpayment that the Trust received as a result of such
miscalculation to the applicable Repurchaser upon the discovery of such
overpayment, and the Servicer shall collect from the applicable Repurchaser for
payment to the Trustee any underpayment that resulted from such miscalculation
upon the discovery of such underpayment. Recovery may be made either directly or
by set-off of all or any part of such underpayment against amounts owed by the
Trust to such Repurchaser.
Any Repurchaser shall indemnify and hold harmless the Trustee from and
against any and all losses or liabilities incurred by the Trustee (including any
such losses or liabilities arising from third-party claims) with respect to or
resulting from any repurchase hereunder.
(g) Manner of Substitution. Unless otherwise provided in the Pooling and
Servicing Agreement, the right to substitute a Qualified Substitute Asset for
any Replaced Asset that is an asset of the Trust shall be limited to
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(1) in the case of substitutions pursuant to Section 2.06(a) or 2.06(c), the
two-year period beginning on the Closing Date and (2) in the case of any other
substitution, the three-month period beginning on the Closing Date.
As to any Replaced Asset for which OMI or the Seller substitutes a
Qualified Substitute Asset or Assets, OMI or the Seller, as the case may be,
shall effect such substitution by delivering to the Trustee for such Qualified
Substitute Asset or Assets a complete Contract File or Trustee Mortgage Loan
File, as appropriate, together with an Officer's Certificate of OMI or the
Seller, as the case may be, to the effect that each such Qualified Substitute
Asset complies with the terms of the Pooling and Servicing Agreement. Monthly
Payments due with respect to Qualified Substitute Assets in the month of
substitution are not part of the Trust and will be retained by OMI or the
Seller, as the case may be. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Replaced Asset
during the month in which the substitution occurs, and OMI or the Seller, as the
case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Replaced Asset. The Servicer shall amend the Asset
Schedule to reflect the removal of such Replaced Asset from the terms of the
Pooling and Servicing Agreement and the substitution of the Qualified Substitute
Asset or Assets. Upon such substitution, such Qualified Substitute Asset or
Assets shall be subject to the terms of the Pooling and Servicing Agreement in
all respects, including, in the case of a substitution effected by the Seller,
the representations and warranties included in the related Sales Agreement, and
in the case of a substitution effected by OMI, the representations and
warranties set forth in Section 2.05 above, in each case as of the date of
substitution. The Trustee shall, within five Business Days of its receipt of the
documents referred to above, effect the reconveyance of such Replaced Asset to
OMI or the Seller, as the case may be, in accordance with the procedures
specified above.
For any month in which OMI or the Seller substitutes one or more Qualified
Substitute Assets for one or more Replaced Assets, the Servicer will determine
and notify the Trustee with respect to the amount (if any) by which the
aggregate Unpaid Principal Balance of all such Qualified Substitute Assets as of
the date of substitution is less than the aggregate Unpaid Principal Balance of
all such Replaced Assets (after application of Monthly Payments due in the month
of substitution) (the "Substitution Shortfall"). On the date of such
substitution, OMI or the Seller, as the case may be, will deliver or cause to be
delivered to the Trustee for deposit from its own funds into the Distribution
Account an amount equal to the Substitution Shortfall.
(h) Qualification Defect. If any Person required to cure, purchase, or
substitute under Section 2.06(a) above for an Asset affected by a Qualification
Defect fails to perform within the time limit set forth in those subsections,
the Trustee shall dispose of such an Asset in such manner and for such price as
the Servicer advises the Trustee are appropriate, provided that the removal of
such Asset occurs no later than the 90th day from the Defect Discovery Date. It
is the express intent of the parties that an Asset affected by a Qualification
Defect be removed from the Trust before the 90th day from the Defect Discovery
Date so that the related REMIC or Pooling REMIC will continue to qualify as a
REMIC. Accordingly, the Trustee is not required to sell an affected Asset for
its fair market value nor shall the Trustee be required to make up any shortfall
resulting from the sale of such Asset. The person failing to perform under
Section 2.06(a) above shall be liable to the Trust for (1) any difference
between (A) the Unpaid Principal Balance plus accrued and unpaid interest
thereon at the applicable Asset Rate to the date of disposition and (B) the net
amount received by the Trustee from the disposition (after the payment of
related expenses), (2) interest on such difference at the Asset Rate from the
date of disposition to the date of payment and (3) any legal and other expenses
incurred by or on behalf of the Trust in seeking such payments. Except where the
Servicer is the person failing to perform, the Servicer shall pursue the legal
remedies of the Trust on the Trust's behalf and the Trust shall reimburse the
Servicer for any legal or other expenses of the Servicer related to such pursuit
not recovered from such person. If the Servicer is the person failing to
perform, the Trustee shall pursue the Trust's legal remedies against the
Servicer and the Trust shall reimburse the Trustee for its related legal or
other expenses.
(i) Notices. Any person required under this Section 2.06 to give notice or
to make a request of another person to give notice shall give such notice or
make such request promptly.
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ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS
SECTION 3.01. THE SERVICER.
The Servicer agrees to service the Assets for and on behalf of the Trustee
and its successors and assigns, and otherwise to perform and carry out the
duties, responsibilities and obligations that are to be performed and carried
out by the Servicer under the Pooling and Servicing Agreement. The Servicer
shall service the Contracts in accordance with the customary and usual
procedures of responsible financial institutions that service manufactured
housing retail installment sales contracts and installment loan agreements for
manufactured housing units located in the jurisdictions in which the
Manufactured Homes are located, except as otherwise expressly provided by the
Pooling and Servicing Agreement; PROVIDED, HOWEVER, that the Servicer shall not
release or waive its right to collect the unpaid principal balance of any
Contract. The Servicer shall service the Mortgage Loans (a) generally in
compliance with FNMA standards and (b) in a manner that is consistent with
prudent residential mortgage loan servicing standards generally accepted within
the residential mortgage loan servicing industry. The manner in which the
Servicer services the Assets shall be consistent with the manner in which the
Servicer services all manufactured housing retail installment sales contracts
and residential mortgage loans in its servicing portfolio, except for any
differences specifically required by the Pooling and Servicing Agreement. The
Servicer shall have full power and authority consistent with the aforementioned
standards, acting alone and/or through agents and designees as permitted by
Section 6.07 hereof, to do any and all things it may deem necessary or desirable
in connection with such servicing and administration; PROVIDED, HOWEVER, that to
the extent the Servicer is prohibited by any applicable rule, regulation,
judicial or administrative determination or other order applicable to it from
carrying out any of its obligations or duties provided for herein or in any
document contemplated herein, such failure shall not constitute a breach of this
Agreement.
SECTION 3.02. MAINTENANCE OF RECORDS; INSPECTION OF ASSET FILES.
(a) The Servicer shall retain all data relating directly to or maintained
in connection with the servicing of the Assets for any Series at the address of
the Servicer set forth in Section 11.04 hereof or at such other place where the
servicing offices of the Servicer are located.
The Servicer shall permit the Trustee or any authorized agent of the
Trustee reasonable access, upon prior written notice to the Servicer, during the
Servicer's normal business hours, to the Asset Files, the Servicer Files, and
the Servicer's other records, if any, relating to the Assets for any related
Series. Any such examination of such files or records will be conducted in a
manner that does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise limiting the
scope of the examination the Trustee may make, the Trustee or its authorized
agents, using generally accepted audit procedures, may in their discretion
verify the status of each Asset and review the records relating thereto for
conformity to Remittance Reports prepared pursuant to Article IV hereof and
compliance with the standards represented to exist as to each Asset in the
Pooling and Servicing Agreement.
(b) At all times during the term hereof, the Servicer shall keep available
a copy of the Asset Schedule at its principal executive office for inspection by
Certificateholders.
(c) On or before the date of the Servicer's delivery of the Remittance
Report to the Trustee in any month, the Servicer will, upon the written request
of the Trustee, provide to the Trustee a list of outstanding Assets, setting
forth the Scheduled Principal Balance of each such Asset as of the preceding
Distribution Date.
(d) Notwithstanding the provisions of this Section 3.02, the Trustee shall
at no time have any duty or obligation to examine any records of the Servicer or
to recalculate or otherwise verify the accuracy of any certificate or report
prepared by the Servicer, and no implied duty to do so shall be asserted against
the Trustee.
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(e) On or before the Closing Date for a Series, the Servicer shall deliver
to the Trustee a list of Officers of the Servicer (each a "Servicing Officer")
involved in, or responsible for, the administration and servicing of the Assets
underlying such Series, which list shall be amended from time to time as
necessary by the Servicer by delivery of an amended list of Servicing Officers
to the Trustee.
SECTION 3.03. COLLECTION OF PAYMENTS ON ASSETS; SERVICING DELINQUENT ACCOUNTS.
(a) Continuously from the Cut-off Date until the earliest to occur of the
following with respect to each Asset sold to the Trust in connection with the
issuance of the Certificates: (i) the principal and interest on such Asset is
paid in full, (ii) such Asset is foreclosed and the related Manufactured Home or
Mortgaged Property is liquidated pursuant to Section 3.08 hereof, (iii) all of
the proceeds of a liquidating claim under the Standard Hazard Insurance Policy
relating to such Asset have been deposited to the Certificate Account, or (iv)
the Liquidation Proceeds relating to such Asset have been deposited to the
Certificate Account, the Servicer will proceed diligently and in a manner
consistent with its standards for servicing Assets described in Section 3.01
above, to collect all payments due under each Asset when such payments become
due and payable and to apply such payments in accordance with Sections 3.05,
3.06 and 3.07 hereof.
(b) The Servicer shall have reasonable discretion to extend appropriate
relief to Obligors who encounter hardship and who are cooperative and
demonstrate proper regard for their obligations. The Servicer may arrange with
such an Obligor to extend the payment schedule for the related Asset; PROVIDED,
HOWEVER, that any such extension must be made in accordance with the Servicer's
standards for servicing Assets described in Section 3.01 above; and PROVIDED
FURTHER, that no such extensions may be made except to the extent (1) that the
Servicer has determined, in its reasonable judgment, that the Obligor is in
default or that default is reasonably foreseeable with respect to such Asset in
the absence of such relief, (2) that the Due Date for the final Monthly Payment
on such Asset is not extended beyond the latest Final Scheduled Distribution
Date for the related Series and (3) that the grant of such extension is
otherwise permissible under Section 10.02 hereof and the REMIC Provisions as in
effect at the time of such extension, as evidenced by an Opinion of Counsel
delivered by the Servicer to the Trustee. Where the Obligor is in default on an
Asset notwithstanding such relief and the Servicer has exhausted all reasonable
means of inducing the Obligor to pay on a timely basis, the Servicer shall begin
acceleration of the Assets in accordance with its terms and applicable laws.
SECTION 3.04. ADVANCES AND COMPENSATING INTEREST.
(a) Servicing Advances. If any Obligor is in default in the payment of
premiums on its Standard Hazard Insurance Policy or Policies, the Servicer may
pay such premiums or taxes out of its own funds. If any Obligor is in default in
the payment of premiums on its Standard Hazard Insurance Policy or Policies and
coverage is not provided in respect of the related Asset under a blanket policy
maintained by the Servicer pursuant to Section 3.16(a) below, or if any Obligor
is in default in the payment of personal property taxes or real estate taxes due
in respect of its Manufactured Home or Mortgaged Property, the Servicer shall
pay such premiums or taxes out of its own funds in a timely manner, as Servicing
Advances, unless the Servicer, in its reasonable judgment, determines that any
such Servicing Advance would be a Non-Recoverable Advance. In addition, the
Servicer shall pay in a timely manner, as Servicing Advances, any and all
personal property taxes and real estate taxes due in respect of any Repo
Property or REO Property it holds on behalf of the Trust and all premiums for
any Standard Hazard Insurance Policy maintained for such Repo Property or REO
Property (except as similar coverage may be provided under a blanket policy
maintained by the Servicer pursuant to Section 3.16 below) unless the Servicer,
in its reasonable judgment, determines that any such Servicing Advance would be
a Non-Recoverable Advance.
(b) P&I Advances. On or prior to each Distribution Date, the Servicer
shall make an advance (a "P&I Advance") equal to the positive difference, if
any, between the Available Distribution Amount for such Distribution Date
(calculated without taking into account such P&I Advance) and the amount of
funds available in the Certificate Account. In addition, if the Certificate
Account is maintained with the Trustee, the Servicer may instruct the Trustee
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to use any investment earnings on such account to defray its P&I Advance
obligation, and the Trustee shall honor any such instructions (including
standing instructions).
(c) Recovery of Advances. The Servicer shall be entitled to reimbursement
for any Advances made by it in respect of any Asset out of subsequent
collections in respect of the Assets, including late collections from the
related Obligor or from Insurance Proceeds, Liquidation Proceeds or a Repurchase
Price recovered by it in respect of such Asset ("Related Proceeds") and shall be
entitled to reimburse itself for unreimbursed Advances made that have become
Non-Recoverable Advances in accordance with Section 3.07(a)(1) below.
(d) Non-Recoverable Advances. If the Servicer does not make an Advance on
the grounds that it is a Non-Recoverable Advance, or if an Advance previously
made by the Servicer is determined by the Servicer to have become a
Non-Recoverable Advance, then the Servicer shall provide the Trustee with an
Officer's Certificate stating this fact and stating the basis upon which the
Servicer determined that such Advance would be or was a NonRecoverable Advance.
The Trustee shall not be responsible for determining whether any such
determination was reasonable.
(e) Compensating Interest. So long as OAC is the Servicer of any Assets,
OAC as Servicer shall deposit into the Distribution Account for the related
Series on or before each Remittance Date an amount equal to Compensating
Interest for such month. Compensating Interest shall not be considered a
Non-Recoverable Advance, and the Servicer shall not be entitled to any recovery
or reimbursement from the Trustee or the Certificateholders for any Compensating
Interest.
SECTION 3.05. SERVICING ACCOUNT.
Within one Business Day after the Servicer's receipt of any amounts
collected on any Asset in its lock box maintained for the collection of amounts
payable under contracts serviced by it (including Net Liquidation Proceeds,
Insurance Proceeds and Repurchase Prices in respect thereof), the Servicer shall
deposit such collections, or cause such collections to be deposited, into a
clearing account established by the Servicer (the "Servicing Account"), which
shall be an Eligible Account. The Servicer may use the Servicing Account for
collection of payments on Assets underlying more than one Series and for assets
that are not the subject of any transaction covered by a Pooling and Servicing
Agreement; PROVIDED, that in any such event, the Servicer shall cause separate
accounting and records to be maintained within the Servicing Account with
respect to the Assets underlying each separate Series. Furthermore, the parties
hereto agree that all amounts deposited into the Servicing Account in respect of
the Assets, other than amounts payable to the Servicer as servicing compensation
under the Pooling and Servicing Agreement, are to be held in trust for the
exclusive use and benefit of the related Trust.
SECTION 3.06. CERTIFICATE ACCOUNT.
(a) On or before the Closing Date, the Trustee shall establish a
collection account or accounts (the "Certificate Account"), which must be an
Eligible Account. The Certificate Account is to be held by or for the benefit of
the Trustee on behalf of the Certificateholders, and shall be either in the
Trustee's name or designated in a manner that reflects the custodial nature of
the account and that all funds in such account are held for the benefit of the
Trustee. The Trustee may elect to use a single Certificate Account for more than
one Series of Certificates PROVIDED, that in any such event, the Servicer shall
cause separate accounting and records to be maintained within the Certificate
Account with respect to each separate Series.
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(b) The Servicer shall deposit into the appropriate Certificate Account on
a daily basis, and in no event later than two Business Days following deposit
thereof to the Servicing Account after the Servicer's collection thereof, all
payments and collections received by it on each Outstanding Asset on or after
the effective date of the related Pooling and Servicing Agreement (including Net
Liquidation Proceeds, Insurance Proceeds and Repurchase Prices in respect
thereof), except amounts collected in respect of Monthly Payments due on or
prior to the Cut-off Date. On or prior to the Closing Date, the Servicer shall
deposit into the Certificate Account all installments of principal and interest
due on the Assets after the Cut-off Date and received by the Servicer prior to
the Closing Date, plus each Principal Prepayment of any Asset (including any
related payment of interest) received by the Servicer on or after the Cut-off
Date but prior to the Closing Date.
(c) Amounts on deposit in the Certificate Account may be invested at the
direction of the Servicer in Eligible Investments, and earnings on amounts
deposited in such account shall be credited to the account of the Servicer as
servicing compensation in addition to the Servicing Fee and shall offset P&I
Advances due from the Servicer in respect of the Distribution Date next
succeeding the date on which such earnings were made or, in the alternative at
the Servicer's option, may be released to the Servicer on such Distribution
Date. The amount of any losses incurred in respect of any such investments shall
be deposited in the Certificate Account by the Servicer out of its own funds
immediately upon realization of any such losses.
SECTION 3.07. WITHDRAWALS FROM CERTIFICATE ACCOUNT; REMITTANCE AMOUNTS.
(a) Withdrawals from Certificate Account. The Servicer may withdraw funds
on deposit in the Certificate Account for the following purposes:
(1) to reimburse itself for any Advances previously made by the
Servicer, which Advances remain unreimbursed to the Servicer, out of
Related Proceeds or, if such Advances have been determined by the Servicer
to have become Non-Recoverable Advances, out of any funds on deposit in
the Certificate Account;
(2) to pay any Servicing Fees and other servicing compensation
provided for herein due to the Servicer; PROVIDED, HOWEVER, that if OAC is
the Servicer, it shall only be entitled to withdraw its Servicing Fee in
respect of any Distribution Date from the Certificate Account in
accordance with this clause to the extent the amounts on deposit in the
Certificate Account and attributable to the Available Distribution Amount
for such Distribution Date exceed the sum of all amounts to be distributed
on the Certificates of the related Series on such Distribution Date prior
to the distribution to OAC of its Servicing Fees as described in the
related Pooling and Servicing Agreement in the Section thereof entitled
"Distributions"; and
(3) to enable the Servicer to remit the Remittance Amount to the
Trustee on each Remittance Date, as described in Section 3.07(b) below.
(b) Remittance Dates. On or prior to the Remittance Date for any
Distribution Date, the Servicer shall remit the Remittance Amount for such
Distribution Date to the Trustee, from and to the extent of the funds in the
Certificate Account, plus all required P&I Advances, by wire transfer or
otherwise, in immediately available funds, for deposit into the Distribution
Account. If the Certificate Account is maintained by the Trustee, on each
Remittance Date, the Servicer shall notify the Trustee as to the amount of the
related Remittance Amount and the amount of all required P&I Advances to be
covered by investment earnings on the Certificate Account, and the Trustee shall
transfer such amount from the Certificate Account to the Distribution Account on
the related Distribution Date. In such event, the Servicer shall still remit any
P&I Advances not covered by investment earnings on the Certificate Account to
the Trustee for deposit into the Distribution Account on the Remittance Date.
Notwithstanding the foregoing, if a Terminating Purchase is to be made on
such Distribution Date, and the Servicer shall have received the Termination
Price or shall be the Terminator, the Servicer shall remit the
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Termination Price rather than the Remittance Amount to the Trustee for deposit
into the Distribution Account.
(c) Treatment of Early Payments. Early Payments received by the Servicer
shall be retained in the Certificate Account and transferred to the Distribution
Account when and as if such Early Payments had otherwise been received by the
Servicer as scheduled payments under the Assets. However, Early Payments on any
Assets for a Series on deposit in the Certificate Account that are not yet due
to be passed through to Certificateholders on any Distribution Date may be
remitted to the Distribution Account to offset delinquencies on other Assets for
the same Series. If Early Payments on any Asset are used to offset delinquencies
on other Assets, subsequent late recoveries of such delinquent amounts on such
other Assets shall be treated by the Servicer as a restoration of the Early
Payments used to offset such delinquent amounts and shall be deposited into the
Certificate Account in accordance with Section 3.06(a) hereof. The Servicer
shall maintain records with respect to its application of Early Payments.
SECTION 3.08. REALIZATION UPON DEFAULTED ASSETS.
(a) The Servicer shall repossess, foreclose upon or otherwise comparably
convert the ownership of any Manufactured Home and any related Real Property and
any Mortgaged Property securing an Asset that comes into and continues in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.03 hereof. In connection with such
repossession, foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual for responsible holders of retail installment sales contracts
and installment loan agreements for manufactured housing (in the case of
defaulted Contracts) and for responsible holders of residential, one- to
four-family mortgage loans (in the case of defaulted Mortgage Loans) and as
shall be in compliance with all applicable laws; PROVIDED, that such practices
and procedures shall be, in all circumstances, undertaken with a view toward
maximizing the amount of principal and interest recovered on the Assets.
(b) The Servicer may commence and prosecute any Proceedings in respect of
any Asset in default in its own name on behalf of the Trustee or, if the
Servicer deems it necessary, in the name of the Trustee. If the Servicer elects
to commence a Proceeding to enforce an Asset, the act of commencement shall be
deemed to entail an automatic assignment of the Asset to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding in which the Servicer seeks to collect payments due on any Asset, it
is held that the Servicer lacks standing to enforce an Asset (or otherwise is
not permitted to enforce an Asset) on the grounds that it is not a real party in
interest or a holder entitled to enforce the Asset, the Trustee, on behalf of
the Certificateholders, shall take such steps as the Servicer deems necessary to
enforce the Asset, including bringing suit in its name or in the names of the
Certificateholders. Any such action by the Trustee shall be taken at the
Servicer's expense, but such expenses (including, without limitation, attorneys'
fees) shall be deemed Liquidation Expenses which the Servicer shall have no
obligation to incur to the extent it makes a good faith determination that such
Liquidation Expenses will not be recoverable out of Liquidation Proceeds of the
related Asset.
(c) In seeking to enforce the Assets, the Servicer may exercise any rights
of recourse against guarantors or sureties of any Obligor's obligations (or
against any other third parties against whom any rights of recourse exist in
connection with any Asset).
(d) The Servicer's obligations under this Section are subject to the
proviso that, in the case of damage to a Manufactured Home or a Real Property or
a Mortgaged Property, the Servicer shall not be required to expend its own funds
in making Liquidation Expenses to restore such property unless it shall
determine, in its reasonable judgment, (1) that such restoration will increase
the proceeds of liquidation of the related Asset, after reimbursement to the
Servicer for such expenses, and (2) that such Liquidation Expenses, if made,
will be recoverable out of Liquidation Proceeds of such Asset. If the Servicer
recovers any Insurance Proceeds or Liquidation Proceeds in respect of any Asset,
the Servicer may deduct the amount of any Insured Expenses and unreimbursed
Liquidation Expenses incurred by it in respect of such Asset from such gross
Insurance Proceeds and Liquidation Proceeds, respectively, prior to deposit of
such proceeds into the Certificate Account.
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(e) Notwithstanding any of the foregoing, the Servicer shall not
repossess, foreclose upon or otherwise comparably convert the ownership of any
Manufactured Home, Real Property or Mortgaged Property securing an Asset in
cases where the Servicer has actual knowledge that the Manufactured Home, Real
Property or Mortgaged Property is situated on a toxic waste site as determined
by the United States Environmental Protection Agency or other comparable federal
or state agency and where, in the good faith judgment of the Servicer, the
liabilities that would be imposed upon the Trust with respect to such toxic
waste site would exceed the Net Liquidation Proceeds that could be realized upon
liquidation of the related Asset. The Servicer shall have no affirmative duty or
obligation to determine whether any Manufactured Home, Real Property or
Mortgaged Property is situated on a toxic waste site.
SECTION 3.09. TITLE, CONSERVATION, AND DISPOSITION OF REPO PROPERTY AND
REO PROPERTY.
(a) The Servicer shall maintain, protect, and insure any Repo Property or
REO Property acquired pursuant to Section 3.08 hereof, on behalf of the Trust,
in accordance with standard industry practice solely for the purpose of its
prompt disposition and sale and with a view toward maximizing the amount of
principal and interest recovered on the Assets. During any period in which the
Trust holds a Repo Property or REO Property, the Servicer shall not (1) lease
the Repo Property or REO Property, (2) authorize or permit any construction on
the Repo Property or REO Property, other than the completion of a building or
improvement thereon, and then only if more than 10% of the construction of such
building or other improvement was completed before default on the related Asset
became imminent, all within the meaning of section 856(e)(4)(B) of the Code, or
(3) allow the Repo Property or REO Property to be used in any trade or business
conducted by the Trust. If one or more REMIC elections are made with respect to
the assets of the Trust, the Servicer shall use its best efforts to dispose of
such Repo Property or REO Property for its fair market value by the end of the
tenth month of the third calendar year following the end of the calendar year in
which the Repo Property or REO Property was acquired by the Trust (the "REO
Holding Period"), pursuant to the Servicer's ordinary commercial practices. If
the Servicer is unable to sell such Repo Property or REO Property in the course
of its ordinary commercial practices within the REO Holding Period, the Servicer
shall (a) purchase such Repo Property or REO Property at a price equal to such
Repo Property's or REO Property's fair market value or (b) auction such Repo
Property or REO Property to the highest bidder in an auction reasonably designed
to produce a fair price (an "Auction") that takes place within one month after
the end of the REO Holding Period. If the Servicer and the Trustee either (1)
receive an Opinion of Counsel indicating that, under then-current law, the REMIC
may hold Repo Property or REO Property associated with a REMIC Asset for a
period longer than the REO Holding Period without threatening the REMIC status
of any related REMIC or causing the imposition of a tax upon any such REMIC or
(2) the Servicer applies for and is granted an extension of the REO Holding
Period pursuant to Code sections 860G(a)(8) and 856(e)(3) (the applicable period
provided pursuant to such Opinion of Counsel or such Code section being referred
to herein as an "Extended Holding Period"), upon the direction of OMI or the
Trustee, the Servicer shall continue to attempt to sell such Repo Property or
REO Property pursuant to its ordinary commercial practices until the date two
months prior to the expiration of the Extended Holding Period. If no REMIC
election has been made or is to be made with respect to the assets of the Trust,
the REO Holding Period for disposing of any Repo Property or REO Property as
described in the preceding two sentences shall be an eleven-month period. The
Servicer shall either sell any Repo Property or REO Property remaining after
such date in an Auction or purchase such Repo Property or REO Property (at the
price set forth in this paragraph) before the end of the Extended Holding
Period. In the event of any such sale of a Repo Property or REO Property, the
Trustee shall, at the written request of the Servicer and upon being supplied
with appropriate forms therefor, within five Business Days after its receipt of
the proceeds of such sale or auction, instruct the Servicer to release to the
purchaser the related Contract File and Servicer Contract File (in the case of
a Repo Property), and the Trustee shall release to the purchaser the related
Trustee Mortgage Loan File and shall instruct the Servicer to release to the
purchaser the related Servicer Mortgage Loan File (in the case of a Mortgage
Loan), and in any event the Trustee shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as shall be necessary
to vest in the auction purchaser title to the Repo Property or REO Property, and
shall deliver to such purchaser any Asset Documents relating to such Contract
that are in the Trustee's possession, whereupon the Trustee shall have no
further responsibility with regard to any related Asset File or Servicer File.
Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall
provide financing from such Trust to any purchaser of a Repo Property or REO
Property.
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(b) In the event that title to any Real Property or REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee for the
benefit of the Certificateholders. The Servicer shall, in accordance with
Section 3.09(a), use its reasonable efforts to sell any Repo Property or REO
Property as expeditiously as possible, but in all events within the time period,
and subject to the conditions set forth in Section 3.09(a) hereof. Pursuant to
its efforts to sell such Repo Property or REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such Repo Property or REO Property in the same manner and to such extent as it
customarily does in connection with its own repossessed manufactured homes or
mortgaged properties (as applicable), incident to its conservation and
protection of the interests of the Certificateholders.
(c) The Servicer shall deposit all net funds collected and received in
connection with the operation of any Repo Property or REO Property in the
applicable Certificate Account no later than the second Business Day following
receipt of such funds.
(d) The Servicer, upon the final disposition of any Repo Property or REO
Property, shall be entitled to reimbursement of any related unreimbursed
Advances related to the Asset for such Repo Property or REO Property as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such Repo Property or REO Property, the latter in
accordance with the Sections of the related Pooling and Servicing Agreement that
are entitled "Distributions" and "Limited Right of Servicer to Retain Servicing
Fees from Collections."
(e) The final disposition of any Repo Property or REO Property shall be
carried out by the Servicer at the Repo Property's or REO Property's fair market
value under the circumstances existing at the time of disposition and upon such
terms and conditions as the Servicer shall deem necessary or advisable, and as
are in accordance with accepted servicing practices and in accordance with
Section 3.09(a) above.
(f) The Liquidation Proceeds from the final disposition of any Repo
Property or REO Property shall be deposited into the Certificate Account
promptly following receipt of such Liquidation Proceeds and, subject to such
withdrawals as may be permitted by Section 3.07(a) above, shall be transferred
to the Distribution Account pursuant to Section 3.07(b) above.
(g) The Servicer shall prepare and file reports of foreclosure and
abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, the Servicer,
acting on behalf of the Trustee hereunder, shall not rent, lease, or otherwise
earn income or take any action on behalf of the Trust with respect to any REO
Property that might (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code
or (ii) result in the receipt by any related REMIC of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the Code or
any "net income from foreclosure property" within the meaning of section
860G(c)(2) of the Code, both of which types of income are subject to tax under
the REMIC Provisions, unless the Trustee has received an Opinion of Counsel at
the Trust's expense (the costs of which shall be recoverable out of the
applicable Certificate Account), to the effect that, under the REMIC Provisions
and any relevant proposed legislation, any income generated for any related
REMIC by the REO Property would not result in the imposition of a tax upon such
REMIC.
Without limiting the generality of the foregoing, the Servicer shall
not:
(i) enter into, renew or extend any New Lease with respect to any
REO Property, if the New Lease by its terms will give rise to any income
that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New Lease
other than amounts that will constitute Rents from Real Property;
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(iii) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of section 856(e)(4)(B) of
the Code; or
(iv) Directly Operate, or allow any other Person (other than an
Independent Contractor) to Directly Operate, any REO Property on any date
more than 90 days after its acquisition date;
unless, in any such case, the Servicer has requested and received the Opinion of
Counsel described in the preceding sentence, in which case the Servicer may take
such actions as are specified in such Opinion of Counsel.
(i) The Servicer shall not acquire any personal property relating to any
Asset (other than the related Manufactured Home in connection with a Contract)
pursuant to this Section 3.09 unless either:
(1) such personal property is incident to real property (or to the
related Manufactured Home, in the case of a Contract) (within the meaning
of section 856(e)(1) of the Code) so acquired by the Servicer; or
(2) the Servicer shall have requested and received an Opinion of
Counsel, at the expense of the Trust (recoverable out of the Certificate
Account), to the effect that the holding of such personal property by the
related REMIC will not cause the imposition of a tax under the REMIC
Provisions on any REMIC related to the Trust or cause any such REMIC to
fail to qualify as a REMIC at any time that any Certificate is
outstanding.
SECTION 3.10. FULL PREPAYMENTS AND LIQUIDATIONS; TRUSTEE TO COOPERATE; RELEASE
OF MORTGAGE FILES.
(a) Contracts. The Servicer shall determine when a Contract has been paid
in full. Upon the liquidation of any Contract, the Servicer shall remit the
proceeds thereof to the related Certificate Account in accordance with Sections
3.05 and 3.06 above.
The Servicer is authorized to execute an instrument in satisfaction of any
Contract that is the subject of a Principal Prepayment in full, final
liquidation or other payment in full (as well as an instrument in satisfaction
of any related Mortgage) and do such other acts and execute such other documents
as the Servicer deems necessary to discharge the Obligor thereunder and
eliminate the security interest in the Manufactured Home and any Real Property
related thereto. Upon the Servicer's request, the Trustee shall, at the expense
of the Servicer, perform such other acts as are reasonably requested by the
Servicer (including, without limitation, the execution of documents) and
otherwise cooperate with the Servicer in enforcement of rights and remedies with
respect to Contracts. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to a Certificate
Account or Distribution Account.
(b) Mortgage Loans. Upon the liquidation of any Mortgage Loan, the
Servicer shall remit the proceeds thereof to the related Certificate Account in
accordance with Sections 3.05 and 3.06 above and shall deliver to the Trustee a
Request for Release requesting that the Trustee execute such instrument of
release or satisfaction as is necessary to release the related Mortgaged
Property from the lien of the related Mortgage. The Trustee shall, within five
Business Days of its receipt of such a Request for Release, release, or cause
the Custodian to release, the related Trustee Mortgage Loan File to the
Servicer. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to a Certificate Account or
Distribution Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, including but not limited to, collection under any Title
Insurance Policy, Primary Mortgage Insurance Policy, flood insurance policy or
Standard Hazard Insurance Policy or to effect a partial release of any Mortgaged
Property from the lien of
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the related Mortgage, the Servicer shall deliver to the Trustee a Request for
Release. The Trustee shall, within five Business Days after its receipt of
such Request for Release, release, or cause the Custodian to release, the
related Trustee Mortgage Loan File to the Servicer. Any such Request for
Release shall obligate the Servicer to return each and every document previously
requested from the Trustee Mortgage Loan File to the Trustee by the
twenty-first day following the release thereof, unless (a) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the related Certificate Account or Distribution
Account or the Trustee Mortgage Loan File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Trustee a certificate of the Servicer
certifying as to the name and address of the Person to which such Trustee
Mortgage Loan File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of an Officer's certificate of the Servicer stating
that such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation which are required to be deposited
into the applicable Certificate Account or the Distribution Account have been so
deposited, or that such Mortgage Loan has become an REO Property, the Request
for Release shall be released by the Trustee to the Servicer.
(c) Trustee's Execution of Documents in connection with Foreclosures. Upon
written certification of the Servicer, the Trustee shall execute and deliver to
the Servicer court pleadings, requests for trustee's sale or other documents
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or Real Property or to any legal action brought to obtain judgment
against any Obligor on a Mortgage Note, Land Secured Contract or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by such Mortgage Note, Land Secured Contract or Mortgage or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a statement as
to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the related Mortgage, except for the termination of such a lien upon
completion of the foreclosure proceeding or trustee's sale. Upon the request of
the Servicer, the Trustee shall execute and deliver to the Servicer one or more
limited powers of attorney that constitutes and appoints the Servicer as the
Trustee's true and lawful attorney-in-fact and agent with respect to the
commencement of certain actions, in the name and on behalf of the Trustee, for
the benefit of the Certificateholders, pursuant to the provisions hereof and to
execute and deliver, in the Trustee's name, place and stead such papers as
reasonably necessary or desirable to carry out the foregoing, at all times
consistent with the Pooling and Servicing Agreement.
SECTION 3.11. MAINTENANCE OF SECURITY INTERESTS AND OTHER LIENS IN
MANUFACTURED HOMES.
At its own expense, the Servicer shall take such steps as are necessary to
maintain perfection of the security interest in the Seller, OMI or the Trustee
and the validity of any other lien created by each Contract in the related
Manufactured Home to the extent it receives notice of sale or reregistration of
such Manufactured Home. The Trustee hereby authorizes the Servicer to take such
steps as are necessary to reperfect such security interest in the event of the
relocation of a Manufactured Home or for any other reason; PROVIDED, that
nothing in this Section 3.11 shall be construed to limit the Servicer's
obligations under Section 3.12 below.
SECTION 3.12. DUE-ON-SALE CLAUSES AND ASSUMPTION AGREEMENTS.
Upon learning of any conveyance or prospective conveyance of a
Manufactured Home or Real Property securing any Contract or of a Mortgaged
Property securing any Mortgage Loan, the Servicer may exercise its rights,
subject to state law, under any "due-on-sale" clause of the Contract, Mortgage
Note or Mortgage relating to such Manufactured Home or Mortgaged Property to
demand immediate payment in full of all amounts due under such Contract or
Mortgage Loan. With respect to Mortgage Loans, the Servicer will exercise such
rights to the extent, under the circumstances, and in the manner in which the
Servicer enforces such clauses with respect to other Mortgage Loans held in its
portfolio, but will not exercise such rights if prohibited by law from doing so.
If the Servicer determines not to enforce a "due-on-sale" clause with
respect to an Asset, the Servicer will
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enter into an assumption and/or modification agreement with the person to whom
the Manufactured Home or Mortgaged Property has been conveyed in a form that is
customary or appropriate in the Servicer's reasonable business judgment pursuant
to which such person becomes liable under the Asset and pursuant to which, to
the extent permitted by applicable law and deemed appropriate by the Servicer
in its reasonable judgment, the original Obligor remains liable on such Asset;
PROVIDED, that (a) the Servicer reasonably determines that permitting such
assumption by such person will not increase materially the risk of nonpayment
of amounts due under the related Asset, (b) such action is not prohibited by
law and will not affect adversely or jeopardize any coverage under any
Insurance Policy required to be maintained with respect to such Asset pursuant
to the Pooling and Servicing Agreement, (c) neither the Unpaid Principal
Balance nor the Asset Rate of the related Asset may be reduced and (d) if one
or more REMIC elections have been made with respect to the assets of the Trust,
no other material term of the related Asset (including, without limitation,
the amortization schedule or any other term affecting the amount or timing of
payments on such Asset) may be modified without an Opinion of Counsel to the
effect that such modification will not be treated, under the REMIC Provisions,
as an acquisition of the modified Asset by the REMIC in exchange for the
unmodified Asset on the date the modification occurs. The Servicer shall
follow its customary underwriting procedures prior to entering into any such
assumption agreement, including, without limitation, a satisfactory credit
review of any Person assuming such Asset.
SECTION 3.13. ANNUAL ACCOUNTANTS' CERTIFICATE; ANNUAL STATEMENT AS TO
COMPLIANCE.
(a) The Servicer shall deliver to the Trustee, on or before December 30 of
each year, with respect to each Pooling and Servicing Agreement that the
Servicer entered into on or before the preceding September 30, an Officer's
Certificate signed by the President or any Vice President of the Servicer, dated
as of September 30 of the preceding year, stating that (1) a review of the
activities of the Servicer during the preceding 12-month period (or since the
Cut-off Date in the case of the first such Officer's Certificate relating to any
Trust) and of its performance under the Pooling and Servicing Agreement has been
made under such Officer's supervision and (2) to the best of such Officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under the Pooling and Servicing Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such Officer and the nature and status thereof. A copy of such
certificate may be obtained by any other Holder who makes a request in writing
to the Trustee addressed to the Corporate Trust Office.
(b) In addition, on or before December 30 of each year, the Servicer, at
its expense, shall cause a firm of Independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Trustee and each applicable Rating Agency to the effect that
(1) such firm has audited the financial statements of the Servicer for the
Servicer's most recently ended fiscal year and issued its report thereon; (2)
such audit included tests of the records and documents relating to manufactured
housing installment sale contracts and mortgage loans serviced by the Servicer
for others in accordance with the requirements of the Uniform Single Attestation
Program for Mortgage Bankers, or any successor program promulgated by the
accounting profession ("USAP"); and (3) such other statements as are
contemplated under USAP, including, if called for under USAP, a statement as to
whether the Servicer's management's written assertion to such firm (which shall
be attached to the statement of such firm) that its servicing during the
applicable fiscal year complied with USAP's minimum servicing standards in all
material respects is fairly stated in all material respects. The audit tests
referred to in clause (2) of the preceding sentence shall be applied to
manufactured housing installment sale contracts and mortgage loans serviced
under the Pooling and Servicing Agreement and/or, in the sole discretion of such
firm, manufactured housing installment sale contracts and mortgage loans
serviced under pooling and servicing agreements, trust agreements or indentures
substantially similar to the Pooling and Servicing Agreement (hereinafter
referred to as "Pooling Agreements"). For purposes of such statement, such firm
may assume conclusively that all Pooling Agreements under which the Servicer is
the servicer of manufactured housing installment sale contracts and mortgage
loans for a trustee relating to certificates evidencing an interest in
manufactured housing installment sale contracts and mortgage loans are
substantially similar to one another except for any such Pooling Agreement which
by its terms specifically states otherwise.
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SECTION 3.14. SERVICING FEES.
As compensation for the services provided for a Series (including
servicing of the related Assets and administration of the related Trust) and
ordinary expenses incurred by the Servicer under the Pooling and Servicing
Agreement, on each Distribution Date the Servicer shall be entitled to receive
the Servicing Fee on each Asset from amounts collected on such Asset. Except as
otherwise expressly provided in the Pooling and Servicing Agreement, the
Servicer shall perform all of the obligations to be performed by it under the
Pooling and Servicing Agreement at its expense and without cost or charge to the
Trustee. The Servicing Fee relating to any Asset shall be payable solely from
the interest portion of each Monthly Payment or other payment of or in respect
of interest collected by the Servicer in respect of such Asset, whether from the
proceeds of any judgment, writ of attachment or levy against the related Obligor
or its assets, or from funds received by the Servicer in connection with any
Principal Prepayment in full, from Insurance Proceeds or Liquidation Proceeds or
in connection with any purchase or repurchase of an Asset; PROVIDED, HOWEVER,
that the Servicing Fee with respect to an Asset in any month shall be payable to
the Servicer out of amounts paid by the related Obligor toward the Monthly
Payment due on such Asset during such month only if the related Obligor has
remitted the entire amount of such Monthly Payment. The Servicer also shall be
entitled to additional servicing compensation as specified in Sections 3.06(c)
and 3.15 hereof. Unless otherwise provided in the Pooling and Servicing
Agreement for a Series, the Servicer may retain its Servicing Fee and any other
servicing compensation provided for in such Pooling and Servicing Agreement from
gross interest collections on the related Assets prior to depositing such
collections into the related Certificate Account.
SECTION 3.15. LATE CHARGES; PREPAYMENT FEES OR OTHER CHARGES.
To the extent permitted by law, the Pooling and Servicing Agreement and
the terms of any Asset, the Servicer may collect and retain as additional
compensation any late charges, extension fees or similar fees provided for in
the Asset.
To the extent reasonable and permitted by the terms of any Asset and by
law, the Servicer may collect from the Obligors, and retain as additional
compensation, prepayment fees, assumption fees or any fees imposed in connection
with the replacement by such Obligor of the related Standard Hazard Insurance
Policy.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Servicer shall not charge or impose upon any Obligor, nor seek to
charge or impose upon any Obligor, or assert a right to receive from any
Obligor, any fee, charge, premium or penalty that, if charged or collected,
would violate or contravene any law, including usury laws, or the terms of the
related Asset.
SECTION 3.16. MAINTENANCE OF STANDARD HAZARD INSURANCE, PRIMARY MORTGAGE
INSURANCE, AND ERRORS AND OMISSIONS COVERAGE.
(a) Standard Hazard Insurance. Except as otherwise provided in this
Section 3.16(a), the Servicer shall cause to be maintained with respect to each
Contract and Mortgage Loan one or more Standard Hazard Insurance Policies that
provide, at a minimum, the same coverage as that provided by a standard form
fire and extended coverage insurance policy that is customary for manufactured
housing or residential real property (as applicable) and which shall include
flood insurance coverage issued by a Qualified Insurer, providing coverage in an
amount at least equal to the lesser of (1) the maximum insurable value of the
related Manufactured Home or Mortgaged Property or (2) the principal balance due
from the Obligor under such Contract or Mortgage Loan; PROVIDED, HOWEVER, that
in any event the amount of coverage provided by each Standard Hazard Insurance
Policy must be sufficient to avoid the application of any co-insurance clause
contained therein. As part of its collection responsibilities, the Servicer
shall proceed to collect the premiums due on the Standard Hazard Insurance
Policies from the Obligors in accordance with the degree of skill and care that
is customarily used for such purpose in the manufactured home loan servicing
industry (in the case of Contracts) and the residential mortgage loan servicing
industry (in the case of Mortgage Loans). Each Standard Hazard Insurance Policy
caused to be maintained by the Servicer shall contain a standard loss payee
clause in favor of the Servicer and its successors and assigns. Any
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amounts received under any such policies shall be deposited initially into the
related Certificate Account and then deposited into the related Distribution
Account pursuant to Sections 3.06 and 3.07 hereof, within the respective time
frames specified in such Sections.
In lieu of causing individual Standard Hazard Insurance Policies to be
maintained with respect to each Manufactured Home and Mortgaged Property
pursuant to subsection (a) of this Section 3.16, the Servicer may, and with
respect to each Repo Property and REO Property shall, maintain one or more
blanket insurance policies, each issued by a Qualified Insurer, covering losses
on the Obligors' interests in the Assets relating to such Manufactured Homes and
Mortgaged Properties resulting from the absence or insufficiency of such
individual Standard Hazard Insurance Policies. The Servicer shall pay the
premium for any such policy on the basis described therein and shall pay any
deductible amount with respect to claims under such policy relating to the
Assets covered thereby. All amounts collected by the Servicer under any such
blanket policy and any payments by the Servicer of deductible amounts
thereunder, in each case relating to an Asset covered thereby, shall be
deposited initially into the Certificate Account pursuant to Sections 3.05 and
3.06 hereof (within the respective time frames specified in such Sections),
after payment to (or retention by) the Servicer of all Insured Expenses and
Liquidation Expenses incurred by it with respect to the Manufactured Home or
Mortgaged Property to which such recovery relates, as well as the amount of any
Advances made by the Servicer with respect to the related Asset that have not
been reimbursed to the Servicer.
(b) Primary Mortgage Insurance. The Servicer must maintain a Primary
Mortgage Insurance Policy in full force and effect on each Mortgage Loan, if
any, which is identified in the related Sales Agreement as being covered by a
Primary Mortgage Insurance Policy. Any such Primary Mortgage Insurance Policy
must insure the portion of the Unpaid Principal Balance of the related Mortgage
Loan that exceeds 75% of the value of the related Mortgaged Property (as set
forth in the appraisal obtained in connection with origination of the Mortgage
Loan) (the Mortgaged Property's "Initial Value") unless such Primary Mortgage
Insurance coverage has been waived in writing by OMI at the time it purchases
the Mortgage Loan or such Primary Mortgage Insurance is canceled under the
circumstances described below. If a covered Mortgage Loan provides for negative
amortization or the potential for negative amortization, the Primary Mortgage
Insurance Policy must also insure any increase in the Unpaid Principal Balance
of the Mortgage Loan from the original principal balance of the related Mortgage
Note. In the event that the rating assigned by any Rating Agency for any of the
related Certificates to the claims-paying ability of any related Mortgage
Insurer is reduced subsequent to the issuance of the related Certificates, the
Servicer will use its best efforts to replace each Primary Mortgage Insurance
Policy issued by the downgraded Mortgage Insurer with a new Primary Mortgage
Insurance Policy issued by an insurer whose claims-paying ability is acceptable
to OMI. The premium for any replacement policy shall not exceed the premium for
any replaced policy.
The Servicer may cancel the Primary Mortgage Insurance Policy maintained
with respect to any Mortgage Loan at the related Mortgagor's request if the
following conditions are met:
(1) The current Mortgage Loan-to-Value Ratio of the mortgage Loan
must be 80% or less. The current Mortgage Loan-to-Value Ratio must be
calculated by dividing the Unpaid Principal Balance of the Mortgage Loan
by the Initial Value of the related Mortgaged Property;
(2) The Mortgage Loan may not have been 30 days or more delinquent
at any time within the preceding twelve months; and
(3) There nay not have been any other default under the terms of the
Mortgage Loan at any time during the preceding twelve months.
The Servicer must take all steps necessary to ensure the payment by each
Mortgage Insurer of the maximum benefits available under the terms of the
related Primary Mortgage Insurance Policy. The Servicer must work diligently
with the Mortgage Insurer to determine whether such insurer will settle a claim
under a Primary Mortgage Insurance Policy by taking title to the related
Mortgaged Property or in some other manner. Upon receipt of any proceeds of a
Primary Mortgage Insurance Policy, the Servicer must deposit such proceeds into
the applicable
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Certificate Account in accordance with Sections 3.05 and 3.06 above.
(c) Errors and Omissions Coverage; Fidelity Bond. The Servicer shall keep
in force throughout the term of the Pooling and Servicing Agreement a policy or
policies of insurance issued by a Qualified Insurer covering errors and
omissions in the performance of its obligations as Servicer hereunder, including
failure to maintain insurance as required by the Pooling and Servicing
Agreement, and a fidelity bond covering the Servicer's performance under the
Pooling and Servicing Agreement. Such policy or policies and bond shall be in
such form and amount as is generally customary among Persons that service a
portfolio of manufactured housing installment sales contracts and installment
loans having an aggregate principal amount of $100 million or more and which
Persons are generally regarded as servicers acceptable to institutional
investors.
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ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS
SECTION 4.01. REMITTANCE REPORTS.
On or before the third Business Day prior to each Distribution Date, the
Servicer shall prepare a statement containing the information specified below as
to such Distribution Date (a "Remittance Report") and deliver such statement to
the Trustee. The Trustee shall forward such report to the Certificateholders on
the related Distribution Date, by mail to the addresses of such
Certificateholders as listed in the Certificate Register on the preceding Record
Date. A Remittance Report for a Distribution Date for a Series shall identify
the following items:
(1) the aggregate amount of each of the following, stated
separately, with respect to the related Assets: (A) the amount of all
scheduled principal payments on the Assets relating to such Distribution
Date, (B) the principal components and interest components of all Monthly
Payments made by the Obligors on the Assets during the related Collection
Period, (C) Principal Prepayments (including related Net Insurance
Proceeds) received by the Servicer during the related Prepayment Period,
(D) Liquidation Proceeds (including related Insurance Proceeds) and Net
Liquidation Proceeds (including related Net Insurance Proceeds) received
during the related Prepayment Period, (E) the amount of any Repurchase
Price paid by OMI, the Seller or the Servicer with respect to any of the
Contracts purchased by OMI, the Seller or the Servicer pursuant to Section
2.06 hereof during the related Prepayment Period, (F) the aggregate number
of Repo Properties and the aggregate number of REO Properties in the Trust
as of the end of the related Prepayment Period and the aggregate of the
unpaid principal balances of the related Contracts and of the related
Mortgage Loans, respectively, (G) the aggregate number and the aggregate
Unpaid Principal Balance of Outstanding Contracts and Outstanding Mortgage
Loans, stated separately, that are (i) delinquent one month (i.e., 30 to
59 days) as of the end of the related Prepayment Period, (ii) delinquent
two months (i.e., 60 to 89 days) as of the end of the related Prepayment
Period, (iii) delinquent three months (i.e., 90 days or longer) as of the
end of the related Prepayment Period and (iv) as to which repossession,
foreclosure or other comparable proceedings have been commenced as of the
end of the related Prepayment Period, (H) the amount of Realized Losses
incurred on the Assets during the related Prepayment Period and on a
cumulative basis since the Cut-off Date (the latter expressed as a dollar
amount and as a percentage of the aggregate Cut-off Date Principal
Balance) (separately identifying any Obligor Bankruptcy Losses, Special
Hazard Losses and Fraud Losses, if they are separately allocated to the
related Certificates), (I) the aggregate Scheduled Principal Balance of
the Contracts and the Mortgage Loans, stated separately, and the number of
Outstanding Contracts and Mortgage Loans, stated separately, in each case
at the end of the related Collection Period, (J) the aggregate number and
the aggregate Unpaid Principal Balance of Outstanding Contracts and
Outstanding Mortgage Loans, stated separately, for which the Obligor is
also a debtor, whether voluntary or involuntary, in a proceeding under the
Bankruptcy Code; and (K) the aggregate number and the aggregate Unpaid
Principal Balance of Outstanding Contracts and Outstanding Mortgage Loans
for which the Obligor is also a debtor, whether voluntary or involuntary,
in a proceeding under the Bankruptcy Code, stated separately, that are (i)
delinquent one month (i.e., 30 to 59 days) as of the end of the related
Prepayment Period, (ii) delinquent two months (i.e., 60 to 89 days) as of
the end of the related Prepayment Period, and (iii) delinquent three
months (i.e., 90 days or longer) as of the end of the related Prepayment
Period;
(2) the Available Distribution Amount for such Distribution Date;
(3) the amount of funds in the Distribution Account, if any, to be
allocated to pay Servicing Fees, to reimburse the Servicer for Advances
made, to reimburse OMI or the Servicer for expenses pursuant to Section
6.05 hereof, and to refund any overpayment of a Repurchase Price for an
Asset pursuant to Section 2.06(f) hereof;
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(4) the amount of the Servicing Fee for the related Collection
Period;
(5) the aggregate amount of P&I Advances required to be made by the
Servicer with respect to such Distribution Date, together with a statement
of the amount, if any, of such required P&I Advances that the Servicer
will not make in respect of such Distribution Date and of any P&I Advances
that will not be made because they are Non-Recoverable Advances;
(6) the aggregate deposits into the Certificate Account relating to
such Distribution Date and the aggregate withdrawals from the Certificate
Account for each category of withdrawal specified in Section 3.07(a)
hereof relating to such Distribution Date;
(7) in the case of a Trust (or designated assets thereof) for which
a REMIC election has been or will be made, any other information required
to be provided to Certificateholders by the REMIC Provisions; and
(8) any items relating to a specific Series of Certificates
specified in the related Pooling and Servicing Agreement.
The Trustee shall maintain a telephone number which investors may call to
ascertain, on each Distribution Date, the Certificate Principal Balance of each
Class of Certificates and the then-current Pass-Through Rate applicable to each
such Class. Such number for any Series shall initially be as specified in the
Prospectus Supplement for such Series and may only be changed after the Trustee
notes the change in such number in writing on the Remittance Report it sends to
Certificateholders.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and furnish a statement, from information provided by
the Servicer, containing the information concerning the amount of distributions
of interest and principal on the Regular Certificates and the amount of
distributions on the Residual Certificates, as well as any other information as
may be required by the Code or Regulations and that customarily would be
provided by a Trustee to Certificateholders in order to enable such
Certificateholders to prepare their federal income tax returns, to each Person
who at any time during the calendar year was a Certificateholder that
constituted a retail investor or other Certificateholder that requests such
statement, aggregated for such calendar year or portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.
SECTION 4.02. DISTRIBUTION ACCOUNT.
The Trustee shall establish and maintain a Distribution Account for the
benefit of the Certificateholders and shall deposit therein funds received with
respect to the Remittance Amount for each Distribution Date immediately upon
receipt thereof from the Servicer in accordance with Section 3.07(b) hereof. The
Distribution Account shall be an Eligible Account and shall be either held in
the Trustee's name or designated in a manner that reflects the custodial nature
of the account and that all funds in such account are held in trust for the
benefit of the Trustee.
The Servicer shall keep and maintain separate accounting, on an
Asset-by-Asset basis, for the purpose of justifying any payment to and from the
Distribution Account.
SECTION 4.03. ALLOCATION OF AVAILABLE DISTRIBUTION AMOUNT.
On each Distribution Date for a Series, the Trustee shall withdraw all
monies on deposit in the related Distribution Account in accordance with the
related Remittance Report and shall distribute such amounts in the following
order of priority:
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(1) if OAC is not the Servicer, to pay the Servicer its monthly
Servicing Fee, to the extent not previously retained or withdrawn from the
Certificate Account by such Servicer or, if OAC is the Servicer, to pay
OAC its monthly Servicing Fee in respect of a Distribution Date, but only
to the extent that the amounts on deposit in the Certificate Account and
attributable to the Available Distribution Amount for such Distribution
Date exceed the sum of all amounts to be distributed on the Certificates
of the related Series on such Distribution Date prior to the distribution
to OAC of its Servicing Fee, as described in the related Pooling and
Servicing Agreement in the Section thereof entitled "Distributions";
(2) to reimburse the Servicer from any amounts on deposit in the
Distribution Account for any Advance previously made which has become a
Non-Recoverable Advance, or to reimburse the Servicer for any other
Advance out of Related Proceeds on deposit in the Distribution Account, in
either case to the extent not previously retained or withdrawn from the
Certificate Account by the Servicer;
(3) to reimburse OMI or the Servicer for expenses incurred by or
reimbursable to them pursuant to Section 6.05 hereof;
(4) to refund any overpayment of a Repurchase Price for an Asset
pursuant to Section 2.06(f) hereof; and
(5) to distribute to the Certificateholders (or, if more than one
REMIC election has been made with respect to the Trust, to distribute to
the holders of the Regular Interests and the Residual Interest in the
Pooling REMIC), the Available Distribution Amount in accordance with the
applicable Pooling and Servicing Agreement.
SECTION 4.04. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Trustee shall comply with all federal withholding requirements
respecting payments of interest or principal to the extent of accrued original
issue discount on Certificates to each Holder of such Certificates who (a) is
not a "United States person," within the meaning of Code section 7701(a)(30),
(b) fails to furnish its TIN to the Trustee, (c) furnishes the Trustee an
incorrect TIN, (d) fails to report properly interest and dividends, or (e) under
certain circumstances, fails to provide the Trustee or the Certificateholder's
securities broker with a certified statement, signed under penalties of perjury,
that the TIN provided by such Certificateholder to the Trustee or such broker is
correct and that the Certificateholder is not subject to backup withholding. The
consent of such a Certificateholder shall not be required for such withholding.
In the event the Trustee does withhold the amount of any otherwise required
distribution from interest payments on the Assets (including principal payments
to the extent of accrued original issue discount) or P&I Advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate with any payment to such Certificateholders the amount withheld.
In addition, if any United States federal income tax is due at the time a
Non-U.S. Person transfers a Residual Certificate, the Trustee or other
Withholding Agent may (1) withhold an amount equal to the taxes due upon
disposition of such Residual Certificate from future distributions made with
respect to such Residual Certificate to the transferee thereof (after giving
effect to the withholding of taxes imposed on such transferee), and (2) pay the
withheld amount to the Internal Revenue Service unless satisfactory written
evidence of payment by the transferor of the taxes due has been provided to the
Trustee or such Withholding Agent. Moreover, the Trustee or other Withholding
Agent may (1) hold distributions on a Residual Certificate, without interest,
pending determination of amounts to be withheld, (2) withhold other amounts, if
any, required to be withheld pursuant to United States federal income tax law
from distributions that otherwise would be made to such transferee on each
Residual Certificate that it holds, and (3) pay to the Internal Revenue Service
all such amounts withheld.
SECTION 4.05. REPORTS OF SECURITY PRINCIPAL BALANCES TO THE CLEARING AGENCY.
If and for so long as any Certificate is held by the Clearing Agency, on
the second Business Day before each
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Distribution Date, the Trustee shall give oral notice to the Clearing Agency
(and shall promptly thereafter confirm in writing) the following: (a) the
amount of interest and principal to be distributed on the Certificates of such
Class on the upcoming Distribution Date, as reported in the related Remittance
Report, (b) the Record Date for such distribution, (c) the Distribution Date for
such distribution and (d) the aggregate Certificate Principal Balance of each
Class of Certificates reported pursuant to clause (10) of Section 4.01 hereof
in such month.
SECTION 4.06. PREPARATION OF REGULATORY REPORTS.
(a) Subject to the provisions of subsections (b) and (c) of this Section
4.06, the Servicer shall prepare or cause to be prepared, on behalf of the
Trust, such supplementary and periodic information, documents and reports (such
information, documents or reports are referred to hereinafter as "Periodic
Reports") as may be required pursuant to Section 12(g) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), by the rules
and regulations of the Commission thereunder or as a condition to approval of
any application for relief ("Application for Relief") hereinafter referred to
and, in connection therewith, shall prepare such applications and requests for
exemption and other relief from such provisions as it may deem appropriate. The
Servicer shall be deemed to certify as to each Periodic Report that it conforms
in all material respects to applicable reporting requirements imposed by the
Exchange Act or is otherwise in form and content appropriate for filing with the
Commission. The Servicer is hereby authorized to and shall execute all such
Periodic Reports or Applications for Relief on the Trustee's behalf and file the
same with the Commission and other required filing offices, if any, on behalf of
the Trust.
(b) Within 30 days after the beginning of the first fiscal year of any
Trust during which its obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Servicer shall prepare, or cause to
be prepared, a notice on Commission Form 15 ("Form 15") and is hereby authorized
to and shall execute such Form 15 on the related Trustee's behalf; PROVIDED,
HOWEVER, that the Servicer shall be under no obligation to prepare such notice
if the number of Certificateholders exceeds 300. The Servicer shall file any
notice on Form 15 with the Commission in accordance with the provisions of Rule
15d-6 under the Exchange Act.
(c) Notwithstanding any other provision of the Pooling and Servicing
Agreement, the Trustee has not assumed, and shall not by its performance
hereunder be deemed to have assumed, any of the duties or obligations of OMI or
any other Person with respect to (1) the registration of the Certificates
pursuant to the Securities Act, (2) the issuance or sale of the Certificates, or
(3) compliance with the provisions of the Securities Act, the Exchange Act, or
any applicable federal or state securities or other laws including, without
limitation, any requirement to update the registration statement or prospectus
relating to the Certificates in order to render the same not materially
misleading to investors.
(d) In connection with the Servicer's preparation of any Form 15 or of any
Periodic Report, the Trustee shall provide it with information which it may
reasonably request concerning the number and identity of the Holders appearing
on the Certificate Register maintained by the Certificate Registrar, but the
Trustee shall have no duty or obligation to provide information which does not
appear on the Certificate Register, including any information concerning the
ownership of Persons for whom a nominee is the Holder of record.
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ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
SECTION 5.01. POOLING REMIC INTERESTS.
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Pooling and Servicing Agreement will set forth the terms of
the Regular Interests and Residual Interest of the Pooling REMIC. Unless
otherwise specified in the Pooling and Servicing Agreement, (a) the Pooling
REMIC Regular Interests will be "regular interests" for purposes of the REMIC
Provisions but will not constitute securities or certificates of interest in the
Trust; and (b) the Trustee will be the owner of any such Regular Interests,
which may not be transferred to any person other than a successor trustee
appointed pursuant to Section 8.08 hereof unless the party desiring the transfer
obtains a Special Tax Opinion.
SECTION 5.02. THE CERTIFICATES.
The Certificates shall be designated in the Pooling and Servicing
Agreement. The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Trust Estate (or in the Issuing REMIC, if
any). On the Closing Date, unless otherwise specified in the related Pooling and
Servicing Agreement, the aggregate Certificate Principal Balance of the
Certificates will not be less than the aggregate Unpaid Principal Balance of the
underlying Assets as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received. The Certificates
will be substantially in the forms annexed to the Pooling and Servicing
Agreement. Unless otherwise provided in the Pooling and Servicing Agreement, the
Certificates of each Class will be issuable in registered form. Each Certificate
will share ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and delivered by
the Trustee and the Trustee shall cause the Certificates to be authenticated by
the Certificate Registrar to or upon the order of OMI upon receipt by the
Trustee of the Servicer Custodial Certification required by Section 2.02 hereof.
The Certificates shall be executed and attested by manual or facsimile signature
on behalf of the Trustee by an authorized Officer under its seal imprinted
thereon. Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper Officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall
represent entitlement to any benefit under the Pooling and Servicing Agreement
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form provided in the Pooling
and Servicing Agreement (in the forms of Certificates attached thereto as
Exhibits) executed by the Certificate Registrar by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their execution, except
that those Certificates delivered on the Closing Date may be dated the Accrual
Date.
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SECTION 5.03. BOOK-ENTRY CERTIFICATES.
(a) The Book-Entry Certificates will be represented initially by one or
more certificates registered in the name of CEDE & Co., as nominee of the
Clearing Agency. OMI, the Servicer and the Trustee may for all intents and
purposes (including the making of payments on the Book-Entry Certificates) deal
with the Clearing Agency as the authorized representative of the Beneficial
Owners of the Book-Entry Certificates for as long as those Certificates are
registered in the name of the Clearing Agency. The rights of Beneficial Owners
of the Book-Entry Certificates shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and Clearing
Agency Participants. The Beneficial Owners of the Book-Entry Certificates shall
not be entitled to certificates for the Book-Entry Certificates as to which they
are the Beneficial Owners, except as provided in subsection (c) below. Requests
and directions from, and votes of, the Clearing Agency, as Holder, shall not
be deemed to be inconsistent if they are made with respect to different
Beneficial Owners. Without the consent of OMI, the Servicer and the Trustee, a
Book-Entry Certificate may not be transferred by the Clearing Agency except to
another Clearing Agency that agrees to hold the Book-Entry Certificate for the
account of the respective Clearing Agency Participants and Beneficial Owners.
(b) Neither OMI, the Servicer nor the Trustee will have any liability for
any aspect of the records relating to or payment made on account of Beneficial
Owners of the Book-Entry Certificates held by the Clearing Agency, for
monitoring or restricting any transfer of beneficial ownership in a Book-Entry
Certificate or for maintaining, supervising or reviewing any records relating to
such Beneficial Owners.
(c) The Book-Entry Certificates will be issued in fully-registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (1) OMI
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities as depository with respect to
the Book-Entry Certificates and OMI is unable to locate a qualified successor
within 30 days or (2) OMI, at its option, elects to terminate the book-entry
system operating through the Clearing Agency. Upon the occurrence of either such
event, the Trustee shall notify the Clearing Agency, which in turn will notify
all Beneficial Owners of Book-Entry Certificates through Clearing Agency
Participants, of the availability of certificated Certificates. Upon surrender
by the Clearing Agency of the certificates representing the Book-Entry
Certificates and receipt of instructions for re-registration, the Trustee will
reissue the Book-Entry Certificates as certificated Certificates to the
Beneficial Owners identified in writing by the Clearing Agency. Such
certificated Certificates shall not constitute Book-Entry Certificates. All
reasonable costs associated with the preparation and delivery of certificated
Certificates shall be borne by OMI.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee will
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
If a Person other than the Trustee is appointed by the Trustee as
Certificate Registrar, such Person will give the Trustee prompt written notice
of the location, and any change in the location, of the Certificate Register,
and the Trustee shall have the right to inspect the Certificate Register at all
reasonable times and to obtain copies thereof, and the Trustee shall have the
right to rely upon a certificate executed on behalf of the Certificate Registrar
by an Officer thereof as to the names and addresses of the Holders of the
Certificates and the principal amounts and numbers of such Certificates.
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Subject to Section 5.05 below, upon surrender for registration of transfer
of any Certificate at the Corporate Trust Office of the Trustee or at any other
office or agency of the Trustee maintained for such purpose, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be exchanged
for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be destroyed
by the Certificate Registrar.
The Trustee will (or will cause the Certificate Registrar to) provide
notice to the Trustee of each transfer of a Certificate, and will provide the
Trustee and Servicer with an updated copy of the Certificate Register on January
1 and July 1 of each year (or at such other time as the Servicer may request).
SECTION 5.05. RESTRICTIONS ON TRANSFER.
(a) Securities Law Compliance. No transfer of any Private Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify OMI, the Trustee and the Servicer against any liability that may
result if any transfer of such Certificates by such Holder is not exempt from
registration under the Securities Act and all applicable state securities laws
or is not made in accordance with such federal and state laws. Neither OMI, the
Trustee nor the Servicer is obligated to register or qualify any Private
Certificate under the Securities Act or any other securities law or to take any
action not otherwise required under these Standard Terms or the related Pooling
and Servicing Agreement to permit the transfer of such Certificates without such
registration or qualification. The Trustee shall not register any transfer of a
Private Certificate (other than a Residual Certificate) unless and until the
prospective transferee provides the Trustee with a Transferee Agreement or, if
the Certificate to be transferred is a Rule 144A Certificate, a Rule 144A
Agreement certifying to facts which, if true, would mean that the proposed
transferee is a Qualified Institutional Buyer, and unless and until the transfer
otherwise complies with the provisions of this Section 5.05. If a proposed
transfer does not involve a Rule 144A Certificate or the transferee's Rule 144A
Agreement does not certify to facts which, if true, would mean that the
transferee is a Qualified Institutional Buyer, (i) the Servicer and the Trustee
shall require that the transferor and transferee certify as to the factual basis
for the registration exemption(s) relied upon and (ii) if such transfer is made
within three years after the acquisition thereof by a non- Affiliate of OMI from
OMI or an Affiliate of OMI, the Servicer or the Trustee may also may require an
Opinion of Counsel that such transfer may be made without registration or
qualification under the Securities Act and applicable state securities laws,
which Opinion of Counsel shall not be obtained at the expense of OMI, the
Trustee or the Servicer. Notwithstanding the foregoing, no Rule 144A Agreement,
Transferee Agreement or Opinion of Counsel shall be required in connection with
the initial transfer of the Private Certificates and no Opinion of Counsel shall
be required in connection with the transfer of the Private Certificates by a
broker or dealer, if such broker or dealer was the initial transferee.
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OMI shall provide to any transferee Holder of a Rule 144A Certificate and
any prospective transferee designated by such Holder information regarding the
related Certificates and the related Assets and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A, upon the request for such information by such Holder.
(b) ERISA Compliance.
(1) BOOK-ENTRY CERTIFICATES. No transfer of all or any portion of
any Class of Book-Entry Certificates that are ERISA Restricted
Certificates shall be made to a transferee that is a Plan Investor unless
such transfer qualifies for an exemption from application of the
prohibited transaction provisions of Sections 406 and 407 of ERISA
and Section 4975 of the Code, and each Beneficial Owner of such a
Certificate shall be deemed to have represented, by virtue of its
acquisition of such a Certificate, either (i) that it is not a Plan
Investor or (ii) that an exemption from application of the prohibited
transaction provisions of Sections 406 and 407 of ERISA and Section
4975 of the Code will apply to the acquisition, holding and resale
of such Certificates by the Beneficial Owner thereof.
(2) CERTIFICATED CERTIFICATES. No transfer of all or any portion of
any Class of Certificates that (A) are not Book-Entry Certificates and (B)
are ERISA Restricted Certificates shall be made unless and until the
prospective transferee provides the Trustee and the Servicer with a
properly completed and executed Benefit Plan Affidavit, together with a
Benefit Plan Opinion if required in order to comply with such Affidavit.
Notwithstanding anything else to the contrary herein, any purported
transfer of such a Certificate to or on behalf of a Plan Investor without
delivery of a Benefit Plan Opinion shall be null and void.
(c) Residual Certificates. The Trustee shall not register any transfer of
a Residual Certificate (including any beneficial interest therein) unless it
shall have received the written consent of the Servicer. No Residual Certificate
may be transferred to a Disqualified Organization. The Servicer will not consent
to any proposed transfer or sale of a Residual Certificate (1) to any investor
that it knows is a Disqualified Organization or (2) if the transfer involves
less than an entire interest in a Residual Certificate, unless (A) the interest
transferred is an undivided interest or (B) the transferor or the transferee
provides the Servicer with an Opinion of Counsel obtained at its own expense to
the effect that the transfer will not jeopardize the REMIC status of any REMIC
consisting of assets of the Trust. The Servicer's consent to any transfer is
further conditioned upon the Servicer's receipt from the proposed transferee of
(x) a Residual Transferee Agreement, (y) a Benefit Plan Affidavit, and (z)
either (A) if the transferee is a Non-U.S. Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit 8-A to Exhibit 8 hereto
and a certificate of the transferor stating whether the Residual Certificate has
"tax avoidance potential" as defined in Treasury Regulations Section
1.860G-3(a)(2), or (B) if the transferee is a U.S. Person, an affidavit in
substantially the form attached as Exhibit 8-B to Exhibit 8 hereto. In addition,
if a proposed transfer involves a Private Certificate, the transfer shall be
subject to the additional restrictions set forth in Section 5.05(a) above.
Notwithstanding the foregoing, no Opinion of Counsel shall be required in
connection with the initial transfer of the Residual Certificates or their
transfer by a broker or dealer, if such broker or dealer was the initial
transferee. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to, or the Trustee may refuse to
recognize, a transfer of a Residual Certificate, but only to the extent
necessary to avoid a risk of disqualification as a REMIC of a REMIC consisting
of Trust assets or the imposition of a tax upon a REMIC. Any attempted transfer
in violation of the foregoing restrictions shall be null and void and shall not
be recognized by the Trustee.
If a tax or a reporting cost is borne by a REMIC consisting of Trust
assets as a result of the transfer of a Residual Certificate or any beneficial
interest therein in violation of the restrictions set forth in this Section, the
transferor shall pay such tax or cost and, if such tax or cost is not so paid,
the Trustee, upon notification from the Servicer, shall pay such tax or cost or
may pay such tax or reporting cost with amounts that otherwise would have been
paid to the transferee of the Residual Certificate (or beneficial interest
therein). In that event, neither the transferee nor the transferor shall have
any right to seek repayment of such amounts from OMI, the Trustee, the REMIC,
the Servicer, or the other Holders of any of the Certificates, and none of such
parties shall have any liability
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for payment of any such tax or reporting cost. In the event that a Residual
Certificate is transferred to a Disqualified Organization, the Servicer shall
make, or cause to be made, available the information necessary for the
computation of the excise tax imposed under section 860E(e) of the Code.
SECTION 5.06. ACCRUAL OF INTEREST ON THE CERTIFICATES.
Certificates entitled to receive interest in accordance with the related
Pooling and Servicing Agreement shall accrue interest at the applicable
Pass-Through Rates on the basis of a 360-day year consisting of twelve 30-day
months and on the assumption that each Interest Accrual Period consists of 30
days.
SECTION 5.07. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless (the unsecured agreement of an institutional holder being
sufficient for such purpose), then, in the absence of notice to the Trustee or
the Certificate Registrar that such Certificate has been acquired by a BONA FIDE
purchaser, the Trustee shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
the same Class, tenor and denomination or Percentage Interest. Upon the issuance
of any new Certificate under this Section, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee and the Certificate Registrar) connected
therewith. Every new Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued on the Closing Date, regardless of whether any destroyed, lost
or stolen Certificate in lieu of which such new Certificate was issued shall be
found at any time.
SECTION 5.08. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Certificate,
the Servicer, the Trustee and any agent of the Servicer or of the Trustee may
treat the Person in whose name any Certificate is registered on the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions on such Certificate and for all other purposes whatsoever (whether
or not such Certificate is overdue), and neither the Servicer, the Trustee nor
any agent of the Servicer or the Trustee shall be affected by notice to the
contrary.
SECTION 5.09. APPOINTMENT OF PAYING AGENT.
The Trustee, at its own expense, may appoint a Paying Agent approved by
OMI for the purpose of making distributions to Certificateholders. The Trustee
shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee.
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ARTICLE VI
OMI AND THE SERVICER
SECTION 6.01. LIABILITY OF OMI AND THE SERVICER.
OMI and the Servicer each shall be liable in accordance with the terms of
the Pooling and Servicing Agreement only to the extent of the obligations
specifically imposed by the Pooling and Servicing Agreement and undertaken
hereunder by OMI or the Servicer, respectively.
SECTION 6.02. OMI'S REPRESENTATIONS AND WARRANTIES.
OMI represents and warrants to the Trustee, as of the date of a Pooling
and Servicing Agreement and as of the related Closing Date, as follows:
(a) OMI has been duly incorporated and is validly existing as a
corporation under the laws of the State of North Carolina and is in good
standing under such laws, with full power and authority to own its properties
and conduct its business as now conducted by it and to enter into and perform
its obligations under the Pooling and Servicing Agreement, and has duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction wherein it conducts any material business or in
which the performance of its duties under the Pooling and Servicing Agreement
would require such qualification.
(b) OMI has all requisite corporate power and authority to own its
properties and to conduct any and all business required or contemplated by the
Pooling and Servicing Agreement to be conducted by OMI and to perform the
covenants and obligations to be performed by it hereunder; the execution and
delivery by OMI of the Pooling and Servicing Agreement are within the corporate
power of OMI and have been duly authorized by all necessary corporate action on
the part of OMI; and neither the execution and delivery of the Pooling and
Servicing Agreement by OMI, nor the consummation by OMI of the transactions
herein contemplated, nor compliance with the provisions hereof by OMI, will (1)
conflict with or result in a breach of, or will constitute a default under, any
of the provisions of the articles of incorporation or by-laws of OMI or any law,
governmental rule or regulation, or any judgment, decree or order binding on OMI
or its properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which OMI is a party or by which it is
bound or (2) result in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, deed of trust, contract or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by OMI
under the Pooling and Servicing Agreement have been duly authorized, executed
and delivered by OMI and, assuming due authorization, execution and delivery
thereof by all other parties thereto, constitute legal, valid and binding
agreements enforceable against OMI in accordance with their terms, subject, as
to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
or other similar laws affecting creditors' rights generally from time to time in
effect and to general principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any state, federal or other governmental
authority by OMI is required in connection with the authorization, execution or
delivery of the Pooling and Servicing Agreement or the performance by OMI of the
covenants and obligations to be performed by it hereunder.
(e) As of the Closing Date, no Proceedings are pending or, to the best of
OMI's knowledge, threatened against OMI that would prohibit its entering into
the Pooling and Servicing Agreement or performing its obligations under the
Pooling and Servicing Agreement, including assisting in the issuance of the
Certificates.
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(f) OMI has obtained or made all necessary consents, approvals, waivers
and notifications of stockholders, creditors, lessors and other nongovernmental
persons, in each case, in connection with the execution and delivery of the
Pooling and Servicing Agreement, and the consummation of all the transactions
herein contemplated.
(g) OMI does not believe, nor does it have any reason or cause to believe,
that it cannot perform its obligations under the Pooling and Servicing
Agreement.
Upon discovery by any of OMI, the Servicer or the Trustee of a breach of
any of the foregoing representations, warranties and covenants that materially
and adversely affects the interest of the Certificateholders in any underlying
Asset, the party discovering such breach shall give prompt written notice
thereof (but in no event later than two Business Days following such discovery)
to the other parties hereto.
SECTION 6.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER.
The Servicer hereby represents, warrants and covenants to the Trustee, as
of the date hereof and as of the Closing Date, as follows:
(a) The Servicer has been duly incorporated and is validly existing as a
corporation under the laws of the State of North Carolina (or the state of its
incorporation, if the Servicer is not OAC) and is in good standing under such
laws, with full power and authority to own its properties and conduct its
business as now conducted by it and to enter into and perform its obligations
under the Pooling and Servicing Agreement, and has duly qualified to do business
as a foreign corporation and is in good standing under the laws of each
jurisdiction wherein it conducts any material business or in which the
performance of its duties under the Pooling and Servicing Agreement would
require such qualification, except where the failure so to qualify would not
have a material adverse effect on the performance of its obligations under the
Pooling and Servicing Agreement. The Servicer holds all material licenses,
certificates, franchises, and permits from all governmental authorities
necessary for the conduct of its business and will have received no notice of
proceedings relating to the revocation of any such license, certificate or
permit, that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would affect materially and adversely the conduct
of the business, results of operations, net worth or condition (financial or
otherwise) of the Servicer.
(b) The Servicer has all requisite corporate power and authority to own
its properties and to conduct any and all business required or contemplated by
the Pooling and Servicing Agreement to be conducted by the Servicer and to
perform the covenants and obligations to be performed by it hereunder; the
execution and delivery by the Servicer of the Pooling and Servicing Agreement
are within the corporate power of the Servicer and have been duly authorized by
all necessary corporate action on the part of the Servicer; and neither the
execution and delivery of the Pooling and Servicing Agreement by the Servicer,
nor the consummation by the Servicer of the transactions herein contemplated,
nor compliance with the provisions hereof by the Servicer, will (1) conflict
with or result in a breach of, or will constitute a default under, any of the
provisions of the articles of incorporation or by-laws of the Servicer or any
law, governmental rule or regulation, or any judgment, decree or order binding
on the Servicer or its properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which the Servicer is a
party or by which it is bound or (2) result in the creation or imposition of any
lien, charge or encumbrance upon any of its property pursuant to the terms of
any such indenture, mortgage, deed of trust, contract or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Servicer under the Pooling and Servicing Agreement have been duly authorized,
executed and delivered by the Servicer and, assuming due authorization,
execution and delivery thereof by all other parties thereto, constitute legal,
valid and binding agreements enforceable against the Servicer in accordance with
their terms, subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity.
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(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any federal, state or other governmental
authority by the Servicer is required in connection with the authorization,
execution or delivery of the Pooling and Servicing Agreement or the performance
by the Servicer of the covenants and obligations to be performed by it
hereunder.
(e) No Proceedings are pending or, to the best of the Servicer's
knowledge, threatened against the Servicer that would prohibit its entering into
the Pooling and Servicing Agreement or performing its obligations under the
Pooling and Servicing Agreement, including assisting in the issuance of the
Certificates.
(f) The Servicer maintains an errors and omissions policy and fidelity
bond that covers the Servicer's performance under the Pooling and Servicing
Agreement and such policy and bond are in full force and effect.
(g) The Servicer has obtained or made all necessary consents, approvals,
waivers and notifications of stockholders, creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution and
delivery of the Pooling and Servicing Agreement, and the consummation of all the
transactions herein contemplated.
(h) The Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform its obligations under the Pooling and Servicing
Agreement.
Upon discovery by any of OMI, the Servicer or the Trustee of a breach of
any of the foregoing representations, warranties and covenants that materially
and adversely affects the interest of the Certificateholders in any underlying
Asset, the party discovering such breach shall give prompt written notice
thereof (but in no event later than two Business Days following such discovery)
to the other parties hereto.
SECTION 6.04. CORPORATE EXISTENCE.
Subject to the provisions of the following paragraph, OMI and the Servicer
each will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction in which it is incorporated 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 the Pooling and
Servicing Agreement, any Certificates or any of the Assets included in the Trust
Estate, and to perform its duties under the Pooling and Servicing Agreement.
Any Person (a) into which OMI or the Servicer may be merged or
consolidated, (b) that may result from any merger, conversion or consolidation
to which OMI or the Servicer shall be a party, (c) that may succeed to the
business of OMI or the Servicer, or (d) to which OMI or the Servicer may
transfer all of its assets, shall be the successor to OMI or the Servicer
hereunder, respectively, without the execution or filing of any document or any
further act by any of the parties to the Pooling and Servicing Agreement,
anything herein to the contrary notwithstanding; PROVIDED, that any such
successor to the Servicer must agree in writing to be bound by each of the
Servicer's obligations hereunder and that each applicable Rating Agency must
deliver to the Trustee a letter to the effect that such successorship shall not
result in a downgrading of the rating initially assigned by the Rating Agency to
any Class of Certificates as to which OMI has requested a rating from such
Rating Agency.
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SECTION 6.05. LIMITATION ON LIABILITY OF OMI, THE SERVICER AND OTHERS.
Neither OMI, the Servicer nor any of the directors, officers, employees or
agents of any of OMI or the Servicer shall be under any liability to the Trust
or the Certificateholders and all such Persons shall be held harmless for any
action taken or for refraining from the taking of any action in good faith
pursuant to the Pooling and Servicing Agreement, or for errors in judgment;
PROVIDED, HOWEVER, that this provision shall not protect any such Person against
any breach of warranties or representations made herein or against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. OMI, the Servicer and any of the directors,
officers, employees or agents of either OMI or the Servicer may rely in good
faith on any document of any kind which, PRIMA FACIE, is properly executed and
submitted by any Person respecting any matters arising hereunder. Neither OMI
nor the Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
the Pooling and Servicing Agreement and such action in its opinion does not
involve it in any expense or liability, except as provided in Section 10.01(b)
hereof; PROVIDED, HOWEVER, that OMI or the Servicer may each in its discretion
undertake any such action that it deems necessary or desirable with respect to
the Pooling and Servicing Agreement and the rights and duties of the parties
thereto and the interests of the Certificateholders thereunder if the
Certificateholders offer to OMI or the Servicer, as the case may be, reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby.
SECTION 6.06. SERVICER RESIGNATION.
The Servicer shall not resign from the obligations and duties imposed on
it under the Pooling and Servicing Agreement, except (a) upon appointment of a
successor servicer and receipt by the Trustee of a letter from each applicable
Rating Agency that such a resignation and appointment will not, in and of
itself, result in a downgrading of any rated Certificates or (b) upon
determination by its Board of Directors that the performance of its duties under
the Pooling and Servicing Agreement is no longer permissible under applicable
law. Any such determination permitting the resignation of the Servicer shall be
evidenced by a resolution of its Board of Directors and an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 7.02
hereof.
SECTION 6.07. ASSIGNMENT OR DELEGATION OF DUTIES BY THE SERVICER AND OMI.
(a) The Servicer may at any time without notice or consent delegate
certain computational, data processing, collection and foreclosure duties
hereunder to any entity. No such delegation shall relieve the Servicer in any
respect of its responsibility with respect to such duties.
(b) Neither the Servicer nor OMI may assign the Pooling and Servicing
Agreement or any of its rights, power, duties or obligations hereunder (except
as provided in Section 6.07(a) above), provided that the Servicer and OMI may
assign the Pooling and Servicing Agreement in connection with a consolidation,
merger, conveyance, transfer or lease made in compliance with Section 6.04
hereof.
(c) Except as provided in Sections 6.04 and 6.06 hereof, the duties and
obligations of the Servicer and OMI under the Pooling and Servicing Agreement
shall continue until the Pooling and Servicing Agreement shall have been
terminated as provided in Section 9.01 hereof, and shall survive the exercise by
the Trustee of any right or remedy under the Pooling and Servicing Agreement, or
the enforcement by the Trustee of any provisions of the Pooling and Servicing
Agreement.
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SECTION 6.08. OMI AND SERVICER MAY OWN CERTIFICATES.
OMI, the Servicer and any Affiliate of the foregoing may in its individual
or any other capacity become the owner or pledgee of Certificates with the same
rights as it would have if it were not OMI, the Servicer or an Affiliate of OMI
or the Servicer.
SECTION 6.09. PROTECTION OF TRUST ESTATE.
Except as limited by Section 2.02(c)(2), Section 2.02(c)(3) or Section
2.03(a) above, the Servicer will execute and deliver from time to time all
amendments to the Pooling and Servicing Agreement and all financing statements,
continuation statements, instruments of further assurance and other instruments
necessary or advisable in order to, and will take such other action as the
Trustee deems necessary or advisable in order to:
(a) grant to the Trustee more effectively all or any portion of the Trust
Estate;
(b) preserve and defend the Trust's title to the Trust Estate and the
rights therein of the Trustee and the Holders of Certificates against the claims
of all persons and parties;
(c) maintain or preserve the lien (and the priority thereof) created by
the Pooling and Servicing Agreement or to carry out more effectively the
purposes hereof (including the filing of continuation statements under the UCC
as necessary);
(d) perfect, publish notice of, or protect the validity of any grant made
or to be made pursuant to the Pooling and Servicing Agreement; or
(e) enforce any of the related Asset Documents.
OMI and the Servicer each hereby designates the Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 6.09; PROVIDED, that the
Trustee shall have no duty to determine whether the filing of any financing
statement shall be necessary or to file such statements except upon written
request of OMI or the Servicer. After execution of any continuation statement or
other instrument pursuant to this Section, the Trustee shall deliver such
instrument to the Servicer for filing. Promptly after filing any such instrument
or causing any such instrument to be filed, the Servicer shall deliver an
Officer's Certificate, signed by an Officer of the Servicer, to the Trustee
stating that such continuation statement or other instrument has been filed.
The Servicer shall pay or cause to be paid, on behalf of the Trust, any
taxes levied on the account of the ownership by the Trust of the related Assets.
SECTION 6.10. PERFORMANCE OF OBLIGATIONS.
The Servicer shall not take any action, and will use its best efforts not
to permit any action to be taken by others, that would release any Person from
any of such Person's covenants or obligations under any of the related Asset
Documents or under any instrument included in the Trust Estate, or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the related Asset
Documents or any such instrument, except as expressly provided in the Pooling
and Servicing Agreement or such Asset Documents or other instrument or unless
such action will not adversely affect the interests of the Holders of the
Certificates.
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ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS
SECTION 7.01. EVENTS OF DEFAULT.
Any of the following acts or occurrences shall constitute an Event of
Default by the Servicer:
(a) any failure by the Servicer to remit funds in the Certificate Account
to the Distribution Account or to make a required P&I Advance that is not deemed
by the Servicer to be a Non-Recoverable Advance, in either case as required by
Section 3.07(b) hereof, and the continuance of such failure unremedied for a
period of five days after the date upon which such deposit, payment or
remittance was due;
(b) any failure on the part of the Servicer duly to observe or perform in
any material respect any of the covenants or agreements on the part of the
Servicer (other than covenants referred to in clause (a) above) contained in the
Certificates or in the Pooling and Servicing Agreement, which failure continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of
Certificates of a Series entitled to at least 25% of the related Voting Rights;
(c) the issuance of a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, against the
Servicer, and the remaining of such decree or order in force undischarged or
unstayed for a period of 60 consecutive days;
(d) the Servicer's consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of, or relating to, the Servicer or of, or
relating to, all or substantially all of the property of the Servicer; or
(e) the Servicer's (1) admission in writing of its inability to pay its
debts generally as they become due, (2) filing of a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, (3) making of an assignment for the benefit of its
creditors, or (4) voluntarily suspending payment of its obligations.
If an Event of Default concerning the Servicer shall occur hereunder,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied or waived, the Trustee may, and at the direction of the
Holders of Certificates evidencing greater than 50% of the Voting Rights, shall,
by notice then given in writing to the Servicer, terminate all of the rights and
obligations of the Servicer as servicer. On and after the receipt by the
Servicer of any such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Certificates (except its rights as a
Holder thereof) or the Contracts or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section 7.01 (PROVIDED, HOWEVER, that the
Servicer shall continue to be entitled to receive all amounts accrued and owing
to it as Servicer under the Pooling and Servicing Agreement on or prior to the
occurrence of a Event of Default specified in Section 7.01(a) above or, in the
case of any other Event of Default, on or prior to the date of such
termination); and, without limitation, the Trustee hereby is authorized and
empowered on behalf of the Servicer, as attorney-in-fact or otherwise, to
execute and deliver any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Contracts and related documents or otherwise.
The Servicer shall cooperate with the Trustee in effecting the termination
of the responsibilities and rights of the Servicer hereunder, including, without
limitation, (1) transferring to the Trustee for administration by it of all
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cash amounts that shall be held at the time by the Servicer for deposit, shall
have been deposited by the Servicer into the Servicing Account, the Certificate
Account or the Distribution Account, or shall be received thereafter with
respect to a Contract, and (2) the prompt provision to the Trustee (in no event
later than ten Business Days subsequent to its receipt of such notice of
termination) of all documents and records, electronic and otherwise, reasonably
requested by the Trustee or its designee in order for the Trustee or its
designee to assume and carry out the duties and obligations that otherwise were
to have been performed and carried out by the Servicer under the Pooling and
Servicing Agreement but for the termination of the Servicer.
Upon any termination of the Servicer pursuant to this Section, the Trustee
or its designee shall pay over to the Servicer that portion of any future
proceeds of the related Assets that, if it were acting hereunder at such future
time, it would be permitted to retain or withdraw from the Certificate Account
or Distribution Account in consideration of, or in reimbursement for, previous
services performed, or advances made, by it or for other matters for which it is
entitled to reimbursement pursuant hereto or to the terms of the Pooling and
Servicing Agreement. Prior to appointment of any successor Servicer, the Trustee
must notify the Rating Agency in writing of the identity of such prospective
successor.
SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof or resigns pursuant to Section 6.06 hereof, the
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under the Pooling and Servicing Agreement and in connection with the
transactions provided for herein and shall be subject to all the
responsibilities, duties and liabilities placed on the Servicer by the terms and
provisions hereof. As compensation therefor, the Trustee, except as provided in
Section 7.01 hereof, shall be entitled to such compensation (whether payable out
of the Distribution Account or otherwise) as the Servicer would have been
entitled to receive hereunder if no such notice of termination had been given,
as well as all protections and indemnification afforded the Servicer pursuant to
Section 6.05 above. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
finance institution having a net worth of not less than $40,000,000 and the
regular business of which shall have included, for at least one year prior to
such appointment, the servicing of a portfolio of manufactured housing
receivables of not less than $100,000,000, as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. No appointment of a successor to the
Servicer shall be effective until the assumption by the successor of all future
responsibilities, duties and liabilities of the Servicer under the Pooling and
Servicing Agreement. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
or an Affiliate of the Trustee shall act as Servicer hereunder as provided
above. Notwithstanding any of the foregoing, the successor Servicer shall not be
required to purchase any Assets from the Trust pursuant to these Standard Terms
except (i) under Section 2.06(a)(2) hereof to the extent the obligation to
repurchase arose out of a breach of a representation, warranty or covenant by
the successor Servicer and (ii) under Section 2.06(b) hereof to the extent the
Servicer's obligation to effect remedial action as described in such Section
arose after the successor Servicer began serving as Servicer. It is understood
that any predecessor Servicer shall remain liable for any breaches of
representations, warranties and covenants that it committed while it was the
Servicer, and shall remain responsible for effecting remedial actions described
in Section 2.06(b) hereof (and for repurchasing Assets pursuant to such Section
2.06(b)) to the extent the obligation to undertake such remedial action arose
while such predecessor Servicer was the Servicer hereunder.
In connection with the appointment of a successor Servicer, the Trustee
may make such arrangements for the compensation of such successor servicer out
of payments on the related Assets as it and such successor shall agree;
PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the Servicer under the terms of the Pooling and Servicing Agreement.
The Trustee and such successor servicer shall take such action, consistent with
the Pooling and Servicing Agreement, as shall be necessary to effectuate any
such succession.
Any successor to the Servicer shall maintain in force during the term of
its service as Servicer the policy or policies that the Servicer is required to
maintain pursuant to Section 3.16(c) hereof.
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Upon any Event of Default described hereunder, the Trustee, in addition to
the rights specified in this Section, shall have the right, in its own name and
as "Trustee," to take all actions now or hereafter existing at law, in equity or
by statute to enforce its rights and remedies and to protect the interests of
the Certificateholders, and enforce the rights and remedies of the
Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and debt
in connection therewith). No remedy provided for by the Pooling and Servicing
Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy and no delay or omission
to exercise any right or remedy shall impair any such right or remedy or shall
be deemed to be a waiver of any Event of Default. Amounts payable to the Trustee
to reimburse it for any expenses it incurs in connection with any actions taken
by it pursuant to this paragraph are intended to constitute administrative
expenses. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any
Certificateholder in any such Proceeding.
For the purposes of this Section 7.02 and Section 7.03 hereof, the Trustee
shall not be deemed to have knowledge of a Default or an Event of Default
hereunder unless an Officer of the Trustee having direct responsibility for the
administration of the Pooling and Servicing Agreement has actual knowledge
thereof or unless written notice of any Event of Default is received by the
Trustee and such notice references the Certificates or the Trust.
SECTION 7.03. NOTIFICATIONS TO SERVICER AND TO CERTIFICATEHOLDERS.
(a) Upon obtaining actual knowledge of any Default, the Trustee shall
promptly notify the Servicer and each Certificateholder (at their respective
addresses appearing in the Certificate Register) thereof.
(b) Upon any termination of, or appointment of a successor to, the
Servicer pursuant to Section 7.02 hereof, the Trustee shall give prompt written
notice thereof to the Certificateholders at their respective addresses appearing
in the Certificate Register.
(c) As soon as practicable after the Trustee's obtaining knowledge of the
occurrence of an Event of Default, the Trustee shall transmit by certified mail
to all Holders of the Certificates (at their respective addresses appearing in
the Certificate Register) notice of such Event of Default or occurrence known to
the Trustee, unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. DUTIES OF TRUSTEE.
If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by the Pooling and Servicing
Agreement, and shall use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs. Prior to the occurrence of an Event of Default or after all
Events of Default which may have occurred have been cured or waived, the Trustee
shall exercise such of the rights and powers vested in it by the Pooling and
Servicing Agreement, and shall use the same degree of care and skill in their
exercise, as a corporate trustee would exercise or use under the circumstances
in the administration of a corporate trust agreement.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of the Pooling and Servicing Agreement, shall examine them to determine whether
they conform to the requirements of
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the Pooling and Servicing Agreement; PROVIDED, HOWEVER, that the Trustee shall
be under no duty to recalculate, verify or recompute the information provided to
it hereunder by OMI or the Servicer. If any such instrument is found not to
conform to the requirements of the Pooling and Servicing Agreement in a material
manner, the Trustee shall take action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to the Trustee's
satisfaction, the Trustee will provide notice thereof to the related
Certificateholders.
No provision of the Pooling and Servicing Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(a) prior to the occurrence of an Event of Default with respect to
the Servicer of which the Trustee has notice or knowledge, and after the
curing or waiver of any such Event of Default, the duties and obligations
of the Trustee shall be determined solely by the express provisions of the
Pooling and Servicing Agreement, the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set
forth in the Pooling and Servicing Agreement, no implied covenants or
obligations shall be read into the Pooling and Servicing Agreement against
the Trustee and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee that conform to the requirements of
the Pooling and Servicing Agreement;
(b) the Trustee shall not be liable in its individual capacity for
any error of judgment made in good faith by an Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(c) the Trustee shall not be liable in its individual capacity with
respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Certificates of a
Series entitled to at least 25% of the related Voting Rights relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under the Pooling and Servicing Agreement;
(d) Any determination of negligence or bad faith of the Trustee
shall be made only upon a finding that there is clear and convincing
evidence (and not upon the mere preponderance of evidence) thereof in a
proceeding before a court of competent jurisdiction in which the Trustee
has had an opportunity to defend; and
(e) in no event shall the Trustee be held liable for the actions or
omissions of the Servicer or OMI (excepting the Trustee's own actions as
Servicer), and in connection with any action or claim or recovery sought
against the Trustee based upon facts involving the acts or omissions of
the Servicer or OMI, or involving any allegation or claim of liability or
recovery against the Trustee by the Servicer or by OMI, the Trustee shall
not be held to a greater standard of care than the Servicer or OMI would
be held in such situation.
Except as specifically required herein, the Trustee shall not be required
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, unless such risk or liability relates to its
ordinary services hereunder.
SECTION 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 8.01 hereof:
(1) In the absence of bad faith, the Trustee may rely, and shall be
protected in acting or
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refraining from acting in reliance upon, any resolution, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties. Further, the Trustee may accept a copy of
the vote of the Board of Directors of any party certified by its clerk or
assistant clerk or secretary or assistant secretary as conclusive evidence
of the authority of any person to act in accordance with such vote, and
such vote may be considered as in full force and effect until receipt by
the Trustee of written notice to the contrary.
(2) The Trustee may rely, in the absence of bad faith on its part,
upon a certificate of an Officer of the appropriate Person whenever in the
administration of the Pooling and Servicing Agreement the Trustee shall
deem it desirable that a matter be proved or established (unless other
evidence be prescribed herein specifically) prior to taking, suffering or
omitting any action hereunder.
(3) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such written
advice or Opinion of Counsel.
(4) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by the Pooling and Servicing Agreement or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of the Pooling and
Servicing Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby.
(5) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Holders of Certificates of a Series entitled to at least 25% of the
related Voting Rights; PROVIDED, HOWEVER, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation, in the
opinion of the Trustee, is not assured to the Trustee by the security
afforded to it by the terms of the Pooling and Servicing Agreement, the
Trustee may require indemnity against such expense or liability as a
condition to taking any such action. The expense of every such examination
shall be paid by the Servicer or, if paid by the Trustee, shall be repaid
by the Servicer upon demand.
(6) The Trustee may execute any of the trusts or powers under the
Pooling and Servicing Agreement or perform any duties hereunder either
directly or by or through agents, attorneys or co-trustees and the Trustee
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it under the Pooling and
Servicing Agreement.
(7) Whenever the Trustee is authorized herein to require acts or
documents in addition to those required to be provided it in respect of
any matter, it shall be under no obligation to make any determination as
to whether such additional acts or documents should be required unless
obligated to do so under Section 8.01 hereof.
(8) The Trustee shall not be deemed to have notice or knowledge of
any matter, including, without limitation, any Event of Default, unless
one of its Officers having direct responsibility for the administration of
the Pooling and Servicing Agreement has actual knowledge or record thereof
or unless written notice thereof is received by the Trustee at the
Corporate Trust Office and such notice references the Certificates
generally, OMI, the Trust or the Pooling and Servicing Agreement.
(9) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in
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good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by the Pooling and Servicing Agreement.
(10) The permissive right or authority of the Trustee to take any
action enumerated in the Pooling and Servicing Agreement shall not be
construed as a duty or obligation.
Certificateholders shall have rights to institute suits, actions or
proceedings in equity or at law upon or under or with respect to the Pooling and
Servicing Agreement only under the circumstances described in the third
paragraph of Section 11.03 hereof.
(b) All rights of action under the Pooling and Servicing Agreement or
under any of the Certificates enforceable by the Trustee may be enforced by it
without the possession of any of the Certificates, or the production thereof at
the trial or other Proceeding relating thereto, and any such suit, action or
Proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of the
Pooling and Servicing Agreement.
SECTION 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR ASSETS.
The recitals contained in the Pooling and Servicing Agreement and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of OMI or the Servicer and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations or warranties as to the validity or sufficiency of the
Pooling and Servicing Agreement or of the Certificates (other than the signature
and countersignature of the Trustee on the Certificates) or of any underlying
Asset or related document. The Trustee shall not be accountable for the use or
application by OMI of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Servicer in
respect of the underlying Assets or deposited in or withdrawn from the Servicing
Account, the Certificate Account or the Distribution Account other than any
funds held by or on behalf of the Trustee in accordance with the Pooling and
Servicing Agreement.
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SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES.
The Trustee, in its individual capacity or any other capacity, may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee.
SECTION 8.05. TRUSTEE'S FEES AND EXPENSES.
The Servicer shall pay to the Trustee from time to time, pursuant to the
Pooling and Servicing Agreement or a separate fee agreement, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts created under the Pooling and Servicing
Agreement and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and shall reimburse the Trustee for all reasonable
expenses, disbursements and advances (other than any expenses incurred by the
Trustee in connection with its assumption of the obligations of the Servicer
pursuant to Section 7.02 hereof) incurred or made by the Trustee in accordance
with any of the provisions of the Pooling and Servicing Agreement (including but
not limited to the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Servicer and held harmless against any loss, liability or
expense, including reasonable attorney's fees, incurred as a result of or in
connection with the Pooling and Servicing Agreement or the Certificates,
including, but not limited to, any such loss, liability, or expense incurred in
connection with any legal action against the Trust or the Trustee or any
director, officer, employee or agent thereof, or the performance of any of the
Trustee's duties under the Pooling and Servicing Agreement other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties under the Pooling and Servicing
Agreement or by reason of reckless disregard of obligations and duties under the
Pooling and Servicing Agreement. Any payment hereunder made by the Servicer to
the Trustee shall be from the Servicer's own funds without any right to
reimbursement therefor. The obligations of the Servicer under this Section 8.05
shall survive the termination of the Trust and the resignation or removal of the
Trustee.
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee shall at all times be a corporation or national banking
association that is not an Affiliate of OMI or the Servicer, organized and doing
business under the laws of any state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 (or qualifying as a Qualified Bank) and
subject to supervision or examination by federal or state regulatory
authorities. If such corporation or association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07
hereof.
SECTION 8.07. RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
created pursuant to the Pooling and Servicing Agreement by giving written notice
of such resignation to OMI, the Servicer and to all related Certificateholders.
Upon receiving such notice of resignation, OMI shall promptly appoint a
successor Trustee by written instrument, in duplicate, which instrument shall be
delivered to the resigning Trustee and to the successor Trustee. A copy of such
instrument shall be delivered to the Certificateholders and to the Servicer by
OMI. If no successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the resigning Trustee's giving of such notice
of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 hereof and shall fail to resign after written
request therefor by OMI, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation thereof, then OMI may remove the
Trustee and appoint a successor Trustee by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor Trustee. A copy of such instrument shall be delivered to the
Certificateholders and to the Servicer by OMI.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may remove the Trustee at any time and appoint a successor Trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to OMI, one complete set to the Trustee so removed and one complete
set to the successor so appointed. A copy of such instrument shall be delivered
to the Certificateholders and to the Servicer by OMI. If the Holders remove the
Trustee otherwise than for reasonable cause based upon the Trustee's failure to
continue to meet the eligibility requirements set forth in Section 8.06 above or
the Trustee's failure to perform its duties as described herein, then the
Holders so removing the Trustee shall bear any and all costs and expenses
arising from such removal and substitution.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08 hereof.
SECTION 8.08. SUCCESSOR TRUSTEE.
Any successor Trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to OMI, the Servicer and to its predecessor
Trustee an instrument accepting such appointment under the Pooling and
Servicing Agreement and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as Trustee herein. The predecessor Trustee shall deliver
to the successor Trustee all related Asset Documents and related documents
and statements held by it under the Pooling and Servicing Agreement and OMI,
the Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as reasonably may be required for more
fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
under the provisions of Section 8.06 hereof.
Upon acceptance of appointment by a successor Trustee as provided in this
Section, OMI shall mail notice of the succession of such Trustee under the
Pooling and Servicing Agreement to all Holders of the Certificates at their
addresses as shown in the Certificate Register. If OMI 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 OMI.
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee, shall be the successor of the Trustee under the Pooling and
Servicing Agreement provided such corporation or association shall be eligible
under the provisions of Section 8.06 hereof, without the execution or filing of
any paper or any further act on
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the part of any of the parties hereto, anything herein to the contrary
notwithstanding. Prior to any such merger, conversion or consolidation, the
Trustee shall notify each applicable Rating Agency in writing of the pendency
of such merger, conversion or consolidation.
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
For the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Estate or property securing the same may be located
at any time, OMI, the Servicer and the Trustee, acting jointly, shall have the
power and shall execute and deliver all instruments necessary to appoint one or
more Persons approved by the Trustee to act as co-Trustee or co-Trustees,
jointly with the Trustee, or separate Trustee or Trustees, of all or any part of
the Trust Estate, and to vest in such Person or Persons, in such capacity, such
title to the Trust Estate or any part thereof, and, subject to the other
provisions of this Section 8.10, such powers, duties, obligations, rights and
trusts as OMI, the Servicer and the Trustee may consider necessary or desirable.
If OMI or the Servicer shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, the Trustee alone shall have the
power to make such appointment. No co-Trustee or separate Trustee(s) hereunder
shall be required to meet the terms of eligibility as a successor Trustee under
Section 8.06 hereof and no notice to Holders of Certificates of the appointment
of co-Trustee(s) or separate Trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-Trustee or separate Trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate Trustee or co-Trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee under the
Pooling and Servicing Agreement or as successor to the Servicer pursuant to
Section 7.02 hereof), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof in
any such jurisdiction) shall be exercised and performed by such separate Trustee
or co-Trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to the Pooling and Servicing
Agreement and the conditions of this Article VIII. Each separate Trustee and
co-Trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of the Pooling and Servicing Agreement, specifically
including every provision of the Pooling and Servicing Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Pooling and Servicing Agreement on its behalf and in its name. If any separate
Trustee or co-Trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
SECTION 8.11. APPOINTMENT OF CUSTODIANS. The Trustee may, with the consent
of the Servicer, appoint one or more Custodians to hold all or a portion of the
Trustee Mortgage Loan Files as agent for the Trustee, by entering into a
custodial agreement. The appointment of any Custodian may at any time be
terminated and a substitute Custodian appointed therefor by the Trustee. The
Trustee shall terminate the appointment of any Custodian and appoint a
substitute custodian upon the request of the Servicer to the Trustee. Subject to
this Article VIII, the Trustee agrees to comply with the terms of each custodial
agreement and to enforce the terms and provisions thereof against the Custodian
for the benefit of the Certificateholders. Each Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $10,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Trustee Mortgage Loan
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File. Any such Custodian may not be an affiliate of OMI or any Seller with
respect to the applicable Trust.
SECTION 8.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under the Pooling and Servicing
Agreement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto and any such proceeding instituted by the
Trustee shall be brought in its own name or in its capacity as Trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION UPON REPURCHASE OR LIQUIDATION OF ALL CONTRACTS.
(a) The respective obligations and responsibilities of OMI, the Servicer
and the Trustee under the Pooling and Servicing Agreement (other than the
obligations of the Trustee to make distributions to Certificateholders, to
reimburse the Servicer for outstanding Advances, to pay the Servicer accrued and
previously unpaid Servicing Fees or to provide tax information as provided in
Section 4.01(a) hereof and other than the obligations of the Servicer under
Article X hereof) shall terminate upon distribution to the Certificateholders of
all amounts held by or on behalf of the Trustee and required hereunder to be so
distributed on the Distribution Date coinciding with or following the earlier to
occur of (1) a Terminating Purchase for an amount equal to the Termination
Price and (2) the final payment or other liquidation (or any advance with
respect thereto) of the last Asset remaining in the Trust or the disposition of
the last Repo Property or REO Property remaining in the Trust; PROVIDED,
HOWEVER, that in no event shall the Trust created hereby continue beyond the
expiration of 21 years after the death of the last survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States to the Court of
St. James, living on the date hereof.
(b) Unless otherwise provided in the Pooling and Servicing Agreement, the
Servicer may, at its option, make, or cause a Person to make, a Terminating
Purchase on any Distribution Date on or after the earlier to occur of (1) the
Servicer's determination, based upon an Opinion of Counsel, that the REMIC
status of any REMIC related to the Trust has been lost or that a substantial
risk exists that such REMIC status will be lost for the then-current taxable
year, or (2) the Distribution Date on which, after taking into account
distributions of principal to be made on such Distribution Date, the sum of the
Certificate Principal Balances of the Certificates is less than 10% of the sum
of the original Certificate Principal Balances of the Certificates.
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(c) The Servicer shall notify the Trustee and the Certificate Registrar in
writing of its election to make or to cause a Terminating Purchase no later than
the Distribution Date preceding the Distribution Date on which the Certificates
will be retired as a result of such Terminating Purchase. The Servicer shall
advise the Trustee and the Certificate Registrar of the final payment or other
liquidation of the last Asset remaining in the Trust or the disposition of the
last Repo Property or REO Property remaining in the Trust at least two Business
Days prior to the Remittance Date in the month in which the Trust will terminate
as a result thereof.
Notice of any termination of the Trust shall be given promptly by the
Trustee by letter sent to the Certificateholders by certified mail (1) in the
event such notice is given in connection with a Terminating Purchase, not
earlier than the fifth day of the month preceding the month of such termination
and not later than the first day of the month of such termination or (2)
otherwise not later than the Remittance Date preceding the final Distribution
Date, in each case specifying (A) the Distribution Date upon which the Trust
will terminate and that final payment of the Certificates will be made on such
Distribution Date and (B) the amount of any such final distribution. The Trustee
shall give such notice to the Certificate Registrar at the time such notice is
given to Certificateholders. In the event such notice is given in connection
with a Terminating Purchase, the Terminator shall deliver to the Trustee for
deposit into the Distribution Account on the Business Day immediately preceding
the Distribution Date on which the Terminating Purchase is to take place an
amount in next day funds equal to the Termination Price. Notwithstanding the
foregoing, if the Terminator is the Servicer, the Terminator, upon notice to the
Trustee, shall be entitled to remit the Termination Price net of amounts owed to
the Terminator in respect of unreimbursed outstanding Advances made by such
Terminator or amounts required to be reimbursed or paid to such Terminator
hereunder.
(d) On the final Distribution Date, the Trustee shall distribute to the
Certificateholders as of the related Record Date the amount otherwise
distributable on the Certificates on such Distribution Date (if such final
Distribution Date is not the result of a Terminating Purchase).
Upon any termination of the Trust as the result of a Terminating Purchase,
the Trustee shall distribute the Termination Price as though it were the amount
on deposit in the Distribution Account in accordance with Section 4.03(a) hereof
and in accordance with the related Pooling and Servicing Agreement.
Following such final distribution, the Servicer and the Trustee shall
promptly release to the Terminator the related Asset Files or portions thereof
in their respective possessions for the remaining Assets, Repo Properties and
REO Properties, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate transfer of such Asset Files to such
Terminator, whereupon the Trust shall terminate.
(e) In the event that all of the Certificateholders shall not surrender
their Certificates within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates and receive
the final distribution with respect thereto, net of the cost of such second
notice. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the amounts otherwise payable on such
Certificates. Any funds payable to Certificateholders that are not distributed
on the final Distribution Date shall be deposited in a Termination Account, as
the case may be, each of which shall be an Eligible Account, to be held for the
benefit of Certificateholders not presenting and surrendering their Certificates
in the aforesaid manner, and shall be disposed of in accordance with this
Section.
SECTION 9.02. ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event of a Terminating Purchase as provided in Section 9.01
hereof, the Trust shall be terminated in accordance with the following
additional requirements, unless the Servicer, OMI, and the Trustee receive (1) a
Special Tax Opinion and (2) a Special Tax Consent from each of the Holders of
the Residual Certificates (unless the Special Tax Opinion specifically provides
that no REMIC-level tax will result from such Terminating Purchase).
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(1) Within 90 days prior to the time of the making of the final
payment on the Certificates, OMI on behalf of each related REMIC shall
adopt a plan of complete liquidation meeting the requirements set forth in
the REMIC Provisions for a qualified liquidation (which plan may be
adopted by the Trustee's attachment of a statement specifying the first
day of the 90-day liquidation period to the REMIC's final federal income
tax return) and the REMIC will sell all of its assets (other than cash).
(2) At the time of the making of the final payment on the Regular
Certificates or the deposit to the Termination Account, the Trustee shall
distribute or credit, or cause to be distributed or credited, PRO RATA, to
the Holders of the Residual Certificates, all remaining cash on hand
relating to the REMIC after such final payment (other than cash retained
to meet claims against the Trust) and the REMIC shall terminate at that
time.
(3) In no event may the final payment on the Regular Certificates or
the final distribution or credit to the Holders of the Residual
Certificates be made after the 90th day after the date on which the plan
of complete liquidation relating thereto is adopted. A payment into the
Termination Account with respect to any Certificate pursuant to Section
9.01 hereof shall be deemed a final payment on, or final distribution with
respect to, such Certificate for the purposes of this Section 9.02(a)(3).
(b) By their acceptance of Residual Certificates, the Holders thereof
agree (1) to authorize such action as may be necessary to adopt a plan of
complete liquidation of any related REMIC and (2) to take such action as may be
necessary to adopt a plan of complete liquidation of any related REMIC upon the
written request of the Servicer, which authorization shall be binding upon all
successor Holders of such Residual Certificates.
ARTICLE X
REMIC TAX PROVISIONS
SECTION 10.01. REMIC ADMINISTRATION.
Unless otherwise specified in the related Pooling and Servicing Agreement,
an election will be made to treat the Assets and the Distribution Account
underlying a Series as one or more REMICs under the Code. Each Holder of a
Residual Certificate in each REMIC shall, in its Residual Transferee Agreement,
designate the Servicer or an Affiliate of the Servicer, as its agent, to act as
the Tax Matters Person for such REMIC. The Servicer agrees that it or one of
its Affiliates will serve as such Tax Matters Person for each REMIC, and also
will perform various tax administration functions for each REMIC, as its agent,
as set forth in this Section 10.01.
(a) The Trustee shall elect (on behalf of each REMIC to be created) to
have the Trust (or designated assets thereof) treated as a REMIC on Form 1066 or
other appropriate federal tax or information return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued as
well as on any corresponding state tax or information return necessary to have
such assets treated as a REMIC under relevant state law.
(b) The Servicer shall pay any and all tax related expenses (not including
taxes) of the Trust and each related REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to each such REMIC that involve the Internal
Revenue Service or state tax authorities or related to the adoption of a plan of
complete liquidation.
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(c) The Servicer shall prepare any necessary forms for election as well as
all of the Trust's and each related REMIC's federal and state tax and
information returns. At the request of the Servicer, the Trustee shall sign and
file such returns on behalf of each such REMIC. The expenses of preparing and
filing such returns shall be borne by the Servicer.
(d) The Servicer shall perform all reporting and other tax compliance
duties that are the responsibility of the Trust and the REMIC under the REMIC
Provisions or state or local tax law. Among its other duties, if required by the
REMIC Provisions, the Servicer, acting as agent of the REMIC, shall provide (1)
to the Treasury or to other governmental authorities such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (2) to the Trustee such
information as is necessary for the Trustee to discharge its obligations under
the REMIC Provisions to report tax information to the Certificateholders.
(e) OMI, the Servicer, the Trustee (to the extent the Trustee has been
instructed by OMI or the Servicer), and the Holders of Residual Certificates
shall take any action or cause each related REMIC to take any action necessary
to create or maintain the status of each such REMIC as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain such
status.
(f) OMI, the Servicer, the Trustee (to the extent the Trustee has been
instructed by OMI or the Servicer), and the Holders of the Residual Certificates
shall not take any action or fail to take any action, or cause each related
REMIC to take any action or fail to take any action that, if taken or not taken,
could endanger the status of each such REMIC as a REMIC unless the Trustee and
the Servicer have received an Opinion of Counsel (at the expense of the party
seeking to take or to omit to take such action) to the effect that the
contemplated action or failure to act will not endanger such status.
(g) Any taxes that are imposed upon the Trust or any related REMIC by
federal or state (including local) governmental authorities (other than taxes
paid by a party pursuant to Section 10.02 hereof or as provided in the following
sentence) shall be allocated to the Certificates (including, for this purpose,
the regular interests in any Pooling REMIC) in the same manner as Writedown
Amounts are so allocated; PROVIDED, HOWEVER, that if the related Pooling and
Servicing Agreement does not provide for the allocation of Writedown Amounts,
such taxes shall be payable out of the Available Distribution Amount before any
distributions are made on the related Certificates on the related Distribution
Date. Any state or local taxes imposed upon the Trust, any related REMIC or any
related Certificateholder that would not have been imposed on the Trust, such
REMIC or such Certificateholder in the absence of any legal or business
connection between the Trustee and the state or locality imposing such taxes
(including any federal, state or local taxes imposed on such Trust, such REMIC
or such Certificateholder as a result of such Trust, such REMIC or such
Certificateholder being deemed to have received income as a result of the
Trustee's payment of state or local taxes) shall be paid by the Trustee, and,
notwithstanding anything to the contrary in these Standard Terms, such taxes
shall be deemed to be part of the Trustee's cost of doing business and shall not
be reimbursable to the Trustee.
(h) If the Servicer (or an Affiliate thereof) is unable for any reason to
fulfill its duties as Tax Matters Person, then the holder of the largest
Percentage Interest of the Residual Certificates, without compensation, shall
become the successor Tax Matters Person for each related REMIC; PROVIDED,
HOWEVER, that in no event shall the Trustee be required to act as Tax Matters
Person (regardless of whether the Trustee is acting as successor Servicer).
SECTION 10.02. PROHIBITED ACTIVITIES.
Except as otherwise provided elsewhere in the Pooling and Servicing
Agreement, neither OMI, the Servicer, the Holders of Residual Certificates, nor
the Trustee shall engage in, nor shall the Trustee permit, any of the following
transactions or activities unless it has received (1) a Special Tax Opinion and
(2) a Special Tax Consent from each of the Holders of the Residual Certificates
(unless the Special Tax Opinion specially provides that no REMIC-level tax will
result from the transaction or activity in question):
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<PAGE>
(a) the sale or other disposition of, or substitution for, any of
the underlying Assets except pursuant to (1) a foreclosure or default with
respect to such an Asset, (2) a purchase or repurchase pursuant to Section
2.06 hereof, (3) the bankruptcy or insolvency of any related REMIC, or (4)
the termination of any related REMIC pursuant to Article IX hereof;
(b) the acquisition of any Assets for the Trust after the related
Closing Date except (1) during the three-month period beginning on the
Closing Date pursuant to a fixed-price contract in effect on the Closing
Date that has been reviewed and approved by tax counsel acceptable to the
Servicer or (2) a substitution in accordance with Section 2.06 hereof;
(c) the sale or other disposition of any investment in the
Distribution Account at a gain;
(d) the acceptance of any contribution to the Trust except the
following cash contributions: (1) a cash contribution received during the
three-month period beginning on the Closing Date; (2) a cash contribution
to facilitate a Terminating Purchase that is made within the 90-day period
beginning on the date on which a plan of complete liquidation is adopted
pursuant to Section 9.02(a)(1) hereof; (3) a contribution to a Reserve
Fund owned by a related REMIC that is made PRO RATA by the Holders of the
Residual Certificates; or (4) any other contribution approved by the
Servicer after consultation with tax counsel;
(e) except in the case of an Asset that is in default, or as to
which, in the reasonable judgment of the Servicer, default is reasonably
foreseeable, neither the Trustee nor the Servicer shall permit any
modification of any material term of an Asset (including, but not limited
to, the interest rate, the principal balance, the amortization schedule
(except as provided in the Pooling and Servicing Agreement), the remaining
term to maturity, or any other term affecting the amount or timing of
payments on the Asset) unless the Trustee and Servicer have received an
Opinion of Counsel (at the expense of the party seeking to modify the
Asset) to the effect that such modification would not be treated as giving
rise to a new debt instrument for REMIC purposes;
(f) any other transaction or activity that is not contemplated by
the Pooling and Servicing Agreement;
(g) the sale or other disposition of any asset held in a Reserve
Fund for a period of less than three months (a "Short-Term Reserve Fund
Investment") if such sale or disposition would cause 30% or more of a
related REMIC's income from all of its Reserve Funds for the taxable year
to consist of gain from the sale or disposition of Short-Term Reserve Fund
Investments; or
(h) the withdrawal of any amounts from any Reserve Fund except (A)
for the distribution pro rata to the Holders of the Residual Certificates
or (B) to provide for the payment of Trust expenses or amounts payable on
the Certificates in the event of defaults or late payments on the related
Assets or lower than expected returns on funds held in the Distribution
Account, as provided under section 860G(a)(7) of the Code.
Any party causing the Trust to engage in any of the activities prohibited in
this Section shall be liable for the payment of any tax imposed on the Trust
pursuant to Code section 860F(a)(1) or 860G(d) as a result of the Trust engaging
in such activities.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. AMENDMENTS.
The Pooling and Servicing Agreement may be amended or supplemented from
time to time by OMI, the Servicer and the Trustee without the consent of any of
the Certificateholders (a) to cure any ambiguity herein, (b) to correct or
supplement any provisions herein that may be inconsistent with any other
provisions herein, (c) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of any related REMIC as a REMIC under the Code at all times that any
Certificates are outstanding or (d) to make any other provisions with respect to
matters or questions arising under the Pooling and Servicing Agreement or
matters arising with respect to the Trust that are not covered by the Pooling
and Servicing Agreement; PROVIDED, that such action shall not affect adversely
the interests of any Certificateholder, as evidenced by an opinion of counsel
independent from OMI, the Servicer and the Trustee or a letter from each Rating
Agency from whom OMI requested a rating of any of the related Certificates
stating that such action will not result in a downgrading of the rating of any
of the related Certificates rated by such Rating Agency at the request of OMI.
Promptly after the execution of any such amendment, the Trustee shall furnish a
copy of such amendment to each Holder of Certificates.
The Pooling and Servicing Agreement also may be amended from time to time
by OMI, the Servicer and the Trustee with the consent of the Holders entitled to
at least a majority of the Voting Rights of each Class of Certificates that
would be affected by such amendment for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Pooling
and Servicing Agreement or of modifying in any manner the rights of the Holders
of the Certificates; PROVIDED, HOWEVER, that no such amendment shall (a) reduce
in any manner the amount of, or delay the timing of, payments received on
Contracts or Mortgage Loans that are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (b) affect
adversely in any material respect the interests of the Holders of any Class of
Certificates in a manner other than described in clause (a) of this paragraph,
without the consent of the Holders of Certificates of such Class evidencing at
least 662/3% of the Voting Rights with respect to such Class, or (c) reduce the
aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of such Holders of all
Certificates then outstanding.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
SECTION 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, the Pooling and Servicing
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Real Property or Mortgaged Properties included in the Trust
Estate and subject to the related Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer and at its expense, but only upon direction of the
Trustee accompanied by an Opinion of Counsel to the effect that such recordation
is necessary to protect the interests of the Certificateholders. The Trustee
shall not be responsible for determining whether the Pooling and Servicing
Agreement should be recorded in any such office.
For the purpose of facilitating the recordation of the Pooling and
Servicing Agreement as herein provided and for other purposes, the Pooling and
Servicing Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
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<PAGE>
SECTION 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate to
terminate the Pooling and Servicing Agreement or the Trust, nor will such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor shall it otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to the Pooling and Servicing Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
the Pooling and Servicing Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to the Pooling and Servicing
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates entitled to at least 25%
of the Voting Rights allocated to the Certificates shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee under the Pooling and Servicing Agreement and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
15 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding. It
is understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue of any
provision of the Pooling and Servicing Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under the Pooling and Servicing Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Certificates. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
SECTION 11.04. NOTICES.
All demands and notices under the Pooling and Servicing Agreement shall be
in writing and shall be deemed to have been duly given if personally delivered
at or mailed by first class mail, postage prepaid, or by express delivery
service, to (a) in the case of OMI, 7800 McCloud Road, Greensboro, NC
27425-7081, Attention: Treasurer, telecopy number (336) 664-3224, or such other
address or telecopy number as may hereafter be furnished to each party to the
Pooling and Servicing Agreement in writing by OMI, (b) in the case of OAC or the
Servicer, 7800 McCloud Road, Greensboro, NC 27425-7081, Attention: Treasurer,
telecopy number (336) 664-3224, or such other address or telecopy number as may
subsequently be furnished to each party to the Pooling and Servicing Agreement
in writing by the Servicer and (c) in the case of the Trustee, at its address
set forth in the Pooling and Servicing Agreement or such other address or
telecopy number as may subsequently be furnished to each party to the Pooling
and Servicing Agreement in writing by the Trustee. Any notice required or
permitted to be mailed to a Certificateholder shall be given by registered mail,
postage prepaid, or by express delivery service, at the address of such Holder
as shown in the Certificate Register. Any notice so mailed within the time
prescribed in the Pooling and Servicing Agreement shall be conclusively presumed
to have been duly given, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above. A copy of any
notice given hereunder to any other party shall be delivered to the Trustee.
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<PAGE>
SECTION 11.05. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
the Pooling and Servicing Agreement shall be held invalid for any reason
whatsoever, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of the
Pooling and Servicing Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Pooling and Servicing Agreement or
of the Certificates or the rights of the Holders thereof.
SECTION 11.06. SALE OF CONTRACTS.
It is the express intent of OMI and the Trustee that the conveyance of the
Assets underlying a Series by OMI to the Trustee pursuant to the related Pooling
and Servicing Agreement be construed as a sale of such Assets by OMI to the
Trustee. It is, further, not the intention of OMI or the Trustee that such
conveyance be deemed a pledge of such Assets by OMI to the Trustee to secure a
debt or other obligation of OMI. However, in the event that, notwithstanding the
intent of the parties, such Assets are held to continue to be property of OMI,
then (a) the Pooling and Servicing Agreement also shall be deemed to be a
security agreement within the meaning of Article 9 of the applicable UCC; (b)
the conveyance by OMI provided for in the Pooling and Servicing Agreement shall
be deemed to be a grant by OMI to the Trustee of a security interest in all of
OMI's right, title and interest in and to the Assets and all amounts payable to
the holders of the Assets in accordance with the terms thereof and all proceeds
of the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without limitation all
amounts, other than investment earnings, from time to time held or invested in
the related Certificate Account or Distribution Account, whether in the form of
cash, instruments, securities or other property, and including without
limitation all amounts from time to time held or invested in any related Reserve
Fund; (c) the possession by the Trustee or its agent (including the Servicer
pursuant to Section 2.02(a) hereof) of items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the applicable UCC; and (d) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. OMI and the Trustee (to the extent
the Trustee has been instructed by OMI or the Servicer) shall take, to the
extent consistent with the Pooling and Servicing Agreement, such actions as may
be necessary to ensure that, if the Pooling and Servicing Agreement were deemed
to create a security interest in the related Assets, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the Pooling
and Servicing Agreement.
SECTION 11.07. NOTICE TO RATING AGENCY.
(a) The Trustee shall use its best efforts promptly to provide notice to
each applicable Rating Agency and each Certificateholder with respect to each of
the following of which it has actual knowledge, except that no notice specified
below need be sent to any such Certificateholder or each applicable Rating
Agency if already sent pursuant to other provisions of the Pooling and Servicing
Agreement:
(1) any amendment to the Pooling and Servicing Agreement or any
agreement assigned to the Trust;
(2) the occurrence of any Event of Default involving the Servicer
that has not been cured or waived;
(3) the resignation, termination or merger of OMI, the Servicer or
the Trustee;
(4) the purchase or repurchase or substitution of Contracts pursuant
to Section 2.06 hereof;
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<PAGE>
(5) the final payment to the Certificateholders;
(6) any change in the location of the related Certificate Account or
the Distribution Account;
(7) any event that would result in the inability of the Servicer to
make Advances regarding the related Assets;
(8) any change in applicable law that would require an assignment of
a Mortgage, not previously recorded, to be recorded in order to protect
the right, title and interest of the Trustee in and to the related Real
Property or Mortgaged Property or, in case a court should recharacterize
the sale of the related Asset as a financing, to perfect a first priority
security interest in favor of the Trustee in the related Asset or the
occurrence of either of the circumstances described in clause (1) or (2)
of Section 2.06(b) hereof relating to the retitling of Manufactured Homes;
or
(9) any change in OMI's or the Servicer's name or place of business
or the relocation of the Contract Files or Servicer Contract Files or the
Servicer Mortgage Loan Files to a location outside the State of North
Carolina or the relocation of the Trustee Mortgage Loan Files to a
location outside of the state where they are originally held by the
Trustee or its Custodian.
(b) The Servicer shall promptly notify the Trustee of any of the events
listed in Section 11.07(a) hereof of which it has actual knowledge. In addition,
the Trustee shall furnish promptly to each Rating Agency, at its address set
forth in the Pooling and Servicing Agreement, copies of the following:
(i) Each Remittance Report; and
(ii) Each Officer's Certificate supplied by the Servicer to the
Trustee and the Certificateholders pursuant to Section 3.13 hereof.
(c) Any notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid or by express delivery service to each Rating
Agency at its address specified in the Pooling and Servicing Agreement.
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<PAGE>
EXHIBIT 1
---------
FORM OF SERVICER'S CUSTODIAL CERTIFICATION
[DATE]
[NAME AND ADDRESS
OF TRUSTEE]
Pooling and Servicing Agreement, dated
as of ____________, among
Oakwood Mortgage Investors, Inc. ("OMI"),
Oakwood Acceptance Corporation and
____________________ , as Trustee
Ladies and Gentlemen:
In accordance with Section 2.02(b) of OMI's Standard Terms to Pooling and
Servicing Agreement (July 1998 Edition), which are incorporated by reference
into the above-referenced Pooling and Servicing Agreement (the "Agreement"),
Oakwood Acceptance Corporation, as Servicer under the Agreement, hereby confirms
that it is in possession of a complete Contract File for each of the Contracts
identified on Schedule I to the Agreement, subject to those exceptions
identified on the schedule attached hereto. Capitalized terms used and not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Agreement.
OAKWOOD ACCEPTANCE CORPORATION
By:____________________________
Name:_________________________
Title:__________________________
Exhibit 1 - Page 1
<PAGE>
EXHIBIT 2-A
-----------
FORM OF INITIAL CERTIFICATION
[Date]
Oakwood Mortgage Investors, Inc.
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [_______________]
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of ___ 1, ___,
among Oakwood Mortgage Investors, Inc.,
Oakwood Acceptance Corporation, as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
OMI Trust _______-_____.
Gentlemen:
In accordance with Section 2.03 of OMI's Standard Terms to Pooling and
Servicing Agreement (July 1998 Edition) (the "Standard Terms"), which are
incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule to the Pooling and Servicing
Agreement (other than any Mortgage Loan paid in full or listed on the attachment
hereto) it, or a Custodian on its behalf, has reviewed the Trustee Mortgage Loan
File and has determined that, except as noted on the Schedule of Exceptions
attached hereto: (i) all documents required to be included in the Trustee
Mortgage Loan File (as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms) are in its possession or in the possession of a
Custodian on its behalf; (ii) such documents have been reviewed by it, or a
Custodian on its behalf, and appear regular on their face and relate to such
Mortgage Loan; and (iii) based on examination by it, or by a Custodian on its
behalf, and only as to such documents, the information set forth on the Mortgage
Loan Schedule to the Pooling and Servicing Agreement accurately reflects the
information set forth in the Trustee Mortgage Loan File. The undersigned further
certifies that the Trustee's review, or the review of its Custodian, of each
Trustee Mortgage Loan File included each of the procedures listed in Section
2.03(c)(2) of the Standard Terms.
Except as described herein, neither the Trustee, nor any Custodian on its
behalf, has made an independent examination of any documents contained in any
Trustee Mortgage Loan File. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any documents
contained in any Trustee Mortgage Loan File for any of the Mortgage Loans listed
on the Mortgage Loan Schedule to the Pooling and Servicing Agreement, (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Trustee Mortgage Loan File should include any
assumption agreement, modification agreement, written assurance or substitution
agreement.
Exhibit 2-A - Page 1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement").
[TRUSTEE]
By:___________________________
Its:__________________________
Exhibit 2-A - Page 2
<PAGE>
EXHIBIT 2-B
-----------
FORM OF FINAL CERTIFICATION
[Date]
Oakwood Mortgage Investors, Inc.
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [_______________]
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of ___ 1, ____,
among Oakwood Mortgage Investors, Inc.,
Oakwood Acceptance Corporation, as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
OMI Trust _______-_____.
Gentlemen:
In accordance with Section 2.03 of OMI's Standard Terms to Pooling and
Servicing Agreement (July 1998 Edition) (the "Standard Terms"), which are
incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that, except as noted
on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed in
the Mortgage Loan Schedule to the Pooling and Servicing Agreement (other than
any Mortgage Loan paid in full or listed on the attachment hereto) it, or a
Custodian on its behalf, has received a complete Trustee Mortgage Loan File
which includes each of the documents required to be included in the Trustee
Mortgage Loan File as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms.
Neither the Trustee nor any Custodian on its behalf has made an
independent examination of any documents contained in any Trustee Mortgage Loan
File beyond the review specifically required in the above captioned Pooling and
Servicing Agreement. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in any Trustee Mortgage Loan File or any of the Mortgage
Loans listed on the Mortgage Loan Schedule, (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
whether any Trustee Mortgage Loan File should include any assumption agreement,
modification agreement, written assurance or substitution agreement.
Exhibit 2-B - Page 1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement").
[TRUSTEE]
By:___________________________
Its:__________________________
Exhibit 2-B - Page 2
<PAGE>
EXHIBIT 3
---------
FORM OF RECORDATION REPORT
[Date]
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of _____ 1, ___,
among Oakwood Mortgage Investors, Inc.,
Oakwood Acceptance Corporation, as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
OMI Trust _______-_____.
Gentlemen:
In accordance with Section 2.03 of OMI's Standard Terms to Pooling and
Servicing Agreement (July 1998 Edition) (the "Standard Terms"), which are
incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee hereby notifies you, that as of the date
hereof with respect to the following Mortgage Loans it has not received the
indicated documents:
MORTGAGE LOANS DOCUMENTS NOT RECEIVED
- -------------- ----------------------
ORIGINAL RECORDED
ORIGINAL RECORDED ASSIGNMENT OF
MORTGAGE MORTGAGE
OR CERTIFIED COPY OR CERTIFIED COPY
OAC LOAN NUMBER THEREOF THEREOF(1)
- --------------- ------- ----------
[TRUSTEE]
as Trustee
By:___________________________
Its:__________________________
- -----------------------
(1) Not required for Mortgage Loans for which OMI has waived recordation of
Assignments.
Exhibit 3 - Page 1
<PAGE>
EXHIBIT 4
---------
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
--------------------------------------------
TO: [Name and Address of Trustee or Custodian]
RE: Pooling and Servicing Agreement, dated as of __________ 1, --__,
among Oakwood Mortgage Investors, Inc. ("OMI"), Oakwood Acceptance
Corporation, as Servicer, and ____________________, as Trustee,
which incorporates by reference OMI's Standard Terms to Pooling and
Servicing Agreement (July 1998 Edition) (collectively, the "Pooling
and Servicing Agreement")
In connection with the administration of the Mortgage Loans held by you as
the Trustee or Custodian, we request the release and acknowledge receipt, of the
Trustee Mortgage Loan File [specify documents if only a partial Trustee Mortgage
Loan File is being released] for the Mortgage Loan described below, for the
reason indicated.
Mortgagor's Name and Address & Zip Code:
- ----------------------------------------
Mortgage Loan Number:
- ---------------------
Reason for Requesting Documents (check one)
- -------------------------------
___ 1. Mortgage Loan Paid in Full. (The Servicer hereby certifies that
all amounts received in connection therewith have been deposited
into the applicable Certificate Account as provided in the Pooling
and Servicing Agreement.)
___ 2. Mortgage Loan Liquidated by _________________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received.)
___ 3. Mortgage Loan in Foreclosure.
___ 4. Other (explain). _______________________________
If item 1 or 2 above is checked, and if all or part of the Trustee
Mortgage Loan File was previously released to us, please release to us our
previous request and receipt on file with you, as well as any additional
documents in your possession relating to the specified Mortgage Loan.
If item 3 or 4 above is checked, upon our return of all of the above
documents to you as the Trustee or Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
Exhibit 4 - Page 1
<PAGE>
Capitalized terms used herein but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement.
OAKWOOD ACCEPTANCE CORPORATION,
as Servicer
By:______________________________
Name:____________________________
Title:___________________________
Acknowledgment of Documents returned to the Trustee or Custodian:
[NAME OF TRUSTEE OR CUSTODIAN]
By:______________________________
Name:____________________________
Title:___________________________
Exhibit 4 - Page 2
<PAGE>
EXHIBIT 5
---------
RULE 144A AGREEMENT--QIB CERTIFICATION
OAKWOOD MORTGAGE INVESTORS, INC., SERIES ____-_
PASS-THROUGH CERTIFICATES, CLASS ___
----------------
(DATE)
[Name and Address of
the Trustee]
Oakwood Mortgage Investors, Inc.
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, NC 27409
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
securities (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Oakwood Mortgage Investors,
Inc. ("OMI"), the Servicer, the Trustee and the Trust as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act") and has completed the form of certification to that
effect attached hereto as Annex A1 (if the Transferee is not a registered
investment company) or Annex A2 (if the Transferee is a registered investment
company). The Transferee is aware that the sale to it is being made in reliance
on Rule 144A.
2. The Transferee understands that the Purchased Certificates have not
been registered under the 1933 Act or registered or qualified under any state
securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the 1933 Act and under applicable state law or
unless an exemption from such registration is available. The Transferee further
understands that neither OMI, the Servicer, the Trustee nor the Trust is under
any obligation to register the Purchased Certificates or make an exemption from
such registration available.
3. The Transferee is acquiring the Purchased Certificates for its own
account or for the account of a "qualified institutional buyer" (as defined in
Rule 144A, a "QIB"), and understands that such Purchased Certificates may be
resold, pledged or transferred only (a) to a person reasonably believed to be
such a QIB that purchases for its own account or for the account of a QIB to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (b) pursuant to another exemption from registration
under the 1933 Act and under applicable state securities laws. IN ADDITION, SUCH
TRANSFER MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS, AS SET FORTH IN SECTION 5.05
OF THE STANDARD TERMS TO THE POOLING AND SERVICING AGREEMENT (THE "STANDARD
TERMS") REFERRED TO BELOW. By its execution of this agreement, the Transferee
agrees that it will not resell, pledge or transfer any of the Purchased
Certificates to anyone otherwise than in strict compliance with Rule 144A, or
pursuant to another exemption from registration under the 1933 Act and all
applicable state securities laws, and in strict compliance with the transfer
restrictions set forth in Section 5.05 of the Standard Terms. The Transferee
will not attempt to transfer any or all of the Purchased Certificates pursuant
to Rule 144A unless the Transferee offers and
Exhibit 4 - Page 3
<PAGE>
sells such Certificates only to QIBs or to offerees or purchasers that the
Transferee and any person acting on behalf of the Transferee reasonably believe
(as described in paragraph (d)(l) of Rule 144A) is a QIB.
4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon and
(b) the Pooling and Servicing Agreement referred to below.
5. If applicable, the Transferee has complied, will comply in all material
respects with applicable regulatory guidelines relating to the ownership of
mortgage derivative products.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of _____________ 1, ____, which incorporates by reference the Standard
Terms thereto (July 1998 Edition), among Oakwood Mortgage Investors, Inc.,
Oakwood Acceptance Corporation and ____________________, as Trustee, pursuant to
which the Purchased Certificates were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule 144A Agreement to
be executed by its duly authorized representative as of the day and year first
above written.
[TRANSFEREE]
By:_____________________________
Name:___________________________
Title:___________________________
Exhibit 4 - Page 4
<PAGE>
ANNEX A1 TO EXHIBIT 5
---------------------
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
------------------------------------------------------
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Transferee.
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"), because (a) the Transferee owned and/or invested on
a discretionary basis at least $____________ in securities [Note to reviewer -
the amount in the previous blank must be at least $100,000,000 unless the
Transferee is a dealer, in which case the amount filled in the previous blank
must be at least $10,000,000.] (except for the excluded securities referred to
in paragraph 3 below) as of _______________ [specify a date on or since the end
of the Transferee's most recently ended fiscal year] (such amount being
calculated in accordance with Rule 144A) and (b) the Transferee meets the
criteria listed in the category marked below.
_____ Corporation, etc. The Transferee is an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
a corporation (other than a bank as defined in Section 3(a)(2) of
the 1933 Act or a savings and loan association or other similar
institution referenced in Section 3(a)(5)(A) of the Act), a
partnership, or a Massachusetts or similar business trust.
_____ Bank. The Transferee (a) is a national bank or banking institution
as defined in Section 3(a)(2) of the 1933 Act and is organized under
the laws of a state, territory or the District of Columbia. The
business of the Transferee is substantially confined to banking and
is supervised by the appropriate state or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements as of a date not more than 16 months preceding the date
of this certification in the case of a U.S. bank, and not more than
18 months preceding the date of this certification in the case of a
foreign bank or equivalent institution, a copy of which financial
statements is attached hereto.
_____ Savings and Loan. The Transferee is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution referenced in Section 3(a)(5)(A)
of the 1933 Act. The Transferee is supervised and examined by a
state or federal authority having supervisory authority over any
such institutions or is a foreign savings and loan association or
equivalent institution and has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements as of a date not more than 16 months preceding the date
of this certification in the case of a U.S. savings and loan
association or similar institution, and not more than 18 months
preceding the date of this certification in the case of a foreign
savings and loan association or equivalent institution, a copy of
which financial statements is attached hereto.
_____ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Certificates Exchange Act of 1934, as amended (the
"1934 Act").
_____ Insurance Company. The Transferee is an insurance company as defined
in Section 2(13) of the
Exhibit 4 - Page 5
<PAGE>
1933 Act, whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a state,
territory or the District of Columbia.
_____ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions,
for the benefit of its employees.
_____ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Certificate Act
of 1974, as amended.
_____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.
_____ Other. The Transferee qualifies as a "qualified institutional buyer"
as defined in Rule 144A on the basis of facts other than those
listed in any of the entries above. If this response is marked, the
Transferee must certify on additional pages, to be attached to this
certification, to facts that satisfy the Servicer that the
Transferee is a "qualified institutional buyer" as defined in Rule
144A.
3. The term "securities" as used herein does not include (a) securities of
issuers that are affiliated with the Transferee, (b) securities constituting the
whole or part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (c) bank deposit notes and certificates of deposit,
(d) loan participations, (e) repurchase agreements, (f) securities owned but
subject to a repurchase agreement and (g) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Transferee, the Transferee used
the cost of such securities to the Transferee and did not include any of the
securities referred to in the preceding paragraph. Further, in determining such
aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing ______ _____
the Purchased Certificates only YES NO
for the Transferee's own account?
If the answer to the foregoing question is "NO", the Transferee agrees
that, in connection with any purchase of securities sold to the Transferee for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Transferee will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of Rule
144A. In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
Exhibit 4 - Page 6
<PAGE>
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ____ day of ___________,
______.
-----------------------------
Print Name of Transferee
By:__________________________________
Name:________________________________
Title:________________________________
Exhibit 4 - Page 7
<PAGE>
ANNEX A2 TO EXHIBIT 5
REGISTERED INVESTMENT COMPANIES
-------------------------------
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the entity purchasing the Purchased
Certificates (the "Transferee") or, if the Transferee is part of a Family of
Investment Companies (as defined in paragraph 3 below), is an officer of the
related investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"), because (a) the Transferee is an investment company
(a "Registered Investment Company") registered under the Investment Company Act
of 1940, as amended (the "1940 Act") and (b) as marked below, the Transferee
alone, or the Transferee's Family of Investment Companies, owned at least
$___________ [Note to reviewer - the amount in the previous blank must be at
least $100,000,000] in securities (other than the excluded securities referred
to in paragraph 4 below) as of ________________ [specify a date on or since the
end of the Transferee's most recently ended fiscal year]. For purposes of
determining the amount of securities owned by the Transferee or the Transferee's
Family of Investment Companies, the cost of such securities to the Transferee or
the Transferee's Family of Investment Companies was used.
_____ The Transferee owned $____________ in securities (other than the excluded
securities referred to in paragraph 4 below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
_____ The Transferee is part of a Family of Investment Companies which owned in
the aggregate $____________ in securities (other than the excluded
securities referred to in paragraph 4 below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more Registered Investment Companies except for a unit investment trust whose
assets consist solely of shares of one or more Registered Investment Companies
(provided that each series of a "series company," as defined in Rule 18f-2 under
the 1940 Act, shall be deemed to be a separate investment company) that have the
same investment adviser (or, in the case of a unit investment trust, the same
depositor) or investment advisers (or depositors) that are affiliated (by virtue
of being majority-owned subsidiaries of the same parent or because one
investment adviser is a majority-owned subsidiary of the other).
4. The term "securities" as used herein does not include (a) securities of
issuers that are affiliated with the Transferee or are part of the Transferee's
Family of Investment Companies, (b) bank deposit notes and certificates of
deposit, (c) loan participations, (d) repurchase agreements, (e) securities
owned but subject to a repurchase agreement and (f) currency, interest rate and
commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification is
made of any changes in the
Exhibit 4 - Page 8
<PAGE>
information and conclusions herein. Until such notice, the Transferee's purchase
of the Purchased Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ____ of ____________,
______.
[Print Name of Transferee or
Adviser]
By:_________________________________________
Name:______________________________________
Title:_______________________________________
IF AN ADVISER:
[Print Name of Transferee]
Date:_______________________________________
Exhibit 4 - Page 9
<PAGE>
EXHIBIT 6
---------
FORM OF TRANSFEREE AGREEMENT
OAKWOOD MORTGAGE INVESTORS, INC., SERIES _____-___
PASS-THROUGH CERTIFICATES
CLASS __
---------------
[Name of Transferee]
----------------
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
Oakwood Mortgage Investors, Inc.
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Re: Oakwood Mortgage Investors, Inc., Series _____-____
Pass-Through Certificates, Class __, representing a
[___% Percentage Interest][$ denomination]
---------------------------------------------------
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of the
Class __, Class __, Class __ and Class __ Certificates (the "Purchased
Certificates"), issued by the Trust established pursuant to a pooling and
servicing agreement, dated as of ____________ (the "Series Agreement"), among
Oakwood Mortgage Investors, Inc. ("OMI"), Oakwood Acceptance Corporation ("OAC")
and _____________________________, as Trustee, which incorporates by reference
OMI's Standard Terms to Pooling and Servicing Agreement (July 1998 Edition) (the
"Standard Terms," and, collectively with the Series Agreement, the "Agreement").
In doing so the Transferee hereby acknowledges and agrees as follows:
SECTION 1. DEFINITIONS. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE. In connection
with the proposed transfer of the Purchased Certificates, the Transferee
represents and warrants to OMI, OAC, the Servicer, the Trustee and the Trust as
follows:
(a) The Transferee is purchasing the Purchased Certificates for its
own account as principal
Exhibit 6 - Page 1
<PAGE>
for investment purposes and not with a view to the distribution of the
Purchased Certificates, in whole or in part, in violation of Section 5 of
the Securities Act of 1933, as amended (the "Act").
(b) The Transferee has knowledge in financial and business matters
and is capable of evaluating the merits and risks of an investment in the
Purchased Certificates; the Transferee has sought such accounting, legal
and tax advice as it has considered necessary to make an informed
investment decision; and the Transferee is able to bear the economic risk
of an investment in the Purchased Certificates and can afford a complete
loss of such investment.
(c) The Transferee confirms that OMI and the Servicer have made
available to the Transferee the opportunity to ask questions of, and
receive answers from, OMI and the Servicer concerning OMI, the Servicer,
the Trust, the purchase by the Transferee of the Purchased Certificates
and all matters relating thereto, and to obtain additional information
relating thereto that OMI or the Servicer possesses or can acquire without
unreasonable effort or expense.
(d) The Transferee is an "accredited investor" as defined in
paragraph (1), (2), (3) or (7) of Rule 501(a) under the Act.
SECTION 3. COVENANTS OF THE TRANSFEREE. In consideration of the proposed
transfer, the Transferee covenants with each of OMI, OAC, the Servicer, the
Trustee and the Trust as follows:
(a) The Transferee will not make a public offering of the Purchased
Certificates, and will not reoffer or resell the Purchased Certificates in
a manner that would render the issuance and sale of the Purchased
Certificates, whether considered together with the resale or otherwise, a
violation of the Act or any state securities or "Blue Sky" laws or require
registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a holder of the
Purchased Certificates, it will assert no claim or interest in the
Contracts by reason of owning the Purchased Certificates other than with
respect to amounts that may be properly and actually payable to the
Transferee pursuant to the terms of the Pooling and Servicing Agreement
and the Purchased Certificates.
(c) The Transferee hereby agrees to abide by the terms of the
Agreement that will be applicable to it as a Certificateholder, including,
without limitation, the indemnification provisions contained in the second
sentence of Section 5.05(a) of the Agreement.
(d) If applicable, the Transferee will comply in all material
respects with applicable regulatory guidelines relating to the ownership
of mortgage derivative products.
SECTION 4. TRANSFER OF PURCHASED CERTIFICATES.
(a) The Transferee understands that the Purchased Certificates have not
been registered under the Act or any state securities laws and that no transfer
may be made unless the Purchased Certificates are registered under the Act and
under applicable state law or unless an exemption from such registration is
available. If requested by the Servicer or the Trustee, the Transferee and the
Holder of Purchased Certificates who desires to effect this transfer have
certified to the Trustee, OMI and the Servicer as to the factual basis for the
registration or qualification exemption relied upon. The Transferee further
understands that neither OMI, OAC, the Servicer, the Trustee nor the Trust is
under any obligation to register the Purchased Certificates or make an exemption
from such registration available.
(b) In the event that the transfer is to be made within three years of the
date the Purchased Certificates were acquired by a non-Affiliate of OMI from OMI
or an Affiliate of OMI, the Servicer or the Trustee may require
Exhibit 6 - Page 2
<PAGE>
an Opinion of Counsel (which shall not be an expense of OMI, OAC, the Servicer
or the Trustee) that such transfer is not required to be registered under the
Act or state securities laws.
(c) Any Certificateholder desiring to effect a transfer shall, and does
hereby agree to, indemnify OMI, the Servicer and the Trustee against any
liability that may result if the transfer is not exempt under federal or
applicable state securities laws.
(d) The transfer of the Purchased Certificates may be subject to
additional restrictions, as set forth in Section 5.05 of the Standard Terms of
the Pooling and Servicing Agreement, a copy of which is attached hereto as Annex
A.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Certification and Agreement to be validly executed by its duly authorized
representative this ____ day of ___________, ____.
-------------------,
By:________________________________
Name:______________________________
Its:________________________________
Exhibit 6 - Page 3
<PAGE>
ANNEX A TO EXHIBIT 6
ATTACH COPY OF SECTION 5.05 OF THE
STANDARD TERMS TO POOLING AND SERVICING AGREEMENT
Exhibit 6 - Page 4
<PAGE>
EXHIBIT 7
---------
BENEFIT PLAN AFFIDAVIT
Re: Oakwood Mortgage Investors, Inc., OMI
Trust ______ (the "Trust") Pass-
Through Certificates, Class ___,
Class __ and Class __
)
) ss:
)
Under penalties of perjury, I, the undersigned, declare that, to the best
of my knowledge and belief, the following representations are true, correct, and
complete.
1. That I am a duly authorized officer of __________________________, a
_________ corporation (the "Purchaser"), whose taxpayer identification number is
__________, and on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring the Class ______ Certificates ("the
Purchased Certificates"), each representing an interest in the Trust, for
certain assets of which one or more real estate mortgage investment conduit
("REMIC") elections are to be made under Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a plan ("Plan") described in or subject to the
Department of Labor regulations set forth in 29 C.F.R. ss. 2510.3-101 (the
"Plan Asset Regulations"), a person acting on behalf of a Plan, or a
person using the assets of a Plan and (B) either (I) is not an insurance
company or (II) is an insurance company, in which case none of the funds
used by the Purchaser in connection with its purchase of the Purchased
Certificates constitute plan assets as defined in the Plan Asset
Regulations ("Plan Assets") and its purchase of the Purchased Certificates
shall not result in the certificates issued by or the assets of the Trust
being deemed to be Plan Assets;
(ii) is an insurance company and (A) the Purchaser is acquiring the
Purchased Certificates with funds held in an "insurance company general
account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60"), as published in 60 Fed. Reg. 35925 (July
12, 1995)), (B) there is no Plan with respect to which the amount of such
general account's reserves and liabilities for all contracts held by or on
behalf of such Plan and all other Plans maintained by the same employer,
or its affiliates (as defined in Section V(a)(1) of PTCE 95-60), or by the
same employee organization exceeds or will exceed 10% of the total of all
reserves and liabilities of such general account (as such amounts are
determined under Section I(a) of PTCE 95-60) at the date of acquisition,
(C) the purchase of the Purchased Certificates is not part of an
agreement, arrangement, or understanding designed to benefit a party in
interest, and (D) the conditions of Prohibited Transaction Exemption
__________ [INSERT SPECIFIC UNDERWRITER'S EXEMPTION OR PTE 83-1] (except
for the conditions stated in section II(A)(2) and (3) thereof) are met; or
Exhibit 7 - Page 1
<PAGE>
(iii) has provided a "Benefit Plan Opinion," obtained at the
Purchaser's expense, satisfactory to OMI, the Servicer, and the Trustee. A
Benefit Plan Opinion is an opinion of counsel to the effect that the
proposed transfer will not (a) cause the assets of the Trust to be
regarded as Plan Assets, (b) give rise to a fiduciary duty under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), on
the part of OMI, the Servicer, or the Trustee, or (c) be treated as, or
result in, a prohibited transaction under Section 406 or 407 of ERISA or
Section 4975 of the Code.
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of ____________ __, _______, which incorporates by reference the Standard Terms
thereto (July 1998 Edition), among OMI, Oakwood Acceptance Corporation, and
_________________________, as Trustee.
Exhibit 7 - Page 2
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this ____ day of
___________, ____.
-----------------------------
[Name of Purchaser]
By:________________________________
Name:______________________________
Its:________________________________
Personally appeared before me ________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
_________________________ of the Purchaser, and acknowledged to me that he
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.
Subscribed and sworn before me this ______ day of ___________, ____.
- -----------------------------------
Notary Public
My commission expires:______________________________.
Exhibit 7 - Page 3
<PAGE>
EXHIBIT 8
---------
FORM OF RESIDUAL TRANSFEREE AGREEMENT
OAKWOOD MORTGAGE INVESTORS INC., SERIES ____-_______
PASS-THROUGH CERTIFICATES,
CLASS __
RESIDUAL TRANSFEREE
-----------------
[Name of Transferee]
----------------
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
Oakwood Mortgage Investors, Inc.
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Re: Oakwood Mortgage Investors, Inc., Series ____-____,
Pass-Through Certificates, Class __, representing a
[___% Percentage Interest][$ denomination]
---------------------------------------------------
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of the
captioned Certificates (the "Residual Certificates"), issued by the Trust
established pursuant to a pooling and servicing agreement dated as of
__________________, ____ (the "Series Agreement"), among Oakwood Mortgage
Investors, Inc. ("OMI"), Oakwood Acceptance Corporation ("OAC"), and
_____________________________, as Trustee, which incorporates by reference the
Standard Terms thereto, July 1998 Edition (the "Standard Terms" and,
collectively with the Series Agreement, the "Agreement"). In doing so the
Transferee hereby acknowledges and agrees as follows:
SECTION 1. DEFINITIONS. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE. In connection
with the proposed transfer of the Purchased Certificates, the Transferee
represents and warrants to OMI, OAC, the Servicer, the Trustee and the Trust as
follows:
(a) The Transferee has knowledge in financial and business matters
and is capable of
Exhibit 8 - Page 1
<PAGE>
evaluating the merits and risks of an investment in the Residual
Certificates; the Transferee has sought such accounting, legal
and tax advice as it has considered necessary to make an informed
decision; and the Transferee is able to bear the economic risk of an
investment in the Residual Certificates and can afford a complete loss of
such investment.
(b) The Transferee represents that (i) it understands that each of
the Residual Certificates represents for federal income tax purposes a
"residual interest" in a real estate mortgage investment conduit (a
"REMIC") and that, as the holder of the Residual Certificates, it will be
required to take into account, in determining its taxable income, its PRO
RATA share of the taxable income of the REMIC, (ii) it understands that it
may incur federal income tax liabilities with respect to the Residual
Certificates in excess of any cash flows generated by the Residual
Certificates and (iii) it has historically paid its debts as they became
due and has the financial wherewithal and intends to continue to pay its
debts as they come due in the future, including any tax imposed on the
income that it derives from the Residual Certificates as such taxes become
due.
*(c) The Transferee is acquiring the Residual Certificates for its
own account as principal and not with a view to the resale or distribution
thereof, in whole or in part, in violation of Section 5 of the Securities
Act of 1933, as amended (the "Act").
*(d) The Transferee confirms that OMI has made available to the
Transferee the opportunity to ask questions of, and receive answers from,
OMI concerning OMI, the Trust, the purchase by the Transferee of the
Residual Certificates and all matters relating thereto, and to obtain
additional information relating thereto that OMI possesses or can acquire
unreasonable effort or expense.
SECTION 3. COVENANTS. The Transferee covenants:
(a) The Transferee will not make a public offering of the Residual
Certificates, and will not reoffer or resell the Residual Certificates in
a manner that would render the issuance and sale of the Residual
Certificates whether considered together with the resale or otherwise, a
violation of the Act, or any state securities or "Blue Sky" laws or
require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a holder of the
Residual Certificates, it will assert no claim or interest in the
Contracts by reason of owning the Residual Certificates other than with
respect to amounts that may be properly and actually payable to the
Transferee pursuant to the terms of the Pooling and Servicing Agreement
and the Certificates.
(c) If applicable, the Transferee will comply with respect to the
Residual Certificates in all material respects with applicable regulatory
guidelines relating to the ownership of mortgage derivative products.
(d) Upon notice thereof, the Transferee agrees to any future
amendment to the provisions of the Pooling and Servicing Agreement
relating to the transfer of the Residual Certificates (or any interest
therein) that counsel to OMI or the Trust may deem necessary to ensure
that any such transfer will not result in the imposition of any tax on the
Trust.
- -----------------
*These representations and covenants are to be deleted if the Residual
Securities are not Private Securities.
Exhibit 8 - Page 2
<PAGE>
(e) The Transferee hereby agrees that the Servicer or an affiliate
thereof will (i) supervise or engage in any action necessary or advisable
to preserve the status of the REMIC as a REMIC, (ii) be, and perform the
functions of, the REMIC's tax matters person ("TMP"), and (iii) employ on
a reasonable basis counsel, accountants, and professional assistance to
aid in the preparation of tax returns or the performance of the above.
(f) The Transferee hereby agrees to cooperate with the TMP and to
take any action required of it by the REMIC Provisions in order to create
or maintain the REMIC status of the REMIC.
(g) The Transferee hereby agrees that it will not take any action
that could endanger the REMIC status of any related REMIC or result in the
imposition of tax on any such REMIC unless counsel for, or acceptable to,
the TMP has provided an opinion that such action will not result in the
loss of such REMIC status or the imposition of such tax, as applicable.
SECTION 4. ADDITIONAL TRANSFER RESTRICTIONS.
(a) No transfer of the Residual Certificates shall be made unless
the Servicer has consented in writing to such transfer. No Residual
Certificate may be transferred to a Disqualified Organization. The
Servicer will not consent to any proposed transfer (i) to any investor
that it knows is a Disqualified Organization or (ii) if the transfer
involves less than an entire interest in a Residual Certificate unless (A)
the interest transferred is an undivided interest or (B) the transferor or
the transferee provides the Servicer with an Opinion of Counsel obtained
at its own expense to the effect that the transfer will not jeopardize the
REMIC status of any related REMIC. The Servicer's consent to any transfer
is further conditioned the Servicer's receipt from the proposed transferee
of (x) a Residual Transferee Agreement, (y) a Benefit Plan Affidavit, and
(z) either (A) if the transferee is a Non-U.S. Person, an affidavit of the
proposed transferee in substantially the form attached as Exhibit 8-A to
Exhibit 8 to the Standard Terms and a certificate of the transferor
stating whether the Class R Certificate has "tax avoidance potential" as
defined in Treasury Regulations Section 1.860G-3(a)(2), or (B) if the
transferee is a U.S. Person, an affidavit in substantially the form
attached as Exhibit 8-B to Exhibit 8 to the Standard Terms. In addition,
if a proposed transfer involves a Private Certificate, (1) the Servicer or
the Trustee shall require that the transferor and transferee certify as to
the factual basis for the registration or qualification exemption(s)
relied upon to exempt the transfer from registration under the Act and all
applicable state securities or "blue sky" laws, and (2) if the transfer is
to be made within three years after the acquisition thereof by a
non-Affiliate of OMI from OMI or an Affiliate of OMI, the Servicer or the
Trustee also may require an Opinion of Counsel that such transfer may be
made without registration or qualification under the Act and applicable
state securities laws, which Opinion of Counsel shall not be obtained at
the expense of OMI, the Trustee or the Servicer. Notwithstanding the
foregoing, no Opinion of Counsel shall be required in connection with the
initial transfer of the Residual Certificates or their transfer by a
broker or dealer, if such broker or dealer was the initial transferee.
Notwithstanding the fulfillment of the prerequisites described above, the
Servicer may withhold its consent to, or the Trustee may refuse to
recognize, a transfer of a Residual Certificate, but only to the extent
necessary to avoid a risk of disqualification of a related REMIC as a
REMIC or the imposition of a tax upon any such REMIC. Any attempted
transfer in violation of the foregoing restrictions shall be null and void
and shall not be recognized by the Trustee.
(b) If a tax or a reporting cost is borne by a related REMIC as a
result of the transfer of the Residual Certificates or any beneficial
interest therein, in violation of the restrictions referenced herein, the
Transferor shall pay such tax or cost and, if such tax or costs are not so
paid, the Trustee, upon notification from the Servicer, shall pay such tax
or reporting cost with amounts that otherwise would have been paid to the
transferee of such Residual Certificates. In that event, neither the
Transferee nor the transferor shall have any right to seek repayment of
such amounts from OMI, the Servicer, the Trustee, the Trust, the
Exhibit 8 - Page 3
<PAGE>
REMIC or the holders of any other Certificates, and none of such parties
shall have anyliability for payment of any such tax or reporting cost. In
the event that a Residual Certificate is transferred to a Disqualified
Organization, the Servicer shall make, or cause to be made, available the
information necessary for the computation of the excise tax imposed under
section 860E(e) of the Code.
SECTION 5. ACKNOWLEDGMENTS.
(a) The Transferee acknowledges that, if the Residual Certificates
are Private Certificates, the Residual Certificates have not been
registered under the Act or registered or qualified under any state
securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the Act and under applicable state law
or unless an exemption from such registration is available. The Transferee
further understands that neither OMI, the Servicer nor the Trust is under
any obligation to register the Certificate or make an exemption from such
registration available.
(b) The Transferee acknowledges that if any United States federal
income tax is due at the time a Non-U.S. Person transfers a Residual
Certificate, the Trustee or its designated Paying Agent or other person
who is liable to withhold federal income tax from a distribution on a
Residual Certificate under sections 1441 and 1442 of the Code and the
regulations thereunder (the "Withholding Agent") may (i) withhold an
amount equal to the taxes due upon disposition of the Certificate from
future distributions made with respect to the Certificate to the
transferee (after giving effect to the withholding of taxes imposed on
such transferee), and (ii) pay the withheld amount to the Internal Revenue
Service unless satisfactory written evidence of payment of the taxes due
by the transferor has been provided to the Withholding Agent. Moreover,
the Withholding Agent may (x) hold distributions on a Certificate, without
interest, pending determination of amounts to be withheld, (y) withhold
other amounts required to be withheld pursuant to United States federal
income tax law, if any, from distributions that otherwise would be made to
such transferee on each Certificate it holds, and (z) pay to the Internal
Revenue Service all such amounts withheld.
(c) The Transferee acknowledges that the transfer of all or part of
the Residual Certificates that have "tax avoidance potential" (as defined
in Treasury Regulations section 1.860G-3(a)(2) or any successor provision)
to a Non-U.S. Person will be disregarded for all federal income tax
purposes.
(d) The Transferee acknowledges that the transfer of the Residual
Certificates to a U.S. Person will be disregarded for all federal income
tax purposes if a significant purpose of the transfer is to impede the
assessment or collection of the taxes and expenses associated with the
security within the meaning of Treasury regulation section 1.860E-1(c)(1).
IN WITNESS WHEREOF, the undersigned has caused the Pooling and Servicing
Agreement be validly executed by its duly authorized representative as of the
day and year first above written.
[Name of Transferee]
By: _______________________
Its: ________________________
Exhibit 8 - Page 4
<PAGE>
EXHIBIT 8-A
-----------
OAKWOOD MORTGAGE INVESTORS, INC.
FOREIGN PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(A)(6)(A) AND 860E(E)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Oakwood Mortgage Investors, Inc.
Series __________ Trust (the "Trust")
Pass-Through Certificates, Class __
STATE OF ___________ )
) ss.:
COUNTY OF __________ )
Under penalties of perjury, I, the undersigned, declare that to the best
of my knowledge and belief, the following representations are true, correct, and
complete:
1. I am a duly authorized officer of ___________________ (the
"Transferee"), and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee is a foreign person within the meaning of Treasury
Regulation Section 1.860G- 3(a)(1) (I.E., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, or (iii) an estate or trust that is subject to United States federal
income tax regardless of the source of its income) who would be subject to
United States income tax withholding pursuant to Section 1441 or 1442 of the
Code on income derived from the Residual Certificates (a "Non-U.S. Person").
4. The Transferee agrees that it will not hold the Residual Certificates
in connection with a trade or business in the United States, and the Transferee
understands that it will be subject to United States federal income tax under
sections 871 and 881 of the Code in accordance with section 860G of the Code and
any Treasury regulations issued thereunder on "excess inclusions" that accrue
with respect to the Residual Certificates during the period the Transferee holds
the Residual Certificates.
5. The Transferee understands that the federal income tax on excess
inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States federal income
tax return for the year in which disposition of a Residual Certificate it holds
occurs (or earlier if required by law) and will pay any United States federal
income tax due at that time and (ii) if any tax is due at that time, to provide
satisfactory written evidence of payment to the Trustee or its designated paying
agent or other person who is liable to withhold federal income tax from a
distribution on the Residual Certificates under sections 1441 and 1442 of the
Code and the
Exhibit 8-A - Page 1
<PAGE>
regulations thereunder (the "Withholding Agent").
7. The Transferee understands that, until such written notice is provided,
the Withholding Agent may (i) withhold an amount equal to the taxes due upon
disposition of a Residual Certificates from future distributions made with
respect to the Residual Certificate to subsequent transferees (after giving
effect to the withholding of taxes imposed on such subsequent transferees), and
(ii) pay the withheld amount to the Internal Revenue Service.
8. The Transferee understands that (i) the Withholding Agent may withhold
other amounts required to be withheld pursuant to United States federal income
tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificates it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual Certificate
(or any interest therein) to a United States Person (including a foreign person
who is subject to net United States federal income taxation with respect to such
Residual Certificate), the Withholding Agent may disregard the transfer for
federal income tax purposes if the transfer would have the effect of allowing
the Transferee to avoid tax on accrued excess inclusions and may continue to
withhold tax from future distributions as though the Residual Certificate were
still held by the Transferee.
10. The Transferee understands that a transfer of a Residual Certificate
(or any interest therein) to a Non-U.S. Person (I.E., a foreign person who is
not subject to net United States federal income tax with respect to such
Residual Certificate) will not be recognized unless the Withholding Agent has
received from the transferee an affidavit in substantially the same form as this
affidavit containing these same agreements and representations.
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
13. The Transferee agrees to consent to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by OMI (upon the advice of
counsel to OMI) to constitute a reasonable arrangement to ensure that no
interest in a Residual Certificate will be owned directly or indirectly by a
Disqualified Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, ____, which incorporates by reference the Standard
Exhibit 8-A - Page 2
<PAGE>
Terms thereto (July 1998 Edition), among Oakwood Mortgage Investors, Inc.,
Oakwood Acceptance Corporation, and ____________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be duly
executed on its behalf, by its duly authorized officer as of the _______ day of
_____________, ____.
[Name of Transferee]
By: _______________________
Its: ______________________
Personally appeared before me ___________________________, known or proved
to me to be the same person who executed the foregoing instrument and to be a
______________________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this ______ day of __________, ____.
Notary Public
-------------------------------------------------------
My commission expires the _____ day of ________________, ____.
Exhibit 8-A - Page 3
<PAGE>
EXHIBIT 8-B
-----------
OAKWOOD MORTGAGE INVESTORS, INC.
AFFIDAVIT PURSUANT TO SECTIONS
860D(A)(6)(A) AND 860E(E)(4)
OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
Re: Oakwood Mortgage Investors, Inc.
Series ________ Trust (the "Trust")
Pass-Through Certificates, Class ___
STATE OF __________________________ )
) ss.:
COUNTY OF _________________________ )
Under penalties of perjury, I, the undersigned declare that, to the best
of my knowledge and belief, the following representations are true, correct and
complete:
1. I am a duly authorized officer of ______________________ (the
"Transferee"), on behalf of which I have the authority to make this affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the United
States, (ii) a domestic partnership or corporation, (iii) an estate or trust
that is subject to United States federal income tax regardless of the source of
its income, (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust, or (v) a foreign person who would be subject to United States
income taxation on a net basis on income derived from the Residual Certificates
(a "U.S. Person").
4. The Transferee is a not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in ss. 1381(a)(2)(C) of the Code; or (iv) any other entity
so designated by Treasury rulings or regulations promulgated or otherwise in
effect as of the date hereof. In addition, a corporation will not be treated as
an instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such governmental unit.
5. The Transferee agrees to consent to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Issuer (upon advice of
counsel to the Issuer) to constitute a reasonable arrangement to ensure that no
interest in a Residual Certificate will be owned directly or indirectly by a
Disqualified Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Exhibit 8-B - Page 1
<PAGE>
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, ____, which incorporates by reference the Standard Terms
thereto (July 1998 Edition), among Oakwood Mortgage Investors, Inc., the
Servicer, and ____________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be duly
executed on its behalf by its duly authorized officer this ____ day of ______,
____.
[Name of Transferee]
By: ___________________
Its: _________________
Personally appeared before me ___________________, known or proved to me
to be the same person who executed the foregoing instrument and to be a
_______________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this ____ day of ________, ____.
Notary Public
------------------------------------------------
My commission expires the ____ day of ____________________, ____.
Exhibit 8-B - Page 2
<PAGE>
EXHIBIT 9
---------
FORM OF POWER OF ATTORNEY
Oakwood Acceptance Corporation ("OAC"), pursuant to the Pooling and
Servicing Agreement, dated as of ______________________, _______, among Oakwood
Mortgage Investors, Inc. ("OMI"), OAC, and _____________________________, as
Trustee (the "Trustee"), which incorporates by reference OMI's Standard Terms to
Pooling and Servicing Agreement (July 1998 Edition) (the "Standard Terms"),
hereby irrevocably constitutes and appoints the Trustee its true and lawful
attorney-in-fact and agent, to execute, acknowledge, verify, swear to, deliver,
record and file, in its name, place and stead, assignments of Mortgages relating
to Loan Secured Contracts from OAC to the Trustee as contemplated by Section
2.02 of the Standard Terms. If required, OAC shall execute and deliver to the
Trustee, upon the Trustee's request therefor, such further designations, powers
of attorney or other instruments as the Trustee may reasonably deem necessary
for the purposes hereof.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Agreement.
OAKWOOD ACCEPTANCE CORPORATION
By: __________________________________________
Name: _______________________________________
Title: ________________________________________
Acknowledged and Agreed:
[Name of Trustee]
By: ___________________________
Name: _________________________
Title: ________________________
Exhibit 9 - Page 1
