EXHIBIT 4
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
CONTRACT SELLER,
BANK OF AMERICA, FSB,
acting through its division,
BANKAMERICA HOUSING SERVICES,
CONTRACT SELLER AND SERVICER,
and
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of Xxxxx 0, 0000
XxxxXxxxxxx Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates
Series 1998-1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................... 2
Section 1.01 Terms........................................................ 2
Section 1.02 Construction................................................. 21
ARTICLE II CONVEYANCE OF CONTRACTS; REPRESENTATIONS AND WARRANTIES....... 22
Section 2.01 Conveyance of Contracts...................................... 22
Section 2.02 Filing and Assignment; Name Change or Relocation............. 23
Section 2.03 Acceptance by Trustee........................................ 24
Section 2.04 Certificate Ratings.......................................... 24
Section 2.05 Representations and Warranties Regarding the Servicer........ 24
Section 2.06 Covenants of the Contract Sellers, Trustee and Servicer...... 26
Section 2.07 Authentication and Delivery of Certificates.................. 26
Section 2.08 Covenants of the Servicer.................................... 26
ARTICLE III REPRESENTATIONS AND WARRANTIES BY THE CONTRACT SELLERS........ 27
Section 3.01 Representations and Warranties of the Contract Sellers....... 27
Section 3.02 Representations and Warranties Regarding Each Contract....... 28
Section 3.03 Representations and Warranties Regarding the Contracts
in the Aggregate............................................. 32
Section 3.04 Representations and Warranties Regarding the Contracts....... 33
Section 3.05 REPURCHASES OF CONTRACTS OR SUBSTITUTION OF
CONTRACTS FOR BREACH OF REPRESENTATIONS
AND WARRANTIES............................................... 33
Section 3.06 General...................................................... 36
ARTICLE IV ADMINISTRATION AND SERVICING OF CONTRACTS..................... 37
Section 4.01 Responsibility for Contract Administration and Servicing..... 37
Section 4.02 Standard of Care............................................. 37
Section 4.03 Records...................................................... 37
Section 4.04 Inspection................................................... 38
Section 4.05 Establishment of and Deposits in Certificate Accounts........ 38
Section 4.06 Payment of Taxes............................................. 39
Section 4.07 Enforcement.................................................. 39
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TABLE OF CONTENTS
(continued)
Page
Section 4.08 Transfer of Certificate Account.............................. 40
Section 4.09 Maintenance of Hazard Insurance Policies..................... 40
Section 4.10 Fidelity Bond and Errors and Omissions Insurance............. 41
Section 4.11 Collections under Hazard Insurance Policies;
Consent to Transfers of Manufactured Homes;
Assumption Agreements........................................ 42
Section 4.12 Realization upon Defaulted Contracts......................... 43
Section 4.13 Costs and Expenses........................................... 43
Section 4.14 Trustee to Cooperate......................................... 43
Section 4.15 Servicing and Other Compensation............................. 44
Section 4.16 Custody of Contracts......................................... 44
Section 4.17 REMIC Compliance............................................. 46
Section 4.18 Management of REO Property................................... 51
Section 4.19 Reports to the Securities and Exchange Commission............ 53
Section 4.20 Annual Statement as to Compliance............................ 53
Section 4.21 Annual Independent Public Accountants' Servicing Report...... 53
Section 4.22 Retitling of Land Home Contracts............................. 54
ARTICLE V PAYMENTS, MONTHLY ADVANCES AND MONTHLY REPORTS................ 55
Section 5.01 Monthly Advances by the Servicer............................. 55
Section 5.02 Payments..................................................... 55
Section 5.03 Permitted Withdrawals from the Certificate Account........... 57
Section 5.04 Monthly Reports.............................................. 58
Section 5.05 Certificate of Servicing Officer............................. 61
Section 5.06 Other Data................................................... 61
Section 5.07 Statements to Certificateholders............................. 61
Section 5.08 Reserve Account.............................................. 64
ARTICLE VI THE CERTIFICATES.............................................. 66
Section 6.01 The Certificates............................................. 66
Section 6.02 Certificate Register; Registration of Transfer
and Exchange of Certificates................................. 67
Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates............ 71
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TABLE OF CONTENTS
(continued)
Page
Section 6.04 Persons Deemed Owners........................................ 71
Section 6.05 Access to List of Certificateholders' Names and Addresses.... 71
Section 6.06 Global Certificates.......................................... 71
Section 6.07 Notices to Depository........................................ 72
Section 6.08 Definitive Certificates...................................... 72
ARTICLE VII THE CONTRACT SELLERS AND THE SERVICER......................... 74
Section 7.01 Liabilities to Obligors...................................... 74
Section 7.02 Servicer's Indemnities....................................... 74
Section 7.03 Operation of Indemnities..................................... 74
Section 7.04 Merger or Consolidation of the Contract Sellers or the
Servicer..................................................... 74
Section 7.05 Limitation on Liability of the Contract Sellers, the Servicer
and Others................................................... 75
Section 7.06 Assignment by Servicer....................................... 75
Section 7.07 Successor to the Servicer.................................... 76
ARTICLE VIII EVENTS OF DEFAULT............................................. 78
Section 8.01 Events of Default............................................ 78
Section 8.02 Waiver of Defaults........................................... 79
Section 8.03 Trustee to Act; Appointment of Successor..................... 79
Section 8.04 Notification to Certificateholders........................... 79
Section 8.05 Effect of Transfer........................................... 80
Section 8.06 Transfer of the Accounts..................................... 80
ARTICLE IX CONCERNING THE TRUSTEE........................................ 81
Section 9.01 Duties of Trustee............................................ 81
Section 9.02 Certain Matters Affecting the Trustee........................ 82
Section 9.03 Trustee not Liable for Certificates or Contracts............. 83
Section 9.04 Trustee May Own Certificates................................. 83
Section 9.05 Servicer to Pay Fees and Expenses of Trustee, Paying Agent
and Certificate Administrator................................ 83
Section 9.06 Eligibility Requirements for Trustee......................... 84
Section 9.07 Resignation and Removal of the Trustee....................... 84
Section 9.08 Successor Trustee............................................ 85
Section 9.09 Merger or Consolidation of Trustee........................... 85
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TABLE OF CONTENTS
(continued)
Page
Section 9.10 Appointment of Co-Trustee or Separate Trustee................ 86
Section 9.11 Appointment of Office or Agency.............................. 87
Section 9.12 Certificate Administrator.................................... 87
Section 9.13 Appointment of Paying Agent.................................. 87
ARTICLE X TERMINATION................................................... 89
Section 10.01 Termination.................................................. 89
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 93
Section 11.01 Amendment.................................................... 93
Section 11.02 Recordation of Agreement; Counterparts....................... 94
Section 11.03 Governing Law................................................ 94
Section 11.04 Calculations................................................. 94
Section 11.05 Notices...................................................... 94
Section 11.06 Severability of Provisions................................... 95
Section 11.07 Assignment................................................... 96
Section 11.08 Limitation on Rights of Certificateholders................... 96
Section 11.09 Inspection and Audit Rights.................................. 96
Section 11.10 Certificates Nonassessable and Fully Paid.................... 97
Section 11.11 Official Record.............................................. 97
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This POOLING AND SERVICING AGREEMENT, dated as of March 1, 1998 (the
"Agreement"), is executed by and among Bank of America National Trust and
Savings Association ("Bank of America"), as a Contract Seller (a "Contract
Seller"), Bank of America, FSB ("BAFSB"), acting through its division,
BankAmerica Housing Services, as a Contract Seller (in such capacity, a
"Contract Seller," and, together with Bank of America, the "Contract Sellers")
and the Servicer (in such capacity, the "Servicer"), and The First National Bank
of Chicago, as trustee (together with its permitted successors in trust, the
"Trustee").
Bank of America, as a Contract Seller, and BAFSB, acting through its
division, BankAmerica Housing Services, as a Contract Seller and Servicer, have
duly authorized the execution and delivery of this Agreement to provide for the
issuance of BankAmerica Manufactured Housing Contract Trust IV,
Senior/Subordinate Pass-Through Certificates, Series 1998-1 (the
"Certificates"). The Certificates issued hereunder shall be limited to the
amount herein described. All covenants and agreements made by the Contract
Sellers herein are for the benefit and security of the Certificateholders. The
Contract Sellers are entering into this Agreement, and the Trustee is accepting
the trusts created hereby for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
In consideration of the premises and the mutual agreements hereinafter
set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Terms.
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Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Adverse REMIC Event: As defined in Section 4.17(f) hereof.
-------------------
Advisor: As defined in Section 10.01(b)(3) hereof.
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Affiliate: As to any specified Person, any other Person controlling or
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controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
Aggregate Net Liquidation Losses: With respect to the time of reference
--------------------------------
thereto, the aggregate of the amounts by which (i) the outstanding principal
balance of each Contract that during such time of reference had become a
Liquidated Contract, plus accrued and unpaid interest thereon at the related
Contract Rate to the Due Date for such Contract in the Collection Period in
which such Contract became a Liquidated Contract exceeds (ii) the Net
Liquidation Proceeds for such Contract.
Agreement: This Pooling and Servicing Agreement and any and all amendments
---------
or supplements hereto.
Annual Servicing Rate: 1.00% per annum (or, in the case of a successor
---------------------
Servicer engaged at any time after BAFSB is no longer the Servicer, the
percentage agreed upon pursuant to Section 7.07).
Assignment: An individual assignment of a Mortgage, notice of transfer or
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equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale or transfer of the related Land Home Contract.
Auction Date: As defined in Section 10.01(b) hereof.
------------
Available Distribution Amount: As to any Distribution Date, the sum of (a)
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the amount on deposit or otherwise credited to the Certificate Account as of the
end of the Collection Period ending immediately prior to such Distribution Date,
less the portion of such amount (i) permitted to be withdrawn by the Servicer
pursuant to Section 5.03 or (ii) constituting Excess Contract Payments and (b)
the Monthly Advance for such Distribution Date actually made in respect of such
Distribution Date.
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Average Sixty-Day Delinquency Ratio: As to any Distribution Date, the
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arithmetic average of the Sixty-Day Delinquency Ratios for such Distribution
Date and the two preceding Distribution Dates.
Average Thirty-Day Delinquency Ratio: As to any Distribution Date, the
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arithmetic average of the Thirty-Day Delinquency Ratios for such Distribution
Date and the two preceding Distribution Dates.
BAFSB: Bank of America, FSB, its successors or assigns.
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Bank of America: Bank of America National Trust and Savings Association,
---------------
its successors or assigns.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
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on which banking institutions in the City of New York, New York, or the State of
California or the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
Cap Rate: With respect to each of the Class M Certificates, Class B-1
--------
Certificates and the Class B-2 Certificates, that interest rate set forth in
subparagraph (a) of the definitions of Class M Pass-Through Rate, Class B-1
Pass-Through Rate and Class B-2 Pass-Through Rate, respectively.
Certificate: Any of the BankAmerica Manufactured Housing Contract Trust
-----------
IV, Senior/Subordinate Pass-Through Certificates, Series 1998-1.
Certificate Account: The separate Eligible Account created and initially
-------------------
maintained by the Trustee pursuant to Section 4.05 in the name of the Trustee
for the benefit of the Holders of the Certificates. Funds in the Certificate
Account shall be held in trust for the aforementioned Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Administrator: The Person appointed by the Trustee from time
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to time pursuant to Section 9.12.
Certificate Balance: When used with respect to a single Class, the Class A
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Certificate Balance, Class M Certificate Balance, Class B-1 Certificate Balance
or Class B-2 Certificate Balance, as applicable; and when used with respect to
more than one Class of Certificates, the sum of the Class A Certificate Balance,
Class M Certificate Balance, Class B-1 Certificate Balance and Class B-2
Certificate Balance, as applicable.
Certificate Owner: With respect to a Global Certificate, the person that
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is the beneficial owner of an interest in such Global Certificate.
Certificate Register: The register maintained pursuant to Section 6.02
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hereof.
Certificateholder or Holder: The person in whose name a Certificate is
----------------- ------
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Global Certificates), except that solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of a Contract Seller, the Servicer or any
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Affiliate of a Contract Seller or the Servicer shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
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any such Person (including a Contract Seller) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Contract Sellers, the Servicer or any Affiliate of the
Contract Sellers or the Servicer in determining which Certificates are
registered in the name of an Affiliate of the Contract Sellers or the Servicer.
Class or Class A, Class M, Class B-1, Class B-2 or Class R: Pertaining to
------ ------- ------- --------- --------- -------
Class A Certificates, Class M Certificates, Class B-1 Certificates, Class B-2
Certificates or Class R Certificates, as the case may be.
Class A Certificate: Any one of the Certificates, executed and
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authenticated as provided herein, substantially in the form set forth in Exhibit
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B-1 and Exhibit C hereto.
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Class A Certificate Balance: At any time, the Initial Class A Certificate
---------------------------
Balance minus the sum of all principal distributions previously made to the
Class A Certificateholders (including distributions made pursuant to clause (x)
of Section 5.02).
Class A Distribution Amount: As to any Distribution Date, the total amount
---------------------------
distributed to the Class A Certificateholders pursuant to Section 5.02.
Class A Interest Distribution Amount: As to any Distribution Date, an
------------------------------------
amount equal to the sum of (a) one month's interest (or with respect to the
First Distribution Date, interest from and including the Closing Date to but
excluding the First Distribution Date) and at the Class A Pass-Through Rate on
the Class A Certificate Balance as of such Distribution Date (before giving
effect to the principal distributions on such Distribution Date) and (b) any
Class A Unpaid Interest Shortfall.
Class A Interest Shortfall: As to any Distribution Date, any amount by
--------------------------
which the amount distributed to Holders of Class A Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class A Interest Distribution Amount."
Class A Pass-Through Rate: 6.47% per annum.
-------------------------
Class A Unpaid Interest Shortfall: As to any Distribution Date, the
---------------------------------
amount, if any, by which the aggregate of the Class A Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class A Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class A Pass-Through Rate on such amount with respect to such prior Distribution
Dates.
Class B Certificate Balance: As to any Distribution Date, the sum of the
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Class B-1 and Class B-2 Certificate Balances (before giving effect to the
principal distributions on such Distribution Date).
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Class B-1 Certificate: Any one of the Certificates, executed and
---------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
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B-3 and Exhibit C hereto.
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Class B-1 Certificate Balance: At any time, the Initial Class B-1
-----------------------------
Certificate Balance minus the sum of all principal distributions previously made
to the Class B-1 Certificateholders.
Class B-1 Distribution Amount: As to any Distribution Date, the total
-----------------------------
amount distributed to the Class B-1 Certificateholders pursuant to Section 5.02.
Class B-1 Interest Distribution Amount: As to any Distribution Date, an
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amount equal to the sum of (a) one month's interest at the Class B-1 Pass-
Through Rate on the Class B-1 Certificate Balance as of such Distribution Date
(before giving effect to the principal distributions on such Distribution Date)
and (b) any Class B-1 Unpaid Interest Shortfall.
Class B-1 Interest Shortfall: As to any Distribution Date, any amount by
----------------------------
which the amount distributed to Holders of Class B-1 Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class B-1 Interest Distribution Amount."
Class B-1 Pass-Through Rate: The lesser of (a) 7.81% per annum and (b) the
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Net Weighted Average Contract Rate.
Class B-1 Unpaid Interest Shortfall: As to any Distribution Date, the
-----------------------------------
amount, if any, by which the aggregate of the Class B-1 Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class B-1 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class B-1 Pass-Through Rate on such amount with respect to such prior
Distribution Dates.
Class B-2 Certificate: Any one of the Certificates, executed and
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authenticated as provided herein, substantially in the form set forth in Exhibit
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B-4 and Exhibit C hereto.
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Class B-2 Certificate Balance: At any time, the Initial Class B-2
-----------------------------
Certificate Balance minus the sum of all principal distributions previously made
to the Class B-2 Certificateholders.
Class B-2 Distribution Amount: As to any Distribution Date, the total
-----------------------------
amount distributed to the Class B-2 Certificateholders pursuant to Section 5.02.
Class B-2 Interest Distribution Amount: As to any Distribution Date, an
--------------------------------------
amount equal to the sum of (a) one month's interest at the Class B-2 Pass-
Through Rate on the Class B-2 Certificate Balance as of such Distribution Date
(before giving effect to the principal distributions on such Distribution Date)
and (b) any Class B-2 Unpaid Interest Shortfall.
Class B-2 Interest Shortfall: As to any Distribution Date, any amount by
----------------------------
which the amount distributed to Holders of Class B-2 Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class B-2 Interest Distribution Amount."
Class B-2 Pass-Through Rate: The lesser of (a) 8.00% per annum and (b) the
---------------------------
Net Weighted Average Contract Rate.
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Class B-2 Unpaid Interest Shortfall: As to any Distribution Date, the
-----------------------------------
amount, if any, by which the aggregate of the Class B-2 Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class B-2 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class B-2 Pass-Through Rate on such amount with respect to such prior
Distribution Dates.
Class M Certificate: Any one of the Certificates, executed and
-------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
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B-2 and Exhibit C hereto.
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Class M Certificate Balance: At any time, the Initial Class M Certificate
---------------------------
Balance minus the sum of all principal distributions previously made to the
Class M Certificateholders.
Class M Distribution Amount: As to any Distribution Date, the total amount
---------------------------
distributed to the Class M Certificateholders pursuant to Section 5.02.
Class M Interest Distribution Amount: As to any Distribution Date, an
------------------------------------
amount equal to the sum of (a) one month's interest at the Class M Pass-Through
Rate on the Class M Certificate Balance as of such Distribution Date (before
giving effect to the principal distributions on such Distribution Date) and (b)
any Class M Unpaid Interest Shortfall.
Class M Interest Shortfall: As to any Distribution Date, any amount by
--------------------------
which the amount distributed to Holders of Class M Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class M Interest Distribution Amount."
Class M Pass-Through Rate: The lesser of (a) 6.94% per annum and (b) the
-------------------------
Net Weighted Average Contract Rate.
Class M Unpaid Interest Shortfall: As to any Distribution Date, the
---------------------------------
amount, if any, by which the aggregate of the Class M Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class M Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class M Pass-Through Rate on such amount with respect to such prior Distribution
Dates.
Class R Certificate: Any one of the Certificates, executed and
-------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
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D hereto.
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Closing Date: March 27, 1998.
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Code: The Internal Revenue Code of 1986, including any successor or
----
amendatory provisions.
Collected Scheduled Payments: As to any Distribution Date, (a) the amount
----------------------------
on deposit in the Certificate Account as of the end of the related Collection
Period, less (b) the sum of (i) the aggregate of all Partial Prepayments
collected during such Collection Period, (ii) the aggregate of all payments
collected during such Collection Period on Contracts that were prepaid in full
during such Collection Period (less the aggregate of the scheduled payments due
on such Contracts that were delinquent as of the beginning of such Collection
Period and recovered out of such collections), (iii) the aggregate of the Net
Liquidation Proceeds collected in respect of all Contracts that became
Liquidated Contracts during such Collection Period (less the aggregate of
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scheduled payments due on such Contracts that were delinquent at the beginning
of such Collection Period and recovered out of such collections and less any
Repossession Profits collected during such Collection Period), (iv) the
aggregate of the Repurchase Prices of all Contracts that were repurchased by a
Contract Seller pursuant to Section 3.05 (less the aggregate of scheduled
payments due on such Contracts that were delinquent at the beginning of such
Collection Period and recovered out of such collections), (v) the amounts
permitted to be withdrawn by the Servicer from the Certificate Account pursuant
to clauses (i), (ii), (iii), (iv), (v) and (vii) of Section 5.03, and (vi)
amounts representing Excess Contract Payments.
Collection Period: With respect to any Distribution Date, the calendar
-----------------
month preceding the month of the Distribution Date.
Computer Tape: The computer tape generated by the Servicer on behalf of
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the Contract Sellers which provides information relating to the Contracts sold
by the Contract Sellers, and includes the master file and the history file.
Contract: Any one of the manufactured housing installment sale contracts
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or installment loan agreements, including any Land Home Contracts, described in
the Contract Schedule and constituting part of the corpus of the Trust Fund,
which Contracts are to be sold and assigned by the Contract Sellers to the
Trustee and which are the subject of this Agreement. The Contracts include all
related security interests and any and all rights to receive payments which are
due pursuant thereto from and after the Cut-Off Date, but exclude any rights to
receive payments which were due pursuant thereto prior to the Cut-Off Date.
Contract File: As to each Contract other than a Land Home Contract, (a)
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the original copy of the Contract, (b) the original title document issued to
BankAmerica Housing Services as secured lender or agent therefor for the related
Manufactured Home, unless the laws of the jurisdiction in which the related
Manufactured Home is located do not provide for the issuance of any title
documents for manufactured housing to secured lenders, (c) evidence of one or
more of the following types of perfection of the security interest in favor of
the BankAmerica Housing Services as secured lender or agent therefor in the
related Manufactured Home granted by such Contract, as appropriate: (1)
notation of such security interest on the title document, (2) a financing
statement meeting the requirements of the UCC, with evidence of recording in the
appropriate offices indicated thereon, or (3) such other evidence of perfection
of a security interest in a manufactured housing unit as is customary in such
jurisdiction, (d) the assignment of the Contract from the manufactured housing
dealer to the BankAmerica Housing Services, if any, including any intervening
assignments, and (e) any extension, modification or waiver agreement(s).
Contract Pool: The pool of Contracts held in the Trust Fund.
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Contract Rate: With respect to each Contract, the per annum rate of
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interest borne by such Contract, as set forth in such Contract.
Contract Schedule: The list identifying each Contract, as amended from
-----------------
time to time, constituting part of the corpus of the Trust Fund, which list is
attached hereto as Exhibit A and which (a) identifies each Contract by contract
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number and name and address of the Obligor, and (b) sets forth as to each
Contract (i) the Scheduled Principal Balance as of the Cut-Off Date,
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(ii) the amount of each monthly payment due from the Obligor, (iii) the Contract
Rate, and (iv) the maturity date.
Contract Sellers: As to any Contract sold by it, BAFSB or Bank of America,
----------------
as the case may be, in each case in its capacity as seller of certain Contracts
to the Trust Fund pursuant to this Agreement; it being understood that wherever
the term "Contract Seller" is used hereunder, it is meant to refer to each such
Contract Seller with respect to the Contracts sold by it.
Corporate Trust Office: The principal corporate trust office of the
----------------------
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date of execution of this Agreement is located
at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate
Trust Services Division, except that for purposes of Section 9.11, such term
shall mean the office or agency of the Trustee in the Borough of Manhattan, the
City of New York, which office at the date hereof is located at 00 Xxxx Xxxxxx,
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Cumulative Realized Losses: As to any Distribution Date, the Aggregate Net
--------------------------
Liquidation Losses for the period from the Cut-Off Date through the end of the
Collection Period preceding the month of such Distribution Date.
Current Realized Loss Ratio: As to any Distribution Date, the annualized
---------------------------
percentage equivalent of the fraction, the numerator of which is the sum of the
Aggregate Net Liquidation Losses for the three preceding Collection 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: The close of business on February 28, 1998.
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Cut-Off Date Pool Principal Balance: $895,440,092.56.
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Deficiency: With respect to any Contract that is a Liquidated Contract,
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the amount by which (i) the outstanding principal balance of such Contract, plus
accrued and unpaid interest thereon at the related Contract Rate to the Due Date
for such Contract in the Collection Period in which such Contract became a
Liquidated Contract exceeds (ii) the Net Liquidation Proceeds for such Contract.
Deficiency Amount: With respect to any Contract, the amount, if any, that
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the Servicer collects directly from the Obligor with respect to any Deficiency.
Deficiency Percentage: 30%
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Definitive Certificates: As defined in Section 6.08.
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Denomination: With respect to each Regular Certificate, the amount set
------------
forth on the face thereof as the "Initial Principal Balance of this
Certificate." With respect to each Class R Certificate, the Percentage Interest
appearing on the face thereof.
Depository: The initial Depository shall be the Depository Trust Company,
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the nominee of which is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to
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Section 17A of the Securities Exchange Act of 1934, as amended. The Depository
shall initially be the registered Holder of the Global Certificates. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
Depository Agreement: The agreement among the Contract Sellers, the
--------------------
Trustee and the initial Depository, dated as of the Closing Date, substantially
in the form of Exhibit I.
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Depository Participant: A broker, dealer, bank or other financial
----------------------
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the third
------------------
Business Day prior to such Distribution Date.
Disqualified Organization: Any organization defined as a "disqualified
-------------------------
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the FHLMC, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated by the Trustee based upon an Opinion of Counsel
that the holding of an Ownership Interest in a Class R Certificate by such
Person may cause the Trust Fund, or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Certificate to such Person. The
terms "United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Date: The 10th day of each calendar month after the initial
-----------------
issuance of the Certificates, or if such 10th day is not a Business Day, the
next succeeding Business Day, commencing April 10, 1998.
Due Date: The day of the month on which each scheduled payment of
--------
principal and interest is due on a Contract, exclusive of any days of grace.
Eligible Account: An account that is one of the following (i) an account
----------------
maintained with a FDIC-insured depository institution which is subject to
examination by federal or state authorities and the commercial paper of which
has a rating of P-1 from Moody's (if rated by Moody's) and F-1 from Fitch (if
rated by Fitch) or the long-term deposits or long-term unsecured senior debt
obligations of which are in one of the two highest rating categories of Moody's
and Fitch (if rated by Fitch), or maintained with a depository institution that
is otherwise acceptable to each Rating Agency (as evidenced by a letter from
each Rating Agency to such effect), (ii) a trust account
-9-
maintained with the Trustee or, if the Certificate Administrator is not the
Trustee, with the Certificate Administrator, in which the funds are either held
uninvested or invested solely in Eligible Investments, or (iii) an account that
is otherwise acceptable to the Rating Agencies, as evidenced by a letter from
each Rating Agency, without a reduction or withdrawal of the rating of the
Certificates.
Eligible Investments: One or more of the following in the order of
--------------------
priority specified herein:
(a) any common trust fund, collective investment trust or money market
fund acceptable to Fitch and rated Aaa by Moody's; and
(b) other obligations or securities that are acceptable to each Rating
Agency as an Eligible Investment hereunder and will not result in a reduction in
or withdrawal of the then current rating or ratings of the Certificates, as
evidenced by a letter to such effect from each Rating Agency;
provided, however, that no investments in "interest only" stripped obligations
shall qualify as an Eligible Investment pursuant to this definition.
Eligible Substitute Contract: As to any Replaced Contract for which such
----------------------------
Eligible Substitute Contract is being substituted pursuant to Section 3.05(b), a
Contract that (a) as of the date of its substitution, satisfies all of the
representations and warranties (which, except when expressly stated to be as of
origination, shall be deemed to be determined as of the date of its substitution
rather than as of the Cut-Off Date or the Closing Date) in Section 3.02 and does
not cause any of the representations and warranties in Section 3.03, after
giving effect to such substitution, to be incorrect, (b) after giving effect to
the scheduled payment due in the month of such substitution, has a Scheduled
Principal Balance that is not greater than the Scheduled Principal Balance of
such Replaced Contract, (c) has a Contract Rate that is at least equal to the
Contract Rate of such Replaced Contract, (d) has a remaining term to scheduled
maturity that is not greater than the remaining term to scheduled maturity of
the Replaced Contract, and (e) has not been delinquent for more than 31 days as
to any scheduled payment due within twelve months of the date of its
substitution. In addition, a Substitute Contract which is a Land Home Contract
may only be used to replace a Replaced Contract which was a Land Home Contract.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
ERISA Restricted Certificate: Any Class M, Class B-1, Class B-2 or Class R
----------------------------
Certificate.
Event Of Default: Any one of the Events of Default described in Section
----------------
8.01 hereof.
Excess Contract Payment: With respect to any Contract, any portion of a
-----------------------
payment of principal and interest on such Contract, that (a) is in excess of the
scheduled payment (or is an integral multiple thereof and has not been
identified by the Obligor as a Principal Prepayment), (b) is not a Principal
Prepayment and (c) is not part of the Liquidation Proceeds of such Contract or
the Repurchase Price of such Contract paid pursuant to Section 3.05.
Extension Fee: Any extension fee paid by the Obligor on a Contract.
-------------
-10-
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
----
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
-----
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant
-------------
to Section 4.10.
First Distribution Date: April 10, 1998.
-----------------------
Fitch: Fitch IBCA, Inc.
-----
FNMA: The Federal National Mortgage Association, a federally chartered and
----
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor thereto.
Formula Principal Distribution Amount: As to any Distribution Date, an
-------------------------------------
amount equal to the sum of (a) the Total Regular Principal Amount for such
Distribution Date and (b) any previously undistributed shortfalls in the
distribution of the Total Regular Principal Amount in respect of prior
Distribution Dates.
Fractional Interest: As to any Certificate, the product of (a) the
-------------------
Percentage Interest evidenced by such Certificate multiplied by (b) the amount
derived from dividing the Certificate Balance of the Class represented by such
Certificate by the aggregate Certificate Balances of each Class.
Global Certificate: Any Certificate registered in the name of the
------------------
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository and as described in Section 6.06). On the Closing Date, only
the Class A, Class M and Class B-1 Certificates will be Global Certificates.
Hazard Insurance Policy: With respect to each Contract, the policy of fire
-----------------------
and extended coverage insurance (and federal flood insurance, if applicable)
required to be maintained for the related Manufactured Home, as provided in
Section 4.09 (which may be a blanket insurance policy maintained by the Servicer
in accordance with the terms and conditions of Section 4.09).
Independent Contractor: Either (i) any Person (other than the Servicer or
----------------------
the Trustee) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were
a real estate investment trust (except that the ownership test set forth in that
Section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates, or such other
interest in any Class of Certificates as is set forth in an Opinion of Counsel,
which shall be at no expense to the Trustee or the Trust Fund, delivered to the
Trustee), so long as the Trust Fund does not receive or derive any income from
such person and provided that the relationship between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer and the Trustee)
upon receipt by the Trustee of an Opinion of Counsel, which shall be at no
expense to the Trustee or the Trust Fund, to the effect that the taking of any
action in respect of any REO Property by such Person,
-11-
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).
Initial Class A Certificate Balance: $734,260,000.
-----------------------------------
Initial Class M Certificate Balance: $67,158,000.
-----------------------------------
Initial Class B-1 Certificate Balance: $53,727,000.
-------------------------------------
Initial Class B-2 Certificate Balance: $40,295,092.56.
-------------------------------------
Interest Accrual Period: With respect to any Distribution Date and each
-----------------------
Class of Regular Certificates, the one month period beginning on the tenth day
of the month of the month preceding the month in which such Distribution Date
occurs and ending on the ninth day of the month in which such Distribution Date.
Land Home Contract: A Contract that is secured by a mortgage or deed of
------------------
trust on real estate on which the related Manufactured Home is situated (as well
as by such related Manufactured Home).
Land Home Contract File: As to each Land Home Contract, (a) the original
-----------------------
copy of the Land Home Contract, (b) the original related Mortgage with evidence
of recording thereon (or, if the original Mortgage has not yet been returned by
the applicable recording office, a copy thereof, certified by such recording
office, which will be replaced by the original Mortgage when it is so returned)
and any title document for the related Manufactured Home, (c) the assignment of
the Land Home Contract from the originator (if other than a Contract Seller) to
the applicable Contract Seller, (d) if such Land Home Contract was originated by
a Contract Seller, an endorsement of such Land Home Contract by the applicable
Contract Seller, and (e) any extension, modification or waiver agreement(s).
Late Payment Fees: Any late payment fees paid by Obligors on Contracts
-----------------
after all sums received have been allocated first to regular installments due or
overdue and all such installments are then paid in full.
Latest Due Date: The latest date on which any Contract matures.
---------------
Liquidated Contract: Any defaulted Contract as to which the Servicer has
-------------------
determined that all amounts (other than amounts in respect of any Deficiency)
which it expects to recover from or on account of such Contract have been
recovered; provided that any defaulted Contract in respect of which the related
--------
Manufactured Home and, in the case of Land Home Contracts, Mortgaged Property,
has been realized upon and liquidated and the proceeds of such disposition have
been received shall be deemed to be a Liquidated Contract.
Liquidation Expenses: All reasonable out-of-pocket expenses (exclusive of
--------------------
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any defaulted Contract, on or prior to the date on which the
related Manufactured Home, and, in the case of Land Home Contracts, Mortgaged
Property, is liquidated, including legal fees and expenses, any
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unreimbursed amount expended by the Servicer pursuant to Sections 4.06, 4.07,
4.09 or 4.13 (to the extent such amount is reimbursable under the terms of
Sections 4.06, 4.07, 4.09 or 4.13, as the case may be) with respect to such
Contract, and any unreimbursed expenditures for property taxes or other taxes or
charges or for property restoration or preservation that are related to such
liquidation.
Liquidation Proceeds: Cash (including insurance proceeds other than those
--------------------
applied to the restoration of the related Manufactured Home or Mortgaged
Property or released to the related Obligor in accordance with the normal
servicing procedures of the Servicer but excluding Deficiency Amounts) received
in connection with the liquidation of defaulted Contracts, whether through
repossession or otherwise.
Loan-To-Value Ratio: The fraction, expressed as a percentage, the
-------------------
numerator of which is the original principal balance of the related Contract and
the denominator of which is the Original Value of the related Manufactured Home.
Majority In Interest: As to any Class of Regular Certificates, the Holders
--------------------
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Manufactured Home: A unit of manufactured housing which meets the
-----------------
requirements of Section 25(e)(10) of the Code, securing the indebtedness of the
Obligor under the related Contract.
Minimum Termination Amount: As of any time after the Pool Scheduled
--------------------------
Principal Balance is less than 10% of the Cut-Off Date Pool Principal Balance,
whether in the case of a Termination Auction or a purchase of Contracts by the
Servicer pursuant to Section 10.01(a)(ii) hereof, an amount equal to the sum of
(a) the Class A Certificate Balance, (b) any shortfall in interest due to the
Class A Certificateholders in respect of prior Distribution Dates, (c) one
month's interest on the Class A Certificate Balance at the Class A Pass-Through
Rate, (d) the Class M Certificate Balance, (e) any shortfall in interest due to
the Class M Certificateholders in respect of prior Distribution Dates, (f) one
month's interest on the Class M Certificate Balance at the Class M Pass-Through
Rate, (g) the Class B-1 Certificate Balance, (h) any shortfall in interest due
to the Class B-1 Certificateholders in respect of prior Distribution Dates, (i)
one month's interest on the Class B-1 Certificate Balance at the Class B-1 Pass-
Through Rate, (j) the Class B-2 Certificate Balance, (k) any shortfall in
interest due to the Class B-2 Certificateholders in respect of prior
Distribution Dates, and (l) one month's interest on the Class B-2 Certificate
Balance at the Class B-2 Pass-Through Rate.
Monthly Advance: As to any Distribution Date, the lesser of (1) (a) the
---------------
amount, if any, by which (i) the Scheduled Amount exceeds (ii) the Collected
Scheduled Payments, less (b) the amount of any scheduled payment on a Contract
due during the related Collection Period which the Servicer has determined would
be a Nonrecoverable Advance if an advance in respect of such scheduled payment
were made and (2) the amount by which the Available Distribution Amount
(exclusive of the Monthly Advance component thereof) for such Distribution Date
is less than the sum of (a) the Total Regular Principal Amount and (b) the sum
of the Class A Interest Distribution Amount, the Class M Interest Distribution
Amount, the Class B-1 Interest Distribution Amount and the Class B-2 Interest
Distribution Amount.
-13-
Monthly Advance Reimbursement Amount: Any amount received or deemed to be
------------------------------------
received by the Servicer pursuant to Section 5.01(b) or (c) in reimbursement of
a Monthly Advance made out of its own funds.
Monthly Report: The monthly report described in Section 5.04.
--------------
Monthly Servicing Fee: As of any Distribution Date, an amount equal to
---------------------
one-twelfth of 1.00% per annum (or, in the case of a successor Servicer engaged
at any time after BAFSB is no longer the Servicer, the percentage agreed upon
pursuant to Section 7.07) of the Pool Scheduled Principal Balance for such
Distribution Date.
Moody's: Xxxxx'x Investors Service, Inc.
-------
Mortgage: The mortgage, deed of trust, security deed or similar evidence
--------
of lien, creating a first lien on an estate in fee simple in the real property
securing a Land Home Contract.
Mortgaged Property: The property subject to the lien of a Mortgage.
------------------
Net Contract Rate: The rate of interest per annum borne by a Contract
-----------------
minus the Annual Servicing Rate.
Net Liquidation Proceeds: As to any Liquidated Contract, Liquidation
------------------------
Proceeds net of the sum of (i) Liquidation Expenses, (ii) all accrued and unpaid
interest thereon through the date the related Contract becomes a Liquidated
Contract and (iii) any amount required to be paid to the Obligor or any other
Person with an interest in the Manufactured Home or Mortgaged Property that is
senior to the interest of the Trust Fund.
Net Weighted Average Contract Rate: As to any Distribution Date, the
----------------------------------
weighted average (weighted by outstanding principal balance) of the Net Contract
Rates of all of the Contracts at the beginning of the related Collection Period.
Non-United States Person: Any Person other than a United States Person.
------------------------
Nonrecoverable Advance: Any advance made or proposed to be made pursuant
----------------------
to Section 5.01 which the Servicer believes, in its good faith judgment, is not,
or if made would not be, ultimately recoverable from late payments, Liquidation
Proceeds or otherwise. In determining whether an advance is or will be
nonrecoverable, the Servicer need not take into account that it might receive
any amounts in a deficiency judgment. The determination by the Servicer that
any advance is, or if made would constitute, a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate of the Servicer delivered to the Trustee
and stating the reasons for such determination.
Obligor: Each Person who is indebted under a Contract or who has acquired
-------
a Manufactured Home subject to a Contract.
Officer's Certificate: A certificate (i) signed by the Chairman of the
---------------------
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of a Contract Seller or the
Servicer (or any other officer customarily performing functions similar to
-14-
those performed by any of the above designated officers and also to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with a particular subject) or (ii) if
provided for in this Agreement, signed by a Servicing Officer and delivered to a
Contract Seller and the Trustee, as the case may be, as required by this
Agreement.
Opinion Of Counsel: A written opinion of counsel, who may be the in-house
------------------
counsel for a Contract Seller or the Servicer, reasonably acceptable to the
Trustee and the Contract Sellers, as the case may be.
Original Value: With respect to any Manufactured Home that was new at the
--------------
time the related Contract was originated, the retail stated cash sale price of
such Manufactured Home, plus taxes and, to the extent financed under such
Contract, closing fees paid to third parties, insurance and prepaid finance
charges. With respect to any Manufactured Home that was used at the time the
related Contract was originated, the total delivered sales price of such
Manufactured Home, plus taxes and, to the extent financed under such Contract,
closing fees paid to third parties, insurance and prepaid finance charges.
Outstanding: With respect to any Contract as to the time of reference
-----------
thereto, a Contract that has not been fully prepaid, has not become a Liquidated
Contract, and has not been repurchased pursuant to Section 3.05 prior to such
time of reference.
Outstanding Amount Advanced: As to any Distribution Date, the aggregate of
---------------------------
all Monthly Advances made by the Servicer out of its own funds pursuant to
Section 5.01 less the aggregate of all Monthly Advance Reimbursement Amounts
actually received by the Servicer prior to such Distribution Date.
Ownership Interest: Any legal or beneficial, direct or indirect, ownership
------------------
or other interest.
Partial Prepayment: Any Principal Prepayment other than a Principal
------------------
Prepayment in Full.
Paying Agent: Any paying agent appointed pursuant to Section 9.13.
------------
Percentage Interest: As to any Certificate (other than a Class R
-------------------
Certificate) of any Class, the percentage interest evidenced thereby in
distributions required to be made on the Certificates of such Class, such
percentage interest being equal to the percentage obtained by dividing the
original denomination of such Certificate by the aggregate of the original
denominations of all of the Certificates of such Class; and as to a Class R
Certificate, the percentage set forth on the face thereof.
Permitted Transferee: Any Person other than (i) a Disqualified
--------------------
Organization or (ii) a Non-United States Person.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Pool Factor: As of any Distribution Date and as to any Class of
-----------
Certificates, the percentage obtained by dividing the Class A Certificate
Balance, the Class M Certificate Balance,
-15-
the Class B-1 Certificate Balance or the Class B-2 Certificate Balance, as the
case may be (after giving effect to the principal distributions on such
Distribution Date), by the Initial Class A Certificate Balance, the Initial
Class M Certificate Balance, the Initial Class B-1 Certificate Balance or the
Initial Class B-2 Certificate Balance, as the case may be, carried out to seven
decimal places.
Pool Scheduled Principal Balance: As to any Distribution Date, the Cut-Off
--------------------------------
Date Pool Principal Balance less the aggregate of the Total Regular Principal
Amounts for all prior Distribution Dates.
Principal Prepayment: (i) Subject to clause (ii) of this definition, with
--------------------
respect to any Contract, any payment or any portion thereof or other recovery on
such Contract (other than a Liquidated Contract or a Contract repurchased
pursuant to Section 3.05) that exceeds the amount necessary to bring such
Contract current as of any Due Date unless (A) the related Obligor has notified
or confirmed with the Servicer that such payment is to be applied as Scheduled
Payments for future Due Dates or (B) the amount of such excess payment is
approximately equal (subject to a variance of plus or minus 10%) to the amount
of the Scheduled Payment on the next Due Date; (ii) notwithstanding the
provisions of the preceding clause (i), if any payment or any portion thereof or
other recovery on a Contract (other than a Liquidated Contract or a Contract
repurchased pursuant to Section 3.05) is sufficient to pay the outstanding
principal balance of such Contract, all accrued and unpaid interest at the
Contract Rate to the payment date and, at the option of the Servicer, all other
outstanding amounts owing on such Contract, the portion of the payments or
recoveries on such Contract during such Collection Period that is equal to the
Scheduled Principal Balance of such Contract after giving effect to the
scheduled payment on such Contract due in such Collection Period; and (iii) any
cash deposit made with respect to a Contract pursuant to Section 3.05.
Principal Prepayment In Full: Any Principal Prepayment specified in clause
----------------------------
(ii) of the definition of the term "Principal Prepayment."
Private Certificate: Any Class B-2 or Class R Certificate.
-------------------
Rating Agency: Either Xxxxx'x Investors Service, Inc. or Fitch IBCA, Inc.
-------------
Record Date: With respect to any Distribution Date, the close of business
-----------
on the Business Day preceding such Distribution Date.
Regular Certificates: Any one of the Class A, Class M, Class B-1 or Class
--------------------
B-2 Certificates.
REMIC: A "real estate mortgage investment conduit" within the meaning of
-----
Section 860D of the Code.
REMIC Administrator: BAFSB, or any successor thereto meeting the
-------------------
requirements set forth in Section 4.17 (c).
REMIC Provisions: Provisions of the federal income tax law relating to
----------------
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and
-16-
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time as well as provisions of applicable
state laws.
REO Account: As defined in Section 4.17.
-----------
REO Property: As defined in Section 4.17.
------------
Replaced Contract: A Contract as to which a Contract Seller has a
-----------------
Repurchase Obligation and which, at such Contract Seller's option, is replaced
in the Trust Fund by an Eligible Substitute Contract pursuant to Section 3.05.
Repossession Profits: As to any Distribution Date, the excess, if any, of
--------------------
Net Liquidation Proceeds in respect of each Contract that became a Liquidated
Contract during the related Collection Period over the sum of the remaining
principal balance of such Contract plus accrued and unpaid interest at the
related Contract Rate on the remaining principal balance thereof from the Due
Date to which interest was last paid by the Obligor to the Due Date in the month
in which such Contract became a Liquidated Contract.
Repurchase Obligation: The obligation of a Contract Seller, set forth in
---------------------
Section 3.05, to repurchase the related Contracts as to which there exists an
uncured breach of a representation or warranty contained in Sections 3.02 or
3.03.
Repurchase Price: With respect to any Contract required to be repurchased
----------------
hereunder, an amount equal to the remaining principal amount outstanding on such
Contract as of the beginning of the month of repurchase plus accrued interest
from the Due Date with respect to which the Obligor last made a payment to the
Due Date in the Collection Period in which such Contract is repurchased.
Reserve Account: The separate Eligible Account created and initially
---------------
maintained by the Trustee pursuant to Section 5.08 in the name of the Trustee
for the benefit of the Holders of the Certificates and designated "[Trustee] in
trust for registered holders of BankAmerica Manufactured Housing Contract Trust
IV, Senior/Subordinate Pass-Through Certificates, Series 1998-1". Funds in the
Reserve Account shall be held in trust for the aforementioned Certificateholders
for the uses and purposes set forth in this Agreement.
Reserve Account Cap: As to any Distribution Date (after giving effect to
-------------------
distributions due thereon) after the Closing Date and (i) until none of the
Class A, Class M and Class B-1 Certificates remain outstanding, the Reserve
Account Cap shall be the greater of $8,954,401 (which is 1.0% of the Cut-Off
Date Pool Principal Balance) or, if a Reserve Account Trigger has occurred,
$17,908,802 (which is 2.0% of the Cut-Off Date Pool Principal Balance) and (ii)
as to any Distribution Date (after giving effect to distributions due thereon)
after none of the Class A, Class M and Class B-1 Certificates remain
outstanding, the Reserve Account Cap shall be the lesser of the then outstanding
Class B-2 Certificate Balance and the amount calculated pursuant to clause (i).
Reserve Account Draw Amount: An amount which is equal to the lesser of (a)
---------------------------
the amount then on deposit in the Reserve Account and (b) the amount, if any, by
which the
-17-
aggregate of amounts due to Certificateholders in clauses (i) through (viii) of
Section 5.02(a) exceeds the Available Distribution Amount on such Distribution
Date.
Reserve Account Trigger: As of any Distribution Date, a Reserve Account
-----------------------
Trigger will be in effect if any of the following conditions are in effect as of
such Distribution Date or were in effect for any of the immediately preceding
eleven Distribution Dates:
(1) the Cumulative Realized Losses as of such Distribution Date exceed
(a) if such Distribution Date is from and including April 1998 and up to
and including September 1998, 0.50% of the Cut-Off Date Pool Principal
Balance, (b) if such Distribution Date is from and including October 1998
and up to and including March 1999, 1.00% of the Cut-Off Date Pool
Principal Balance, (c) if such Distribution Date is from and including
April 1999 and up to and including October 1999, 1.50% of the Cut-Off Date
Pool Principal Balance, (d) if such Distribution Date is from and including
September 1999 and up to and including March 2000, 2.25% of the Cut-Off
Date Pool Principal Balance, (e) if such Distribution Date is from and
including April 2000 and up to and including September 2000, 3.00% of the
Cut-Off Date Pool Principal Balance, (f) if such Distribution Date is from
and including October 2000 and up to and including March 2001, 4.00% of the
Cut-Off Date Pool Principal Balance, (g) if such Distribution Date is from
and including April 2001 and up to and including September 2001, 5.00% of
the Cut-Off Date Pool Principal Balance, (h) if such Distribution Date is
from and including October 2001 and up to and including March 2003, 6.00%
of the Cut-Off Date Pool Principal Balance, (i) if such Distribution Date
is from and including April 2003 and up to and including March 2004, 7.00%
of the Cut-Off Date Pool Principal Balance, (j) if such Distribution Date
is from and including April 2004 and up to and including March 2005, 8.50%
of the Cut-Off Date Pool Principal Balance, (k) if such Distribution Date
is in or after April 2005, 9.5% of the Cut-Off Date Pool Principal Balance;
(2) the Current Realized Loss Ratio as of such Distribution Date
exceeds 2.5%;
(3) the Average Sixty-Day Delinquency Ratio as of such Distribution
Date exceeds 3.5%; or
(4) the Average Thirty-Day Delinquency Ratio as of such Distribution
Date exceeds 5.5%.
Responsible Officer: When used with respect to the Trustee, the Paying
-------------------
Agent or the Certificate Administrator, the chairman or vice chairman of the
board of directors, the chairman or vice chairman of any executive committee of
the board of directors, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller, or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
-18-
Scheduled Amount: As to any Distribution Date, the amount equal to the
----------------
aggregate of the scheduled payments that were due during the Collection Period
ending immediately prior to such Distribution Date in respect of Contracts that
were Outstanding immediately following such Collection Period or whose last
scheduled payment was due during such Collection Period.
Scheduled Payment: As to any Distribution Date and each Contract, the
-----------------
amount equal to the scheduled payment that was due during the Collection Period
ending immediately prior to such Distribution Date in respect of each such
Contract that was Outstanding immediately following such Collection Period or
whose last scheduled payment was due during such Collection Period.
Scheduled Principal Balance: As to any Contract and any Distribution Date,
---------------------------
the principal balance of such Contract (before any adjustment by reason of
bankruptcy, moratorium or similar waiver or grace period) as of the Due Date in
the Collection Period next preceding such Distribution Date (or, with respect to
the First Distribution Date, as of the Cut-Off Date) as specified in the
amortization schedule for such Contract at the time relating thereto, after
giving effect to all previous Partial Prepayments, all previous scheduled
principal payments (whether or not paid) and to the scheduled payment of
principal due on such Due Date.
Scheduled Principal Reduction Amount: As to any Distribution Date, (a) the
------------------------------------
sum of the scheduled payments due during the Collection Period ending
immediately prior to such Distribution Date in respect of all Contracts that are
Outstanding at the beginning of such Collection Period less (b) 1/12th of the
product of (i) the Pool Scheduled Principal Balance prior to giving effect to
the Total Regular Principal Amount for such Distribution Date, and (ii) the
weighted average Contract Rate for such Contracts, calculated on the basis of
the remaining principal balances of such Contracts as of the first day of such
Collection Period; provided that, on each anniversary of the First Distribution
--------
Date (or, at the option of the Servicer, on more than one Distribution Date, as
selected by the Servicer, in each year), the Scheduled Principal Reduction
Amount shall equal the amount, reflecting any adjustments by reason of
bankruptcy, moratorium or similar waiver or grace period, Principal Payments in
Full, and other reductions, if any, necessary to cause the Pool Scheduled
Principal Balance for the Distribution Date next succeeding such Distribution
Date to equal the aggregate of the Scheduled Principal Balances for such
Distribution Date.
Securities Act: The Securities Act of 1933, as amended.
--------------
Servicer: BAFSB, or its successors in interest or any successor servicer
--------
under this Agreement as provided by Section 7.06 or Section 7.07.
Servicer Deficiency Amount: With respect to any Distribution Date, the
--------------------------
product of the Deficiency Percentage and the aggregate of the Deficiency Amounts
received during the immediately preceding Collection Period.
Servicing File: All documents, records, and other items maintained by the
--------------
Servicer with respect to a Contract and not included in the corresponding
Contract File or the Land Home Contract, as applicable, including the credit
application, credit reports and verifications, appraisals, tax and insurance
records, payment records, insurance claim records, correspondence, and all
historical computerized data files.
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Servicing Officer: Any officer of the Servicer involved in, or responsible
-----------------
for, the administration and servicing of the Contracts whose name appears on a
list of servicing officers furnished to the Trustee by the Servicer, as such
list may from time to time be amended.
Sixty-Day Delinquency Ratio: As to any Distribution Date, the percentage
---------------------------
equivalent of the fraction, the numerator of which is the aggregate of the
outstanding principal balances (as of the end of the preceding Collection
Period) of all Contracts (including Contracts in respect of which the related
Manufactured Home has been repossessed but not yet liquidated) as to which a
scheduled monthly payment thereon (without giving effect to any adjustments
thereto by reason of a bankruptcy or similar proceeding of the Obligor or any
extension or modification granted to such Obligor) is delinquent 60 days or more
as of the end of such Collection Period and the denominator of which is the Pool
Scheduled Principal Balance for such Distribution Date.
Startup Day: As defined in Section 4.17(b) hereof.
-----------
Tax: As defined in Section 4.17(g) hereof.
---
Tax Matters Person: The person designated as "tax matters person" in the
------------------
manner provided under Treasury regulation Section 1.860F-4(d) and Section 6231
of the Code. Initially, this person shall be the Servicer.
Termination Auction: As defined in Section 10.01(b) hereof.
-------------------
Thirty-Day Delinquency Ratio: As to any Distribution Date, the percentage
----------------------------
equivalent of the fraction, the numerator of which is the aggregate of the
outstanding principal balances (as of the end of the preceding Collection
Period) of all Contracts (including Contracts in respect of which the related
Manufactured Home has been repossessed but not yet liquidated) as to which a
scheduled monthly payment thereon (without giving effect to any adjustments
thereto by reason of a bankruptcy or similar proceeding of the Obligor or any
extension or modification granted to such Obligor) is delinquent 30 days or more
as of the end of such Collection Period and the denominator of which is the Pool
Scheduled Principal Balance for such Distribution Date.
Total Regular Principal Amount: As to any Distribution Date, an amount
------------------------------
equal to the sum of (a) the Scheduled Principal Reduction Amount for such
Distribution Date, (b) all Partial Prepayments received during the immediately
preceding Collection Period, (c) the Scheduled Principal Balance of each
Contract for which a Principal Prepayment in Full was received during the
immediately preceding Collection Period, (d) the Scheduled Principal Balance of
each Contract that became a Liquidated Contract during the immediately preceding
Collection Period, and (e) the Scheduled Principal Balance of each Contract that
was repurchased during the immediately preceding Collection Period pursuant to
Section 3.05.
Transfer: Any direct or indirect transfer or sale of any Ownership
--------
Interest in a Class R Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
----------
in a Class R Certificate.
Trustee: The First National Bank of Chicago, or its successors or assigns
-------
or any successor under this Agreement.
-20-
Trust Fund: The corpus of the trust created by this Agreement, to the
----------
extent described herein, consisting of the Contracts (including the security
interest created thereby), including all rights to receive payments on the
Contracts due on or after the Cut-Off Date, such assets as shall from time to
time be identified as deposited in the Certificate Account, the amounts, if any,
on deposit in the Reserve Account, each Manufactured Home and Mortgaged Property
which secured a Contract (which has not been repurchased pursuant to Section
3.05) and which has been acquired in realizing upon such Contract, the
Repurchase Obligation, and the proceeds of the Hazard Insurance Policies.
UCC: The Uniform Commercial Code, as in effect in the relevant
---
jurisdiction.
United States Person: A citizen or resident of the United States, a
--------------------
corporation, partnership or other entity created or organized in, or under the
laws of, the United States, any state thereof or the District of Columbia (other
than a partnership not treated as a United States person under any applicable
Treasury Regulations), or an estate or trust whose income is subject to United
States federal income tax regardless of the source of income.
Voting Rights: The portion of the voting rights of all of the Certificates
-------------
that is allocated to any Certificate. As of any date of determination, 99% of
the Voting Rights shall be allocated among Holders of the Regular Certificates
and 1% of the Voting Rights shall be allocated among Holders of the Class R
Certificates, in each case allocated among the Certificates of each such Class
in accordance with their respective Percentage Interests.
Section 1.02 Construction.
------------
Unless the context of this Agreement otherwise clearly requires, references
to the plural include the singular, the singular the plural and the part the
whole and "or" has the inclusive meaning sometimes represented by the phrase
"and/or." The words "include" or "including" shall be deemed followed by the
phrase "without limitation." The words "hereof," "herein," "hereunder" and
similar terms in this Agreement refer to the Agreement as a whole and not to any
particular provision of this Agreement. The Section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection, Schedule, Appendix and Exhibit
references are to this Agreement unless otherwise specified. The date as of
which this Agreement is dated has been assigned solely for purposes of
identification, and does not signify the date as of which assets are
transferred, securities are issued, or any other actions are taken hereunder,
and the parties specifically acknowledge and agree that the conveyance of the
Contracts pursuant to Section 2.01 and the delivery of the Certificates pursuant
to Section 2.07 have occurred on and are effective as of the Closing Date.
-21-
ARTICLE II
CONVEYANCE OF CONTRACTS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Contracts.
(a) BAFSB, as a Contract Seller, concurrently with the execution and
delivery hereof, does hereby transfer, sell, assign, set over and otherwise
convey to the Trustee without recourse (i) all of the right, title and interest
of such Co ntract Seller in and to the Contracts listed in Exhibit A-1 of the
Contract Schedule, as amended from time to time, (including the security
interests created thereby), including all principal of and interest due on or
with respect to such Contracts on or after the Cut-Off Date (other than payments
of principal and interest due on such Contracts before the Cut-Off Date), (ii)
all of the rights under all Hazard Insurance Policies relating to the
Manufactured Homes securing such Contracts for the benefit of the creditors
under such Contracts, (iii) all documents contained in the Contract Files and in
the Land Home Contract Files with respect to the related Contracts, and (iv) all
proceeds of any of the foregoing. Bank of America, as a Contract Seller,
concurrently with the execution and delivery hereof, does hereby transfer, sell,
assign, set over and otherwise convey to the Trustee without recourse (i) all of
the right, title and interest of such Contract Seller in and to the Contracts
listed in Exhibit A-2 of the Contract Schedule, as amended from time to time,
(including the security interests created thereby), including all principal of
and interest due on or with respect to such Contracts on or after the Cut-Off
Date (other than payments of principal and interest due on such Contracts before
the Cut-Off Date), (ii) all of the rights under all Hazard Insurance Policies
relating to the Manufactured Homes securing such Contracts for the benefit of
the creditors under such Contracts, (iii) all documents contained in the
Contract Files and in the Land Home Contract Files with respect to the related
Contracts, and (iv) all proceeds of any of the foregoing.
The ownership of each Contract and the contents of the related Contract
File or Land Home Contract File, as applicable, and Servicing File are vested in
the Trustee. The Servicer hereby disclaims any and all right, title and other
ownership interest in and to the Contracts (including the security interests
created thereby). The contents of each Contract File and, except as provided in
Section 4.16(e), the contents of each Land Home Contract File, as applicable,
and Servicing File are and shall be held by the Servicer for the benefit of the
Trustee as the owner thereof (it being understood that the Servicer's possession
of the contents of each Contract File or Land Home Contract File, as applicable,
and Servicing File so retained is for the sole purpose of servicing the related
Contract, and such retention and possession by the Servicer is in a custodial
capacity only). Neither of the Contract Sellers nor the Servicer shall take any
action inconsistent with the Trustee's ownership of the Contracts, and the
Contract Sellers and the Servicer shall promptly indicate to all inquiring
parties that the Contracts have been sold, transferred, assigned, set over and
conveyed to the Trustee and shall not claim any ownership interest in the
Contracts.
(b) Although the parties intend that the conveyance of the Contract
Sellers' right, title and interest in and to the Contracts pursuant to this
Agreement shall constitute a purchase and sale and not a loan, if such
conveyances are deemed to be a loan, the parties intend that the rights and
obligations of the parties to such loan shall be established pursuant to the
terms of this Agreement. The parties also intend and agree that BAFSB shall be
deemed to have granted to the Trustee, and BAFSB does hereby grant to the
Trustee, a perfected first-priority security interest in (i) all of its right,
title and interest, whether now owned or hereafter acquired, in and to the
Contracts listed in Exhibit A-1 of the Contract Schedule, as amended from time
to time (including the security interests created thereby), including all
principal of and interest due on or with respect to such Contracts on or after
the Cut-Off Date (other than payments of principal and interest due on such
Contracts before the Cut-Off Date), (ii) all of the rights under all Hazard
Insurance Policies relating to the Manufactured Homes securing such Contracts
for the benefit of the creditors under such Contracts, (iii) all documents
contained in the Contract Files and in the Land Home Contract Files with respect
to the related Contracts, and (iv) all proceeds of any of the foregoing. The
parties also intend and agree that Bank of America shall be deemed to have
granted to the Trustee, and Bank of America does hereby grant to the Trustee, a
perfected first-priority security interest in (i) all of its right, title and
interest, whether now owned or hereafter acquired, in and to the
-22-
Contracts listed in Exhibit A-2 of the Contract Schedule, as amended from time
to time (including the security interests created thereby), including all
principal of and interest due on or with respect to such Contracts on or after
the Cut-Off Date (other than payments of principal and interest due on such
Contracts before the Cut-Off Date), (ii) all of the rights under all Hazard
Insurance Policies relating to the Manufactured Homes securing such Contracts
for the benefit of the creditors under such Contracts, (iii) all documents
contained in the Contract Files and in the Land Home Contract Files with respect
to the related Contracts, and (iv) all proceeds of any of the foregoing. The
parties intend and agree that this Agreement shall constitute a security
agreement under applicable law. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person under any
Certificates, the security interests created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
Section 2.02 Filing and Assignment; Name Change or Relocation.
(a) On or prior to the Closing Date, the Servicer shall cause to be
filed in the office of the Secretary of State of California:
(i) For any Contracts sold by BAFSB, a UCC-1 financing statement
signed by BAFSB describing the related Contracts as collateral and naming BAFSB
as debtor and the Trustee as secured party; and
(ii) For any Contracts sold by Bank of America, a UCC-1 financing
statement signed by Bank of America and describing such Contracts as collateral
and naming Bank of America as debtor and the Trustee as secured party.
From time to time, the Servicer shall take and cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Certificateholders' interests in the Contracts and their proceeds and the
Manufactured Homes and the Mortgaged Properties against all other Persons,
including the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title;
provided, however, that BAFSB, so long as it is the Servicer, shall not be
-------- -------
required to cause notations to be made on any document of title relating to any
Manufactured Home or to execute any transfer instrument relating to any
Manufactured Home (other than a notation or a transfer instrument necessary to
show the applicable Contract Seller as the lienholder or legal title holder) or,
except as provided in Section 4.22, to file documents in real property records
with respect to a Manufactured Home or related Contract, absent notice from the
Trustee or the related Contract Seller or actual knowledge that
-23-
such Manufactured Home that does not secure a Land Home Contract has become real
property under applicable state law; and further provided, that the Servicer
------- --------
shall have no obligation pursuant to this sentence with respect to any failure
to maintain a first-priority perfected security interest which results from a
breach of any representation or warranty in Section 3.02(j) or (u) as to the
Trustee's security interest in a Manufactured Home, except to enforce the
related Contract Seller's obligations in respect thereof in Section 3.05. The
Trustee and the Contract Sellers agree to take whatever action is necessary to
enable the Servicer to fulfill its obligations as set forth in this Section
2.02(a).
(b) The Servicer agrees to pay all reasonable costs and disbursements in
connection with its duties specified in this Section 2.02.
Section 2.03 Acceptance by Trustee.
---------------------
The Trustee hereby acknowledges conveyance of the Contracts to the Trustee
and declares that the Trustee, directly or through a custodian (which shall be
the Servicer pursuant to Section 4.16, except as provided under Section
4.16(e)), holds and will hold such Contract Files in trust for the use and
benefit of all present and future Certificateholders. The Trustee hereby
certifies (without any independent investigation) that it has no notice or
knowledge of (i) any adverse claim, lien or encumbrance with respect to any
Contract, (ii) any Contract being overdue or dishonored, (iii) any evidence on
the face of any Contract of any security interest therein adverse to the
Trustee's interest, or (iv) any defense against or claim against any Contract by
the Obligor or by any other party. Nothing in this Agreement shall be construed
to constitute acceptance by the Trustee or the Trust Fund of any liability or
obligation of any Contract Seller, whether on any Contract, to any Obligor, or
otherwise.
Section 2.04 Certificate Ratings.
-------------------
On the Closing Date, the Trustee shall authenticate and deliver the
Certificates upon instructions from the Contract Sellers pursuant to Section
2.07 and the following documents:
(a) A letter from each Rating Agency confirming that the Class A, Class M,
Class B-1 and Class B-2 Certificates have been assigned the rating "Aaa", "Aa3,"
"Baa2", and "Ba2", respectively (in the case of Xxxxx'x) and "AAA", "AA-", "BBB"
and "BB", respectively (in the case of Fitch), and
(b) An Officer's Certificate from the Servicer to the effect that the
Servicer has deposited in the Certificate Account $12,461,605.99, which is all
amounts received on the Contracts from and including the Cut-Off Date up to and
including March 24, 1998.
Notwithstanding anything in this Agreement to the contrary, the Servicer
shall deposit into the Certificate Account all amounts in respect of the
Contracts received on or after March 1, 1998 or otherwise required to be
deposited in the Certificate Account by other provisions of this Agreement
pursuant to Section 4.05.
Section 2.05 Representations and Warranties Regarding the Servicer.
-----------------------------------------------------
The Servicer makes the following representations and warranties to the
Trustee and the Certificateholders:
-24-
(a) Organization and Good Standing. The Servicer is a federal savings
------------------------------
bank, duly organized, validly existing and in good standing under the laws of
the United States, and the Servicer has the corporate power to own its assets
and to transact the respective business in which it is currently engaged. The
Servicer is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which its type of organization and the
character of the business transacted by it or properties owned or leased by it
requires such qualification and in which the failure so to qualify would have a
material adverse effect on its business, properties, assets, or condition
(financial or other).
(b) Authorization; Binding Obligations. The Servicer has the power and
----------------------------------
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.
(c) No Consent Required. The Servicer is not required to obtain the
-------------------
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except such as have been obtained or where the
failure to obtain any such consent, license, approval or authorization, or to
make any registration or declaration does not materially adversely affect the
interests of the Trust Fund or the interests of the Certificateholders therein.
(d) No Violations. The execution, delivery and performance of this
-------------
Agreement by the Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the Servicer or the
charter or bylaws of the Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Servicer is a
party or by which the Servicer may be bound except where such violation or
breach does not materially adversely affect the interests of the Trust Fund or
the interests of the Certificateholders therein.
(e) Litigation. No litigation or administrative proceeding of or before
----------
any court, tribunal or governmental body is currently pending, or, to the
knowledge of the Servicer, threatened, against the Servicer or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Servicer have a material
adverse effect on the transactions contemplated by this Agreement.
Within 60 days of the earlier of discovery by the Servicer or receipt of
notice by the Servicer of the breach of any representation, warranty or covenant
of the Servicer set forth in this Section 2.05 which materially and adversely
affects the interests of the Certificateholders in any Contract, the Servicer
shall cure such breach in all material respects.
-25-
Section 2.06 Covenants of the Contract Sellers, Trustee and Servicer.
-------------------------------------------------------
Upon discovery by any of the Contract Sellers, the Servicer or the Trustee
of a breach of any of the representations, warranties and covenants set forth in
Article III hereof which materially and adversely affects the value of the
Contracts or the interests of the Certificateholders in the Contracts (or which
materially and adversely affects the value of or the interest of the
Certificateholders in the related Contract in the case of a representation,
warranty or covenant set forth in Article III hereof and relating to a
particular Contract), the party discovering such breach shall give prompt
written notice to the other parties. The cure of such breach or the repurchase
or substitution for any affected Contract shall be done in accordance with
Section 3.05.
Section 2.07 Authentication and Delivery of Certificates.
-------------------------------------------
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered to or upon the order of the Contract Sellers, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.08 Covenants of the Servicer.
-------------------------
The Servicer hereby covenants to the Contract Sellers and the Trustee that
no written information, certificate of an officer, statement furnished in
writing or written report delivered to the Contract Sellers, any Affiliate of
the Contract Sellers or the Trustee and prepared by the Servicer pursuant to
this Agreement will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information, certificate, statement
or report not misleading.
-26-
ARTICLE III
REPRESENTATIONS AND WARRANTIES BY THE CONTRACT SELLERS
Section 3.01 Representations and Warranties of the Contract Sellers.
------------------------------------------------------
Each Contract Seller makes the following representations and warranties to
the Trustee (to the extent that such representations and warranties are
applicable to such Contract Seller):
(a) Organization and Good Standing; Licensing. It is a national banking
-----------------------------------------
association (in the case of Bank of America) and is a federal savings bank (in
the case of BAFSB), duly organized, validly existing and in good standing under
the laws of the United States, and it has the corporate power to own its assets
and to transact the business in which it is currently engaged. It is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which its type of organization and the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
other) of such Contract Seller. It was properly licensed in each jurisdiction at
the time of purchase or origination of each Contract originated or purchased on
an individual basis by it in such jurisdiction to the extent required by the
laws of such jurisdiction as applied to the purchase or origination and
servicing of such Contract, except where the failure to be so licensed does not
materially adversely affect the interests of the Trust Fund or the
Certificateholders in and to such Contract.
(b) Authorization; Binding Obligations. It has the power and authority to
----------------------------------
make, execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of such Contract Seller enforceable in accordance with its
terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.
(c) No Consent Required. It is not required to obtain the consent of any
-------------------
other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except such as have been obtained or where the
failure to obtain any such consent, license, approval or authorization, or to
make any registration or declaration does not materially adversely affect the
interests of the Trust Fund or the interests of the Certificateholders therein.
(d) No Violations. The execution, delivery and performance of this
-------------
Agreement by such Contract Seller will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to such
Contract Seller or the charter or bylaws of such Contract Seller, or constitute
a material breach of any mortgage, indenture, contract or other agreement to
which such Contract Seller is a party or by which such Contract Seller may be
bound except where such violation or breach does not materially adversely affect
the interests of the Trust Fund or the interests of the Certificateholders
therein.
-27-
(e) Litigation. No litigation or administrative proceeding of or before
----------
any court, tribunal or governmental body is currently pending or, to its
knowledge, threatened, against it or any of its properties or with respect to
this Agreement or the Certificates which, if adversely determined, would in the
opinion of such Contract Seller have a material adverse effect on the
transactions contemplated by this Agreement.
(f) Chief Executive Office. As of the Closing Date, its chief executive
----------------------
office is in California.
(g) Name Change or Relocation. During the term of this Agreement, it
-------------------------
will not change its name, identity or structure or relocate its chief executive
office without first giving written notice to the Trustee. If any change in such
Contract Seller's name, identity or structure or the relocation of its chief
executive office would make any financing or continuation statement or notice of
lien filed under this Agreement seriously misleading within the meaning of
applicable provisions of the UCC or any title statute, such Contract Seller, no
later than five days after the effective date of such change, shall file such
amendments as may be required to preserve and protect the Certificateholders'
interests in the Contracts and proceeds thereof and in the Manufactured Homes
and the Mortgaged Properties.
Section 3.02 Representations and Warranties Regarding Each Contract.
------------------------------------------------------
The Contracts listed in Exhibit A-1 to the Contract Schedule and in Exhibit
A-2 to the Contract Schedule have been sold by BAFSB and Bank of America,
respectively, in their capacity as Contract Seller, to the Trust Fund on the
date of execution and delivery hereof. As a condition of the purchase by the
Trust Fund, such Contract Seller represents and warrants to the Trustee as to
each Contract sold by it to the Trust Fund as of the Closing Date (except as
otherwise expressly stated):
(a) Payments. As of the Cut-Off Date, no Contract was more than 59 days
--------
delinquent.
(b) No Waivers. The terms of the Contract have not been waived, altered
----------
or modified in any respect, except by instruments or documents identified in the
Contract File or the Land Home Contract File, as applicable.
(c) Binding Obligation. The Contract is the legal, valid and binding
------------------
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
(d) No Defenses. The Contract is not subject to any right of rescission,
-----------
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
-28-
(e) Insurance. The Manufactured Home securing the Contract is covered by
---------
a Hazard Insurance Policy in the amount required by Section 4.09. All premiums
due as of the Closing Date on such insurance have been paid in full to the
applicable providers of such insurance.
(f) Origination. To the knowledge of such Contract Seller, the Contract
-----------
was either (i) originated by a manufactured housing dealer acting in the regular
course of its business, and purchased on an individual basis by BAFSB, acting
through its division, BankAmerica Housing Services or (ii) originated by BAFSB,
acting through its division, BankAmerica Housing Services, in the ordinary
course of its business.
(g) Lawful Assignment. The Contract was not originated in and is not
-----------------
subject to the laws of any jurisdiction whose laws would make the transfer of
such Contract from such Contract Seller to the Trust Fund under this Agreement
unlawful.
(h) Compliance with Law. All requirements of any federal, state or local
-------------------
law, including usury, truth-in-lending and equal credit opportunity laws and
lender licensing laws, applicable to the Contract have been complied with.
(i) Contract in Force. The Contract has not been satisfied or
-----------------
subordinated in whole or in part or rescinded, the Manufactured Home securing
the Contract has not been released from the lien of the Contract in whole or in
part and, in the case of a Land Home Contract, the related Mortgaged Property
has not been released from the related Mortgage.
(j) Valid Security Interest. The Contract, other than any Land Home
-----------------------
Contract, creates a valid, subsisting and enforceable first-priority security
interest in favor of BankAmerica Housing Services as secured lender, or agent
thereof, in the Manufactured Home covered thereby; such security interest has
been assigned by such Contract Seller as secured lender to the Trustee in
accordance with the terms herein and; the Trustee has a valid and perfected
first-priority security interest in such Manufactured Home. Each Mortgage is a
valid first lien in favor of BankAmerica Housing Services on real property
securing the amount owed by the Obligor under the related Land Home Contract
subject only to (a) the lien of current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally in the area wherein the property subject to the Mortgage is located or
specifically reflected in the appraisal obtained in connection with the
origination of the related Land Home Contract obtained by BankAmerica Housing
Services 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 such Mortgage. The applicable Contract Seller has assigned all of
its right, title and interest in such Land Home Contract and related Mortgage,
including the security interest in the Manufactured Home covered thereby, to the
Trustee. The Trustee has and will have a valid and perfected and enforceable
first priority security interest in such Land Home Contract.
(k) Capacity of Parties. All parties to the Contract had capacity to
-------------------
execute the Contract.
(l) Good Title. It purchased the Contract for value and took possession
----------
thereof, without knowledge that the Contract was subject to any security
interest. It has not sold,
-29-
assigned or pledged the Contract to any Person other than the Trust Fund, and
prior to the transfer of the Contract by such Contract Seller to the Trust Fund,
it had good and marketable title thereto free and clear of any encumbrance,
equity, loan, pledge, charge, claim or security interest and was the sole owner
thereof with full right to transfer the Contract to the Trust Fund.
(m) No Defaults. As of the Cut-Off Date, there was no default, breach,
-----------
violation or event permitting acceleration existing under the Contract and to
its knowledge, no event which, with notice and the expiration of any grace or
cure period, would constitute such a default, breach, violation or event
permitting acceleration under such Contract (except payment delinquencies
permitted by clause (a) above). Such Contract Seller has not waived any such
default, breach, violation or event permitting acceleration.
(n) No Liens. As of the Closing Date, there are, to its knowledge, no
--------
claims which have been filed for work, labor or materials affecting the
Manufactured Home or any related Mortgaged Property securing the Contract which
are or may be liens prior to, or equal or coordinate with, the lien of the
Contract.
(o) Equal Installments. The Contract has a fixed Contract Rate and
------------------
provides for level monthly payments of principal and interest which fully
amortize the loan over its term. The scheduled monthly payment allocable to
interest on the Contract is calculated on the basis that each scheduled monthly
payment is applied on its Due Date, regardless of when it is actually made.
(p) Enforceability. The Contract contains customary and enforceable
--------------
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security.
(q) Contract Schedule. The information set forth in Exhibit A-1 to the
-----------------
Contract Schedule (in the case of BAFSB) and Exhibit A-2 to the Contract
Schedule (in the case of Bank of America) is true and correct.
(r) One Original. There is only one original executed Contract. Such
------------
original Contract is in the custody of the Servicer on the Closing Date.
(s) Loan-to-Value Ratio. At the time of its origination, such Contract
-------------------
had a Loan-to-Value Ratio (rounded to the nearest 1%) not greater than 95%.
(t) Not Real Estate. With respect to each Contract other than a Land Home
---------------
Contract, the related Manufactured Home is personal property and is not
considered or classified as part of the real estate on which it is located under
the laws of the jurisdiction in which it is located and was personal property
and was not considered or classified as part of the real estate on which it was
located under the laws of the jurisdiction in which it was located at the time
the related Contract was executed by the parties thereto, and with respect to
each Contract including Land Home Contracts the related Manufactured Home is, to
such Contract Seller's knowledge, free of damage (including earthquake or
hurricane damage) and in good repair.
(u) Notation of Security Interest. With respect to each Contract other
-----------------------------
than a Land Home Contract, if the related Manufactured Home is located in a
state in which notation of a
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security interest on the title document is required or permitted to perfect such
security interest, the title document shows, or, if a new or replacement title
document with respect to such Manufactured Home is being applied for, such title
document will be issued within 180 days and will show, BankAmerica Housing
Services as the holder of a first-priority security interest in such
Manufactured Home. If the related Manufactured Home is located in a state in
which the filing of a financing statement or the making of a fixture filing
under the UCC is required to perfect a security interest in manufactured
housing, such filings have been duly made and show BankAmerica Housing Services
as the secured party. If the related Manufactured Home secures a Land Home
Contract, such Manufactured Home is subject to a Mortgage properly filed in the
appropriate public recording office or such Mortgage will be properly filed in
the appropriate public recording office within 180 days, naming BankAmerica
Housing Services as mortgagee. In either case, the Trustee has the same rights
as the secured party of record would have (if such secured party were still the
owner of the Contract) against all Persons (including the related Contract
Seller and any trustee in bankruptcy of BankAmerica Housing Services) claiming
an interest in such Manufactured Home. Assuming consummation of the transactions
contemplated herein the Trustee has the same rights as the secured party of
record would have (if such secured party were still the owner of the Contract)
against all Persons claiming an interest in such Manufactured Home and, if
applicable, such Mortgaged Property.
(v) Secondary Mortgage Market Enhancement Act. The related Manufactured
-----------------------------------------
Home is a "manufactured home" within the meaning of 00 Xxxxxx Xxxxxx Code,
Section 5402(6); BAFSB was a federally-chartered savings bank, as of the time of
each Contract's origination or purchase by BAFSB as required under Section
3(a)(41)(A)(ii) of the Securities Exchange Act of 1934, as amended.
(w) Qualified Mortgage for REMIC. Each Contract is secured by a "single
----------------------------
family residence" within the meaning of Section 25(e)(10) of the Code. The fair
market value of the Manufactured Home securing each Contract was at least equal
to 80% of the adjusted issue price of the Contract at either (i) the time the
Contract was originated (determined pursuant to the REMIC Provisions) or (ii)
the time the Contract is transferred to the Trust Fund. Each Contract is a
"qualified mortgage" under Section 860G(a)(3) of the Code.
(x) Stamping of Contracts. Within 60 days of the Closing Date, each
---------------------
original Contract will have been stamped with the following legend: "This
Contract has been assigned to The First National Bank of Chicago, as Trustee
under the Pooling and Servicing Agreement dated as of March 1, 1998 (among such
Trustee, Bank of America National Trust and Savings Association and Bank of
America, FSB) or to any successor Trustee thereunder."
(y) Actuarial Contracts. Each Contract is an actuarial manufactured
-------------------
housing installment loan agreement or a manufactured housing installment sales
contract.
(z) Land Home Contracts. No Contract other than a Land Home Contract is
-------------------
secured, or intended to be secured, in whole or in part by the lien of a
mortgage or deed of trust creating a first lien or an estate in fee simple in
the real property.
(aa) Financing of Real Property. No Contract other than a Land Home
--------------------------
Contract has financed any amount in respect of real property.
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(bb) Minimum and Maximum Contract Rate. The Contract with the lowest
---------------------------------
Contract Rate has a Contract Rate of 7.00% and the Contract with the highest
Contract Rate has a Contract Rate of 14.75%.
Section 3.03 Representations and Warranties Regarding the Contracts in the
-------------------------------------------------------------
Aggregate
---------
Each Contract Seller, jointly and severally, represents and warrants that:
(a) Amounts. The aggregate principal amounts payable by Obligors under
-------
the Contracts as of the Cut-Off Date (including scheduled principal payments due
on or after the Cut-Off Date but paid prior to the Cut-Off Date) equal or exceed
the Cut-Off Date Pool Principal Balance. The percentage (by outstanding
principal balance as of the Cut-Off Date) of the Contracts having a Net Contract
Rate that is less than the Cap Rate on the Class M Certificates is approximately
6.41%, the percentage (by outstanding principal balance as of the Cut-Off Date)
of the Contracts having a Net Contract Rate that is less than the Cap Rate on
the Class B-1 Certificates is approximately 14.61%, and the percentage (by
outstanding principal balance as of the Cut-Off Date) of the Contracts having a
Net Contract Rate that is less than the Cap Rate on the Class B-2 Certificates
is approximately 14.63%.
(b) Characteristics. The Contracts have the following characteristics
---------------
as of the Cut-Off Date: (i) Contracts representing approximately 85% of the
Contracts by remaining principal balance are attributable to loans for purchases
of new Manufactured Homes, and approximately 15% thereof is attributable to
loans for purchases of used Manufactured Homes; (ii) not more than approximately
8.27% of the Contracts by remaining principal balance as of the Cut-Off Date are
secured by Manufactured Homes located in any one state, not more than 1.00% of
the Contracts by remaining principal balance are secured by Manufactured Homes
located in an area with the same zip code, not more than 1.00% of the Contracts
by remaining principal balance are secured by Manufactured Homes located in the
same manufactured housing park, (iii) no Contract has a remaining maturity of
more than 360 months; (iv) no Contract was originated before January 1993; and
(v) the final scheduled payment date on the Contract with the latest maturity is
in February 2028.
(c) Computer Tape. The Computer Tape made available by the Servicer as
-------------
of the close of business on February 28, 1998 was accurate as of its date and
includes a description of the same Contracts that are described in the Contract
Schedule.
(d) Marking Records. On or before the Closing Date, the related Contract
---------------
Seller will have caused the portions of the electronic master record of its
manufactured housing installment sales contracts and installment loan agreements
relating to the Contracts sold by it as of the Closing Date to be clearly and
unambiguously marked to indicate that such Contracts constitute part of the
Trust Fund and are owned by the Trust Fund in accordance with the terms of the
trust created hereunder.
(e) No Adverse Selection. Except to ensure compliance with the
--------------------
representations and warranties made in Sections 3.02 and 3.03, no selection
procedures have been intentionally employed to achieve an adverse effect in
selecting the Contracts.
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Section 3.04 Representations and Warranties Regarding the Contracts.
------------------------------------------------------
Each Contract Seller, for itself, represents and warrants that:
(a) Possession. Immediately prior to the Closing Date, the Servicer will
----------
have possession of each original Contract and the related Contract File or Land
Home Contract File, as applicable (except for any certificate of title that has
not yet been returned from the appropriate public recording office). There are
and there will be no custodial agreements in effect materially and adversely
affecting the right of the related Contract Seller to make, or to cause to be
made, any delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
------------------
Contracts, the Contract Files and the Land Home Contract Files by related
Contract Seller to the Trust Fund as contemplated by this Agreement are not
subject to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction.
Section 3.05 REPURCHASES OF CONTRACTS OR SUBSTITUTION OF CONTRACTS FOR BREACH
----------------------------------------------------------------
OF REPRESENTATIONS AND WARRANTIES.
---------------------------------
(a) Each Contract Seller shall either (i) repurchase a Contract sold by it
to the Trust Fund at such Contract's Repurchase Price, or (ii) if such Contract
Seller is able to satisfy the conditions of Section 3.05(b), remove such
Contract from the Trust Fund and substitute therefor an Eligible Substitute
Contract in accordance with and subject to the limitations of Section 3.05(b),
in each case within 90 days after such Contract Seller becomes aware, or
receives written notice from the Servicer or the Trustee, of a breach of a
representation or warranty of such Contract Seller set forth in Section 3.02 or
3.03 of this Agreement that materially adversely affects the Trust Fund's
interest in such Contract, unless such breach has been cured; provided, however,
-------- -------
that with respect to any Contract incorrectly described on the Contract Schedule
with respect to remaining principal balance, which such Contract Seller would
otherwise be required to repurchase pursuant to this Section 3.05, such Contract
Seller may, in lieu of repurchasing such Contract, deposit in the Certificate
Account not later than one Business Day after such Determination Date cash in an
amount sufficient to cure such deficiency or discrepancy; and further provided,
------- --------
that with respect to a breach of a representation or warranty relating to the
Contracts in the aggregate and not to any particular Contract, a Contract Seller
may select Contracts to repurchase or substitute for such that, had such
Contracts not been included as part of the Contract Pool and after giving effect
to such substitution, if any, there would have been no breach of such
representation or warranty; and
further provided, that in connection with any Contract that a Contract Seller is
------- --------
required to repurchase, such Contract Seller shall at its own expense deliver to
the Trustee an opinion of counsel to the effect that the repurchase of such
Contract will not cause the Trust Fund to fail to qualify as a REMIC at any time
any Certificate is outstanding under then applicable REMIC Provisions, be deemed
a contribution to the Trust Fund after the Startup Day or cause any "prohibited
transaction," in each case, that will result in the imposition of a tax under
the applicable REMIC Provisions. It is understood and agreed that the obligation
of either Contract Seller to repurchase or substitute for any Contract sold by
it as to which a breach of a representation or warranty set forth in Section
3.02 or 3.03 of this Agreement has occurred and is continuing shall constitute
the sole remedy respecting such breach available to the Certificateholders, the
Trust Fund or the Trustee; provided, however, that such Contract Seller shall
-------- -------
defend and indemnify the Trustee, the Certificate Administrator, the Trust Fund
and
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the Certificateholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or suffered by any of them as a result of third-party claims
arising out of any breach of a representation or warranty set forth in Section
3.02(c), (d), (g), (h) or (w) of this Agreement. Notwithstanding any other
provision of this Agreement, the obligation of either Contract Seller under this
Section 3.05 shall not terminate upon an Event of Default.
Notwithstanding any other provision of this Agreement to the contrary,
any amount received on or recovered with respect to repurchased Contracts or
Replaced Contracts during or after the month of repurchase shall be the property
of related Contract Seller and need not be deposited in the Certificate Account.
Notwithstanding the foregoing, no Contract Seller shall deposit cash
into the Certificate Account pursuant to this Section 3.05 after the three-month
period beginning on the Closing Date unless it shall first have obtained an
Opinion of Counsel to the effect that such deposit will not give rise to any tax
under Section 86OF(a) (1) of the Code or Section 86OG(d) of the Code. Any such
deposit shall not be invested.
The Trustee shall have no obligation to pay any taxes pursuant to this
Section 3.05, other than from moneys provided to it by either Contract Seller or
from moneys held therefor pursuant to Section 4.17. The Trustee shall be deemed
conclusively to have complied with this Section 3.05 if it follows the
directions of the Servicer required to be provided in the preceding paragraph.
Upon the repurchase of any Contract by a Contract Seller, the Trustee shall
delete such Contract from the Contract Schedule.
For reasons of administrative convenience in servicing of the
Contracts, notwithstanding the above provisions of this Section 3.05(a), no
Contract Seller shall be required to repurchase or substitute for any Contract
relating to a Manufactured Home located in any jurisdiction on account of a
breach of the representation or warranty contained in Section 3.02(j) or (u) of
this Agreement solely on the basis of failure by the related Contract Seller to
cause notations to be made on any document of title relating to any such
Manufactured Home or to execute any transfer instrument (including any UCC-3
assignments) relating to any such Manufactured Home (other than a notation or a
transfer instrument necessary to show such Contract Seller as lienholder or
legal title holder) unless (i) a court of competent jurisdiction has adjudged
that, because of such failure, the Trustee does not have a perfected first-
priority security interest in such related Manufactured Home, or (ii) (A) the
Servicer has received written advice of counsel to the effect that a court of
competent jurisdiction has held that, solely because of a substantially similar
failure on the part of a pledgor or assignor of manufactured housing contracts
(who has perfected the assignment or pledge of such contracts), a perfected
first-priority security interest was not created in favor of the pledgee or
assignee (as the case may be) in a related manufactured home which is located in
such jurisdiction and which is subject to the same laws regarding the perfection
of security interests therein as apply to Manufactured Homes located in such
jurisdiction, and (B) the Servicer shall not have completed all appropriate
remedial action with respect to such Manufactured Home within 90 days after
receipt of such written advice. Any such advice shall be from counsel selected
by the Servicer on a nondiscriminatory basis from among the counsel used by the
Servicer in its general business in the jurisdiction in question. The Servicer
shall have no obligation on an ongoing basis to seek any advice with respect to
the matters described in clause (ii) above. However, the Servicer shall seek
advice with respect to
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such matters whenever information comes to the attention of its general counsel
which causes such general counsel to determine that a holding of the type
described in clause (ii)(A) might exist. If any counsel selected by the Servicer
informs the Servicer that no holding of the type described in clause (ii)(A)
exists, such advice shall be conclusive and binding on the parties with respect
to the applicable date and jurisdiction.
(b) On or prior to the date that is the second anniversary of the Closing
Date, either Contract Seller, at its election, may substitute a Contract for any
Contract that it is otherwise obligated to repurchase pursuant to Section
3.05(a) (such Contract being referred to as the "Replaced Contract") upon
satisfaction of the following conditions:
(i) the Contract to be substituted for the Replaced Contract is an
Eligible Substitute Contract and such Contract Seller delivers an Officer's
Certificate, substantially in the form of Exhibit E, to the Trustee
---------
certifying that such Contract is an Eligible Substitute Contract,
describing in reasonable detail how such Contract satisfies the definition
of the term "Eligible Substitute Contract" (as to satisfaction of
representations and warranties, such description shall be that such
Contract satisfies such representations and warranties) and certifying that
the Contract File or the Land Home Contract File, as applicable, for such
Contract is in the possession of the Servicer;
(ii) the related Contract Seller shall have delivered to the Trustee
evidence of filing with the appropriate office in California of a UCC-1
financing statement executed by such Contract Seller as debtor and naming
the Trustee as secured party and listing such Contract as collateral;
(iii) the related Contract Seller shall have delivered to the Trustee
an Opinion of Counsel (a) to the effect that the substitution of such
Contract for such Replaced Contract will not cause the Trust Fund to fail
to qualify as a REMIC at any time any Certificate is outstanding under then
applicable REMIC Provisions, be deemed a contribution to the Trust Fund
after the Startup Day or cause any "prohibited transaction," in each case,
that will result in the imposition of a tax under the applicable REMIC
Provisions, and (b) to the effect that, except as to Contracts that are
Land Home Contracts, no filing or other action other than the filing of
financing statements on Form UCC-1 with the Secretary of State of the State
of California, naming such Contract Seller as debtor and the Trustee as
secured party as required by Section 3.05(a) of this Agreement and the
filing of continuation statements as required by Section 2.02(a) is
necessary to perfect as against third parties the conveyance of the
substitute Contract by the related Contract Seller to the Trustee; and
(iv) if the Scheduled Principal Balance of such Replaced Contract is
greater than the Scheduled Principal Balance of such Contract, the related
Contract Seller shall have deposited in the Certificate Account the amount
of such excess (which amount shall be deemed a Principal Prepayment on such
Contract) and shall have included in the Officer's Certificate required by
clause (i) above a certification that such deposit has been made.
Upon satisfaction of such conditions, the Trustee shall add such
Contract to, and delete such Replaced Contract from, the Contract Schedule (or
cause such addition and deletion
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to be accomplished). Such substitution shall be effected prior to the first
Determination Date that occurs more than 90 days after the related Contract
Seller becomes aware or receives written notice from the Servicer or the
Trustee, of the breach referred to in Section 3.05(a).
(c) Promptly after the repurchase referred to in Section 3.05(a) or
the substitution referred to in Section 3.05(b), the Trustee shall execute such
documents as are presented to it by the related Contract Seller and are
reasonably necessary to reconvey the repurchased Contract or Replaced Contract,
as the case may be, to the related Contract Seller.
(d) Notwithstanding anything in this Section 3.05 to the contrary, in
the event any Opinion of Counsel referred to in this Section 3.05 indicates that
a repurchase or substitution, as the case may be, of a Contract will result in
the imposition of a tax under the applicable REMIC Provisions with respect to
"prohibited transactions," or deemed a contribution to the REMIC after the
"start-up day," the related Contract Seller shall not be required to repurchase
or substitute the Contract to which such Opinion of Counsel relates unless and
until the Servicer has determined there is an actual or imminent default with
respect thereto or that the defect or breach giving rise to the repurchase or
substitution obligation adversely affects the enforceability of such Contract.
Section 3.06 General.
-------
(a) It is understood and agreed that the representations and
warranties in this Article III hereof shall remain operative and in full force
and effect, shall survive the transfer and conveyance of the Contracts by the
Contract Sellers to the Trustee and shall inure to the benefit of the Trustee.
(b) Any cause of action against either Contract Seller relating to or
arising out of the breach of any of its respective representations and
warranties made in this Article III shall accrue as to any Contract upon (i)
discovery of such breach by either Contract Seller or notice thereof by the
Trustee or Servicer to such Contract Seller, (ii) failure by the related
Contract Seller to cure such breach, and (iii) demand upon the related Contract
Seller by the Trustee for all amounts payable in respect of such Contract under
this Agreement.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 4.01 Responsibility for Contract Administration and Servicing.
--------------------------------------------------------
BankAmerica Housing Services hereby agrees to act as Servicer under this
Agreement. The Certificateholders by their acceptance of the Certificates
consent to BankAmerica Housing Services acting as Servicer. The Servicer shall
service and administer the Contracts and, subject to the terms of this
Agreement, shall have full power and authority to do any and all things which it
may deem necessary or desirable in connection with such servicing and
administration. Subject to Section 4.02, without limiting the generality of the
foregoing, the Servicer hereby is authorized and empowered, when the Servicer
believes it appropriate in its best judgment, to execute and deliver, on behalf
of the Certificateholders and the Trust Fund or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Contracts,
with respect to the Manufactured Homes and with respect to the Mortgaged
Property. The Trustee shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to service
and administer the Contracts. The relationship of the Servicer (and of any
successor to the Servicer as servicer under this Agreement) to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent of the Trustee.
Section 4.02 Standard of Care.
----------------
In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will, consistent with the
terms of this Agreement and applicable law, act with reasonable care, using that
degree of skill and care that it exercises with respect to similar manufactured
housing contracts owned and/or serviced by it, but in no event using a degree of
skill and care that is lower than that used generally in the servicing industry
for such manufactured housing contracts; provided, however, that notwithstanding
-------- -------
the foregoing, the Servicer shall not release or waive the right to collect the
unpaid balance on any Contract. Notwithstanding anything to the contrary
contained in this Agreement, no provision of this Agreement shall be construed
so as to require the Servicer to take any action or fail to take any action in
respect of a Contract which action or failure violates applicable law.
Section 4.03 Records.
-------
The Servicer, during the period it is servicer hereunder, shall maintain
such books of account and other records as will enable the Trustee (if the
Trustee so elects in its discretion) to determine the status of each Contract.
Without limiting the generality of the preceding sentence, the Servicer shall
keep such records in respect of Liquidation Expenses as will enable the Trustee
(if the Trustee so elects in its discretion) to determine that the correct
amount of Net Liquidation Proceeds in respect of a Liquidated Contract has been
deposited in the Certificate Account.
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Section 4.04 Inspection.
----------
(a) At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Contracts and will cause its personnel
to assist in any examination of such records by the Trustee or any of its
authorized agents. The examination referred to in this Section 4.04 will be
conducted in a manner which does not interfere unreasonably with the Servicer's
normal operations or customer or employee relations. Without otherwise limiting
the scope of the examination which the Trustee may make, the Trustee or its
authorized agents, using generally accepted audit procedures, may in their
discretion verify the status of each Contract and review the records relating
thereto for conformity to Monthly Reports prepared pursuant to Article V and
compliance with the standards represented to exist as to each Contract in this
Agreement.
(b) At all times during the term hereof, the Servicer shall keep available
a copy of the Contract Schedule at its principal executive office for inspection
by Certificate Owners.
Section 4.05 Establishment of and Deposits in Certificate Accounts.
-----------------------------------------------------
On or before the Closing Date, the Trustee shall have established, and
thereafter shall maintain, a Certificate Account which is an Eligible Account,
in the form of a segregated trust account titled "BankAmerica Manufactured
Housing Contract Trust IV, Senior/Subordinate Pass-Through Certificates, Series
1998-1, Certificate Account in trust for the Trustee as trustee for the benefit
of the Certificateholders." As of the Closing Date, the Certificate Account
shall be a segregated trust account established at The First National Bank of
Chicago and shall be invested in the Trustee's Corporate Trust Short-Term
Investment Fund (as long as such fund is an Eligible Investment) or other
similar Eligible Investment selected by the Trustee. Eligible Investments shall
mature or, in the case of a money market fund, be redeemed not later than the
Business Day immediately preceding the Distribution Date next following the date
of such investment (except that, if such Eligible Investment is an obligation of
the institution that maintains the Certificate Account, then such Eligible
Investments shall mature or, in the case of a money market fund, be redeemed not
later than such Distribution Date), and shall not be sold or disposed of prior
to its maturity. All such Eligible Investments shall be made in the name of the
Trustee, as trustee for the benefit of the Certificateholders. Without limiting
the generality of the foregoing, the Trustee shall select obligations for the
investment of the Certificate Account from among the investments specified in
clauses (a) and (b) of the definition of "Eligible Investments." The Trustee
shall select such Eligible Investments, which shall mature as provided above, in
such manner as to achieve the following objectives in the order stated: (1)
preservation of principal values; and (2) maximization of income.
All net income and gain realized from any such investments, to the extent
provided by this Agreement, shall be added to the Certificate Account.
The Servicer shall deposit in the Certificate Account, as promptly as
practicable (but not later than the close of business of the second Business
Day) following receipt thereof:
(1) All amounts received from Obligors with respect to principal of
and interest on the Contracts (including Excess Contract Payments);
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(2) All Net Liquidation Proceeds;
(3) All amounts required to be deposited by either Contract Seller
pursuant to Sections 3.05(a) and (b);
(4) All Monthly Advances pursuant to Section 5.01;
(5) Any proceeds of Hazard Insurance Policies pursuant to Section
4.11 and any amounts in respect of indemnification pursuant to Section
7.03;
(6) All amounts required to be withdrawn from an REO Account and
deposited in the Certif icate Account in accordance with Section 4.17; and.
(7) All Deficiency Amounts.
Section 4.06 Payment of Taxes.
----------------
If the Servicer becomes aware of the nonpayment by an Obligor of a real or
personal property tax or other tax or charge which may result in a lien upon a
Manufactured Home or Mortgaged Property prior to, or equal to or coordinate
with, the lien of the related Contract, the Servicer, consistent with Section
4.02, shall take action, including the payment of such taxes or charges to avoid
the attachment of any such lien. If the Servicer shall have paid any such real
or personal property tax or other tax or charge directly on behalf of an
Obligor, the Servicer shall seek reimbursement therefor only from the related
Obligor (except as provided in the last sentence of this Section 4.06) and may
separately add such amount to the Obligor's obligation as provided by the
Contract, but, for the purposes of this Agreement, may not add such amount to
the remaining principal balance of the Contract. If the Servicer shall have
repossessed a Manufactured Home or Mortgaged Property on behalf of the
Certificateholders and the Trustee, the Servicer shall pay the amount of any
such tax or charge arising during the time such Manufactured Home is in the
Servicer's possession or title to the Mortgaged Property is in the name of the
Servicer (or any Person acting on behalf of the Servicer), unless the Servicer
is contesting in good faith such tax or charge or the validity of the claimed
lien on such Manufactured Home or Mortgaged Property. If the Obligor does not
reimburse the Servicer for payment of such taxes or charges pursuant to this
Section 4.06 and the related Contract is liquidated after a default, the
Servicer shall be reimbursed for its payment of such taxes or charges out of the
related Liquidation Proceeds.
Section 4.07 Enforcement.
-----------
(a) The Servicer, consistent with Section 4.02, shall act with respect to
the Contracts in such manner as will maximize the receipt of principal and
interest on such Contracts.
(b) The Servicer shall xxx to enforce or collect upon Contracts and, where
permitted by applicable law, any Deficiency at its own expense, in its own name,
if possible, or as agent for the Contract Owner in its own name, if possible, or
as agent for the Trust Fund. If the Servicer elects to commence a legal
proceeding to enforce a Contract, the act of commencement shall be deemed to be
an automatic assignment of the Contract to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Contract on the ground that it is not a
real party in interest or a holder entitled to
-39-
enforce the Contract, the Trustee on behalf of the Certificateholders shall, at
the Servicer's expense, take such steps as the Servicer deems necessary to
enforce the Contract, including bringing suit in its name or the names of the
Certificateholders. If there has been a recovery of attorneys' fees in favor of
the Servicer or the Trust Fund in an action involving the enforcement of a
Contract, the Servicer shall be reimbursed out of such recovery for its out-of-
pocket attorney's fees and expenses incurred in such enforcement action.
(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with Section 4.02.
In exercising recourse rights, the Servicer is authorized on the Trustee's
behalf to reassign the Contract or to resell the related Manufactured Home and,
if applicable, the Mortgaged Property, to the Person against whom recourse
exists at the price set forth in the document creating the recourse.
(d) The Servicer may grant to the Obligor on any Contract any rebate,
refund or adjustment out of the Certificate Account that is required because of
an overpayment in connection with the partial prepayment or prepayment in full
of the Contract or otherwise. The Servicer may rescind, cancel or make material
modifications of the terms of any Contract (including modifying the amounts and
due dates of scheduled monthly payments); provided that, unless required by
--------
applicable law or to bring Contracts into conformity with the representations
and warranties contained in Article III, the Servicer will not permit any
rescission or cancellation of any Contract or any material modification of a
Contract other than in connection with a default or an imminent default on such
Contract unless the Servicer obtains an Opinion of Counsel to the effect that
such modification will not cause the Trust Fund to fail to qualify as a REMIC or
result in the imposition of taxes on the Trust Fund under the REMIC Provisions.
Section 4.08 Transfer of Certificate Account.
-------------------------------
The Trustee may transfer the Certificate Account to a different depository
institution from time to time, so long as the Certificate Account remains an
Eligible Account. The Trustee shall give notice of any transfer of the
Certificate Account to each Rating Agency prior to such transfer.
Section 4.09 Maintenance of Hazard Insurance Policies.
----------------------------------------
(a) Except as otherwise provided in subsection (b) of this Section 4.09,
the Servicer shall cause to be maintained with respect to each Contract one or
more Hazard Insurance Policies which provide, at a minimum, the same coverage as
a standard form fire and extended coverage insurance policy that is customary
for manufactured housing, issued by a company authorized to issue such policies
in the state in which the Manufactured Home is located, and in an amount which
is not less than the maximum insurable value of such Manufactured Home or the
principal balance of the related Contract, whichever is less; provided that such
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Hazard Insurance Policies may provide for customary deductible amounts, and
further provided that the amount of coverage provided by each Hazard Insurance
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Policy shall be sufficient to avoid the application of any co-insurance clause
contained therein. If a Manufactured Home is located within a federally
designated special flood hazard area, the Servicer shall, to the extent required
by applicable law or regulation, also cause flood insurance to be maintained,
which coverage shall be at least equal to the minimum amount specified in the
preceding sentence or such lesser amount as may be available under the federal
flood insurance program. Each Hazard Insurance Policy caused to be
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maintained by the Servicer shall contain a standard loss payee clause in favor
of the Servicer and its successors and assigns. If any Obligor is in default in
the payment of premiums on its Hazard Insurance Policy or Policies, the Servicer
shall pay such premiums out of its own funds, and may add separately such
premium to the Obligor's obligation as provided by the Contract, but may not add
such premium to the remaining principal balance of the Contract for purposes of
this Agreement. If the Obligor does not reimburse the Servicer for payment of
such premiums and the related Contract is liquidated after a default, the
Servicer shall be reimbursed for its payment of such premiums out of the related
Liquidation Proceeds.
(b) The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 4.09, and shall, to the extent that the related
Contract does not require the Obligor to maintain a Hazard Insurance Policy with
respect to the related Manufactured Home, maintain one or more blanket insurance
policies covering losses as provided in subsection (a) of this Section 4.09
resulting from the absence or insufficiency of individual Hazard Insurance
Policies. Any such blanket policy shall be substantially in the form that is the
industry standard for blanket insurance policies issued to cover Manufactured
Homes and in the amount sufficient to cover all losses on the Contracts. The
Servicer shall pay, out of its own funds, the premium for such policy on the
basis described therein and shall deposit in the Certificate Account, on the
Business Day next preceding the Determination Date following the Collection
Period in which the insurance proceeds from claims in respect of any Contracts
under such blanket policy are or should have been received, the deductible
amount with respect to such claims. The Servicer shall not, however, be required
to deposit any deductible amount with respect to claims under individual Hazard
Insurance Policies maintained pursuant to subsection (a) of this Section 4.09.
(c) If the Servicer shall have repossessed a Manufactured Home on behalf
of the Trustee, the Servicer shall either (i) maintain at its expense a Hazard
Insurance Policy with respect to such Manufactured Home, except that the
Servicer shall be responsible for depositing any deductible amount with respect
to all claims under individual Hazard Insurance Policies, or (ii) indemnify the
Trust Fund against any damage to such Manufactured Home prior to resale or other
disposition that would have been covered by such Hazard Insurance Policy.
(d) Any cost incurred by the Servicer in maintaining any of the foregoing
insurance, for the purpose of calculating monthly distributions to
Certificateholders, shall not be added to the amount owing under the Contract,
notwithstanding that the terms of the Contract so permit. The Servicer shall not
be entitled to reimbursement from the Contract Sellers, the Trustee or the
Certificateholders for such costs. Such costs (other than the cost of the
blanket policy) shall only be recovered out of later payments by the Obligor for
such premiums or, if the related Contract is liquidated after a default, out of
the related Liquidation Proceeds.
Section 4.10 Fidelity Bond and Errors and Omissions Insurance.
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The Servicer shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies acceptable to FNMA and FHLMC, on all officers, employees
or other persons acting in any capacity with regard to the Contracts to handle
funds, money, documents and papers relating to the Contracts. Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of
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such persons. No provision of this Section 4.10 requiring such fidelity bond and
errors and omissions insurance shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be in an amount as is customary
for servicers that service a portfolio of manufactured housing installment sales
contracts of $100 million or more and that are generally acceptable as servicers
to institutional investors. On or before April 1 of every year, the Servicer
shall cause to be delivered to the Trustee a certified true copy of such
fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond or insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Trustee.
Section 4.11 Collections under Hazard Insurance Policies; Consent to
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Transfers of Manufactured Homes; Assumption Agreements.
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(a) In connection with its activities as administrator and servicer of the
Contracts, the Servicer agrees to present, on behalf of itself, the Trustee and
the Certificateholders, claims to the insurer under any Hazard Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Hazard Insurance Policies or any blanket
policies obtained pursuant to Section 4.09(b). Any amounts collected by the
Servicer under any such Hazard Insurance Policies shall be deposited in the
Certificate Account pursuant to Section 4.05, except to the extent they are
applied to the restoration of the related Manufactured Home or released to the
related Obligor in accordance with the normal servicing procedures of the
Servicer.
(b) In connection with any transfer of ownership of a Manufactured Home by
an Obligor to a Person, the Servicer shall consent to any such transfer and
permit the assumption by such Person of the Contract related to such
Manufactured Home, provided that (i) such Person, in the judgment of the
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Servicer, meets the Servicer's underwriting standards then in effect, (ii) such
Person enters into an assumption agreement, (iii) the Servicer determines that
permitting such assumption by such Person will not materially increase the risk
of nonpayment of such Contract and (iv) such action will not adversely affect or
jeopardize any coverage under any insurance policy required by this Agreement.
In the event the Servicer determines that the conditions of the proviso of the
preceding sentence have not been fulfilled, then the Servicer shall withhold its
consent to any such transfer, but only to the extent permitted under the
Contract and applicable law and governmental regulations and only to the extent
that such action will not adversely affect or jeopardize any coverage under any
insurance policy required by this Agreement. In connection with any such
assumption, the rate of interest borne by, and all other material terms of, the
related Contract shall not be changed.
(c) In any case in which a Manufactured Home or Mortgaged Property is to
be conveyed to a Person by an Obligor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Contract in
accordance with Section 4.11(b) or Section 4.07(d), upon the closing of such
conveyance, the Servicer shall cause the originals of the assumption agreement,
the release (if any), or the modification or supplement to the Contract to be
deposited with the Contract File or the Land Home Contract File, as applicable,
for such Contract. Any fee collected by the Servicer for entering into an
assumption or substitution of liability agreement with respect to such Contract
will be retained by the Servicer as additional servicing compensation.
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Section 4.12 Realization upon Defaulted Contracts.
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Subject to applicable law, the Servicer shall repossess, foreclose upon or
otherwise comparably convert the ownership of Manufactured Homes and Mortgaged
Property securing all Contracts that come into default and which the Servicer
believes in its good faith business judgment will not be brought current.
Subject to Section 4.17, the Servicer shall manage, conserve and protect such
Manufactured Homes and Mortgaged Property for the purposes of their prompt
disposition and sale, and shall dispose of such Manufactured Homes and Mortgaged
Property on such terms and conditions as it deems in the best interests of the
Certificateholders. If the Servicer has actual knowledge that a Mortgaged
Property is affected by hazardous waste, then the Servicer shall not cause the
related Contract Seller to acquire title to such Mortgaged Property in a
foreclosure or similar proceeding. For purposes of the proviso in the preceding
sentence, the Servicer shall not be deemed to have actual knowledge that a
Mortgaged Property is affected by hazardous waste unless it shall have received
written notice that hazardous waste is present on such property and such written
notice has been made a part of the Land Home Contract File with respect to the
related Contract. In connection with such activities, the Servicer shall follow
such practices and procedures as are consistent with Section 4.02.
Section 4.13 Costs and Expenses.
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Except as otherwise expressly provided herein, all costs and expenses
incurred by the Servicer in carrying out its duties under this Agreement,
including all fees and expenses incurred in connection with the enforcement of
Contracts (including enforcement of defaulted Contracts and repossessions of
Manufactured Homes and Mortgaged Property securing such Contracts), shall be
paid by the Servicer, and the Servicer shall not be entitled to reimbursement
hereunder, except to the extent such reimbursement is specifically provided for
in this Agreement. Notwithstanding the foregoing, the Servicer shall be
reimbursed out of the Liquidation Proceeds of a defaulted Contract for
Liquidation Expenses incurred by it in realizing upon the related Manufactured
Home and Mortgaged Property, including, but not limited to: (i) costs of
refurbishing and securing such Manufactured Home; (ii) transportation expenses
incurred in moving the Manufactured Home; (iii) reasonable legal fees and
expenses of outside counsel; and (iv) sales commissions paid to Persons that are
not Affiliates of the Servicer. The Servicer shall not incur any Liquidation
Expenses unless it determines in its good faith business judgment that incurring
such expenses will increase the Net Liquidation Proceeds from such Manufactured
Home and Mortgaged Property.
Section 4.14 Trustee to Cooperate.
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(a) Upon payment in full of any Contract, the Servicer will notify the
Trustee on the next Distribution Date by a certificate of a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Certificate Account pursuant to Section 4.05 have been
deposited). The Servicer is authorized to execute an instrument in satisfaction
of such Contract and to 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. The Servicer shall determine
when a Contract has been paid in full. To the extent insufficient payments are
received on a Contract mistakenly determined by the Servicer to
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be prepaid or paid in full and satisfied, the shortfall shall be paid by the
Servicer out of its own funds by deposit into the Certificate Account.
(b) From time to time as appropriate for servicing and foreclosure in
connection with any Land Home Contract, the Trustee shall, upon written request
of a Servicing Officer and delivery to the Trustee of a receipt signed by such
Servicing Officer, cause the original Land Home Contract and the related Land
Home Contract File to be released to the Servicer and shall execute such
documents as the Servicer shall deem necessary to the prosecution of any such
proceedings. The Trustee shall stamp the face of each such Land Home Contract to
be released to the Servicer with a notation that the Land Home Contract has been
assigned to the Trustee.
(c) The Servicer's receipt of a Land Home Contract and/or Land Home
Contract File shall obligate the Servicer to return the original Land Home
Contract and the related Land Home Contract File to the Trustee, or any person
acting on behalf of the Trustee, when its need by the Servicer has ceased unless
the Contract shall be liquidated, repurchased or replaced as described in
Section 3.05.
(d) Upon request of a Servicing Officer, the Trustee shall, at the expense
of the Servicer, perform such acts as are reasonably requested by the Servicer
(including the execution of documents) and otherwise cooperate with the Servicer
in the enforcement of rights and remedies with respect to Contracts.
Section 4.15 Servicing and Other Compensation.
--------------------------------
The Servicer, as compensation for its activities hereunder including the
payment of fees and expenses of the Trustee, the Certificate Administrator and
the Paying Agent pursuant to Section 9.05, shall be entitled to receive on each
Distribution Date the Monthly Servicing Fee and Repossession Profits pursuant to
Section 5.03.
Additional servicing compensation in the form of Late Payment Fees or
Extension Fees and any transfer of equity or assumption fees shall be retained
by the Servicer. The Servicer shall not be reimbursed for its costs and
expenses in servicing the Contracts except as otherwise expressly provided
herein.
No transfer, sale pledge or other disposition of the Servicer's right to
receive all or any portion of the Monthly Servicing Fee shall be made, and any
such attempted transfer, sale, pledge or other disposition shall be void, unless
such transfer is made to a successor Servicer in connection with the assumption
by such successor Servicer of the duties hereunder pursuant to Section 7.07 and
all (and not a portion) of the Monthly Servicing Fee is transferred to such
successor Servicer.
Section 4.16 Custody of Contracts.
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(a) Subject to the terms and conditions of this Section 4.16, the Servicer
agrees to act as custodian of the Contract Files (other than the Land Home
Contract Files) for the benefit of the Certificateholders and the Trust Fund.
The Certificateholders by their acceptance of the Certificates, consent to the
Servicer acting as custodian, and the Servicer agrees to maintain the Contract
Files (other than Land Home Contract Files) as custodian therefor.
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(b) The Servicer agrees to maintain the related Contract Files (other than
the Land Home Contract Files) at its offices where they are presently
maintained, or at such other offices of the Servicer in the State of California
as shall from time to time be identified to the Trustee by ten days' prior
written notice. The Servicer may temporarily move individual Contract Files,
Land Home Contract Files or, in each case, any portion thereof without notice as
necessary to conduct collection and other servicing activities in accordance
with its customary practices and procedures.
(c) As custodian, the Servicer shall have and perform the following powers
and duties:
(i) hold the Contract Files (other than the Land Home Contract
Files) on behalf of the Certificateholders and the Trustee, maintain
accurate records pertaining to each Contract to enable it to comply with
the terms and conditions of this Agreement, maintain a current inventory
thereof and conduct annual physical inspections of Contract Files held by
it under this Agreement;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to the
Contract on the Servicer's premises and the receipting for Contract taken
from their storage area by an employee of the Servicer for purposes of
servicing or any other purposes; and
(iii) attend to all details in connection with maintaining custody of
the Contract Files on behalf of the Certificateholders and the Trustee. (d)
In performing its duties under this Section 4.16, the Servicer agrees to
act in accordance with the standard of care set forth in Section 4.02. The
Servicer shall promptly report to the Trustee any failure by it to hold the
Contract Files as herein provided, and shall promptly take appropriate
action to remedy any such failure. In acting as custodian of the Contract
Files, the Servicer further agrees not to assert any beneficial ownership
interests in the Contracts or the Contract Files. The Servicer agrees to
indemnify the Certificateholders and the Trustee for any and all
liabilities, obligations, losses, damages, payments, costs or expenses of
any kind whatsoever which may be imposed on, incurred or asserted against
the Certificateholders and the Trustee as the result of any act or omission
by the Servicer relating to the maintenance and custody of the Contract
Files; provided, however, that the Servicer will not be liable for any
-------- -------
portion of any such amount resulting from the negligence or willful
misconduct of any other Person.
(e) Not later than 60 days from the Closing Date, each Contract Seller
shall deliver, or cause to be delivered, to the Trustee the following:
(i) The Land Home Contract Files;
(ii) The original Land Home Contract endorsed as provided in Section
3.02(x) (which endorsement may be manual or facsimile signature) on behalf
of the applicable Contract Seller; and
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(iii) an Assignment from BAFSB (on behalf of the applicable Contract
Seller) to the Trustee, which Assignment shall be in form and substance for
recording, but shall not be recorded except as required by Section 4.22
below;
Notwithstanding anything to the contrary contained in this Section 4.16(e), in
those instances where the public recording office retains the original Mortgage,
the Assignment of the Mortgage or the intervening Assignments of the Mortgage
after it has been recorded, the related Contract Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of
such Mortgage, such Assignment or Assignments of Mortgage certified by the
public recording office to be a true copy of the recorded original thereof.
Within 90 days following the Closing Date, the Trustee shall review each
Land Home Contract File to determine that all required documents set forth in
each item of the first paragraph of this Section 4.16(e) have been executed and
received and that such documents relate to the Land Home Contracts identified on
the Contract Schedule. For purposes of this determination, the Trustee may rely
on the purported due execution and genuineness of any signature thereon. If
within such 90 day period the Trustee finds that any document constituting a
part of a Land Home Contract File was not executed, defective or received or is
unrelated to the Land Home Contracts identified in the Contract Schedule (in
this Section 4.16(e), a "defect"), the Trustee shall promptly upon the
conclusion of its review notify the Servicer and the Servicer shall notify the
related Contract Seller. The related Contract Seller shall have a period of 90
days from receipt of such notice within which to correct or cure any such defect
after the Contract Seller has been notified of such. If the Contract Seller
cannot correct or cure any such defect with respect to a Land Home Contract
within such 90 day period, it shall comply with the provisions of Section 3.05
hereof.
If recordation of any Assignment is required hereunder, the original of
each such recorded Assignment shall be delivered to the Trustee within 10 days
following the date on which it is returned to the Contract Seller by the office
with which such Assignment was filed for recordation. Upon receipt by the
Trustee of the recorded Assignment, such recorded Assignment shall become part
of the Land Home Contract File.
(f) Custodial Arrangements. The Trustee may appoint a custodian who is
----------------------
acceptable to the Servicer and each Contract Seller and who, upon execution of a
custodial agreement, shall maintain possession of the Land Home Contract Files,
or such part of them as the Trustee shall direct, as agent of the Trustee
pursuant to the terms of such custodial agreement. The appointment of such
custodian shall not relieve the trustee of its obligations hereunder.
The Trustee shall keep the Servicer apprised at all times after the Closing
Date of the location of the Land Home Contract Files. The Trustee shall take
all steps that are reasonably necessary or appropriate in order to facilitate
the Servicer's access to the Land Home Contract Files during normal business
hours of the Trustee or any custodian and shall cooperate fully with the
Servicer in securing such access.
Section 4.17 REMIC Compliance.
----------------
(a) The REMIC Administrator shall make an election to treat the Trust Fund
as a REMIC under the Code and, if necessary, under applicable state law. Such
election will be made
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on Form 1066 or other appropriate federal tax or information return (including
Form 8811) or any appropriate state return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued. For the
purposes of the REMIC election in respect of the Trust Fund, each of the Class
A, Class M and Class B Certificates shall be designated as the "regular
interests" and the Class R Certificates shall be designated as the sole class of
"residual interests" in the REMIC. The REMIC Administrator and the Trustee shall
not permit the creation of any "interests" (within the meaning of Section 860G
of the Code) in the REMIC other than the Certificates.
(b) The Closing Date is hereby designated as the "startup day" (the
"Startup Date") of the Trust Fund within the meaning of Section 860G(a)(9) of
the Code.
(c) The REMIC Administrator shall at all times hold a Class R Certificate
representing a 0.01% Percentage Interest of all Class R Certificates and shall
be designated as "the tax matters person" with respect to the REMIC in the
manner provided under Treasury regulations section 1.860F-4(d) and temporary
Treasury regulations section 301.6231(a)(7)-1T. The REMIC Administrator, as tax
matters person, shall (i) act on behalf of the REMIC in relation to any tax
matter or controversy involving the Trust Fund and (ii) represent the Trust Fund
in any administrative or judicial proceeding relating to an examination or audit
by any governmental taxing authority with respect thereto. The legal expenses,
including without limitation attorneys' or accountants' fees, and costs of any
such proceeding and any liability resulting therefrom shall be expenses of the
Trust Fund and the REMIC Administrator shall be entitled to reimbursement
therefor out of amounts attributable to the Contracts on deposit in the
Certificate Account provided by Section 5.03 unless such legal expenses and
costs are incurred by reason of the Servicer's willful misfeasance, bad faith or
gross negligence. If the REMIC Administrator is no longer the Servicer
hereunder, at its option the REMIC Administrator may continue its duties as tax
matters person and shall be paid reasonable compensation not to exceed $3,000
per year by any successor Servicer hereunder for so acting as the REMIC
Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of
the tax returns that it determines are required with respect to the REMIC
created hereunder and deliver such tax returns in a timely manner to the Trustee
and the Trustee shall sign and file such tax returns in a timely manner. The
expenses of preparing such returns shall be borne by the REMIC Administrator
without any right of reimbursement therefor. The REMIC Administrator agrees to
indemnify and hold harmless the Trustee with respect to any tax liability
arising from the Trustee's signing of tax returns that contain errors or
omissions. The Trustee and Servicer shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time to
time request for the purpose of enabling the REMIC Administrator to prepare tax
returns.
(e) The REMIC Administrator shall provide (i) to any transferor of a Class
R Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of the REMIC.
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(f) The REMIC Administrator and the Servicer shall take such actions and
shall cause the REMIC created hereunder to take such actions as are reasonably
within the REMIC Administrator's or the Servicer's control and the scope of its
duties more specifically set forth herein as shall be necessary or desirable to
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Trustee shall assist the Servicer and the REMIC Administrator, to the extent
reasonably requested by the Servicer and the REMIC Administrator to do so). The
REMIC Administrator and the Servicer shall not knowingly or intentionally take
any action, cause the Trust Fund to take any action or fail to take (or fail to
cause to be taken) any action reasonably within their respective control that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC as a REMIC or (ii) result in the imposition of
a tax upon the REMIC (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860(G)(d) of the Code) (either
such event, in the absence of an Opinion of Counsel or the indemnification
referred to in this sentence, an "Adverse REMIC Event") unless the REMIC
Administrator or the Servicer, as applicable, has received an Opinion of Counsel
(at the expense of the party seeking to take such action or, if such party fails
to pay such expense, and the REMIC Administrator or the Servicer, as applicable,
determines that taking such action is in the best interest of the Trust Fund and
the Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the REMIC Administrator, the Contract Sellers, the Servicer or the
Trustee) to the effect that the contemplated action will not, with respect to
the REMIC created hereunder, endanger such status or, unless the REMIC
Administrator, the Servicer or both, as applicable, determine in its or their
sole discretion to indemnify the Trust Fund against the imposition of such a
tax, result in the imposition of such a tax. Wherever in this Agreement a
contemplated action may not be taken because the timing of such action might
result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the
Trust Fund, such action may nonetheless be taken provided that the indemnity
given in the preceding sentence with respect to any taxes that might be imposed
on the Trust Fund has been given and that all other preconditions to the taking
of such action have been satisfied. The Trustee shall not take or fail to take
any action (whether or not authorized hereunder) as to which the REMIC
Administrator or the Servicer, as applicable, has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action
with respect to the REMIC or its assets, or causing the REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, the
Trustee will consult with the REMIC Administrator or the Servicer, as
applicable, or its designee, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to the REMIC, and the
Trustee shall not take any such action or cause the REMIC to take any such
action as to which the REMIC Administrator or the Servicer, as applicable, has
advised it in writing that an Adverse REMIC Event could occur. The REMIC
Administrator or the Servicer, as applicable, may consult with counsel to make
such written advice, and the cost of same shall be borne by the party seeking to
take the action not expressly permitted by this Agreement, but in no event at
the expense of the REMIC Administrator or the Servicer. At all times as may be
required by the Code, the Servicer will to the extent within its control and the
scope of its duties more specifically set forth herein, maintain substantially
all of the assets of the REMIC as "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
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(g) In the event that any tax, including interest, penalties, additional
amounts or additions to tax (a "Tax"), is imposed on the Trust Fund, such Tax
shall be charged against amounts otherwise required to be distributed to the
Holders of the Class R Certificates. The Trustee is hereby authorized to retain,
or cause the Paying Agent to retain, from amounts otherwise required to be
distributed to the Holders of the Class R Certificates sufficient funds to pay
or provide for the payment of, and to actually pay, or cause the Paying Agent to
pay, such Tax as is legally owed by the Trust Fund (but such authorization shall
not prevent the Servicer from contesting any such Tax in appropriate
proceedings, and withholding payment of such Tax, if permitted by law, pending
the outcome of such proceedings). To the extent that sufficient amounts cannot
be so retained to pay or provide for the payment of any tax imposed on gain
realized from any prohibited transaction (as defined in the REMIC Provisions),
the Trustee is hereby authorized to and shall segregate, into a separate non-
interest-bearing account, the net income from such prohibited transactions and
pay, or cause the Paying Agent to pay, such Tax. In the event any (i) amounts
initially retained from amounts required to be distributed to the Holders of the
Class R Certificates and (ii) income so segregated and applied towards the
payment of such Tax shall not be sufficient to pay such Tax in its entirety, the
amount of the shortfall shall be paid from funds in the Certificate Account
notwithstanding anything to the contrary contained herein. To the extent any
such segregated income or funds from the Certificate Account are paid to the
Internal Revenue Service, the Trustee shall retain, or cause to be retained, an
amount equal to the amount of such income or funds so paid from future amounts
otherwise required to be distributed to the Holders of the Class R Certificates
and shall deposit such retained amounts in the Certificate Account for
distribution to the Holders of the Regular Certificates.
(h) The Trustee and the Servicer shall, for federal income tax purposes,
maintain books and records with respect to the REMIC on a calendar year and on
an accrual basis or as otherwise may be required by the REMIC Provisions.
(i) Following the Startup Day, neither the Servicer nor the Trustee shall
accept any contributions of assets to the REMIC unless (subject to Section
4.17(f)) the Servicer and the Trustee shall have received an Opinion of Counsel
(at the expense of the party seeking to make such contributions) to the effect
that the inclusion of such assets in the REMIC will not cause the REMIC to fail
to qualify as a REMIC at any time that any Certificates are outstanding or
subject the REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(j) Neither the Servicer nor the Trustee shall (subject to Section
4.17(f)) enter into any arrangement by which the REMIC will receive a fee or
other compensation for services nor permit the REMIC to receive any income from
assets other than "qualified mortgages" as defined in Section 860G(a)(3) of the
Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Balance of each Class of Certificates representing a regular interest in the
REMIC would be reduced to zero is October 10, 2027 which is the Distribution
Date immediately following the latest schedule maturity of any Contract.
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(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for the REMIC.
(m) Neither the Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Contracts (except in connection with (i) the default,
imminent default or foreclosure of a Contract, including but not limited to, the
acquisition or sale of a Manufactured Home or a Mortgaged Property acquired by
deed in lieu of foreclosure, (ii) the bankruptcy of the REMIC, (iii) the
termination of the REMIC pursuant to Article X of this Agreement or (iv) a
purchase of Contracts pursuant to Article III of this Agreement) nor acquire any
assets for the REMIC, nor sell or dispose of any investments in the Certificate
Account for gain nor accept any contributions to the REMIC after the Closing
Date unless it has received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not (a) affect adversely the status of the
REMIC as a REMIC or (b) unless the Servicer has determined in its sole
discretion to indemnify the Trust Fund against such tax, cause the REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.
(n) Each Holder of a Class R Certificate, by purchasing such Class R
Certificate, agrees to give the Servicer written notice that it is a "pass-
through interest holder" within the meaning of Temporary Treasury Regulations
Section 1.67-3T(a)(2)(i)(A) immediately upon becoming the Holder of such Class R
Certificate, if it is, or is holding such Class R Certificate on behalf of, a
"pass-through interest holder."
(o) In the event that any Manufactured Home or Mortgaged Property is
acquired in a repossession (an "REO Property"), the Servicer shall sell any REO
Property within three years of its acquisition by the Trust Fund, unless (i) at
least 60 days before such three-year period would otherwise expire, the Servicer
applies for an extension of such three-year period pursuant to Sections
856(e)(3) and 860G(a)(8)(A) of the Code, in which case the Servicer shall sell
such REO Property within the applicable extension period or (ii) at the request
of the Servicer, the Trustee seeks, and subsequently receives, an Opinion of
Counsel, addressed to the Trustee and the Servicer, to the effect that the
holding by the Trust Fund of such REO Property subsequent to three years after
its acquisition will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as defined in Section 860F of the Code or cause
the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding. The Servicer shall manage, conserve, protect and operate each
REO Property solely for the purpose of its prompt disposition and sale in a
manner that does not cause any such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the REMIC of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under the REMIC Provisions.
In connection with its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
the Servicer and the Certificateholders for the period prior to the sale of such
REO Property.
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(p) The Servicer shall segregate and hold all funds collected and received
in connection with the operation of any REO Property separate and apart from its
own funds and general assets and shall establish and maintain with respect to
each REO Property an account held in trust for the Trustee for the benefit of
the Certificateholders (each, an "REO Account"), which shall be an Eligible
Account and the funds therein shall be invested in Eligible Investments that
will mature not later than the Business Day preceding the applicable
Determination Date. The Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in each REO Account by the depository.
(q) The Servicer shall deposit, or cause to be deposited, on a daily basis
in each REO Account all revenues received with respect to operation of the
related REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property. On or before each
Determination Date, the Servicer shall withdraw from each REO Account and
deliver to the Trustee for deposit into the Certificate Account the income from
the REO Property on deposit in the REO Account, net of its reasonable fees and
expenses.
(r) The disposition of REO Property shall be carried out by the Servicer
at such price and upon such terms and conditions as the Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities.
(s) The proceeds from the disposition of any REO Property, net of any
reimbursement to the Servicer as provided above, shall be deposited in the REO
Account and shall be deposited in the Certificate Account when the related
Contract becomes a Liquidated Contract.
Section 4.18 Management of REO Property.
--------------------------
(a) If the Trustee acquires any REO Property pursuant to Section 4.17, the
Servicer shall have full power and authority, subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things in
connection therewith as are consistent with the manner in which the Servicer
manages and operates similar property owned by the Servicer or any of its
Affiliates, all on such terms and for such period as the Servicer deems to be in
the best interests of Certificateholders, and, consistent therewith, shall
withdraw from the REO Account, to the extent of amounts on deposit therein with
respect to such REO Property, funds necessary for the proper operation,
management and maintenance of such REO Property, including:
(i) all insurance premiums due and payable in respect to such REO
Property;
(ii) all real estate taxes and assessments in respect to such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the REO Account in respect of any
REO Property are insufficient for the purposes set forth in (i)-(iii) above with
respect to such REO Property, the Servicer shall advance from its own funds such
amount as is necessary for such purposes if, but only if, the Servicer would
make such advances if the Servicer owned such REO Property and if in the
Servicer's judgment, the payment of such amounts will be recoverable from the
operation or sale of such REO Property.
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(b) Notwithstanding the foregoing, the Servicer shall not:
(i) 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 Contract became
imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or
(ii) directly operate, or allow any other Person to directly operate,
any REO Property on any date more than 90 days after its date of
acquisition;
unless, in any such case, the Servicer has requested and received an Opinion of
Counsel to the effect that such action will not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code at any time that it is held by the Trust Fund, in which case the
Servicer may take such actions as are specified in such Opinion of Counsel.
(c) The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that (A) the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed in subsection (a) hereof, (B) hold all
related revenues in a segregated account, which shall be an Eligible
Account, and (C) remit all related revenues collected (net of such costs
and expenses and any fees retained by such Independent Contractor) to the
Servicer on a monthly or more frequent basis;
(iii) none of the provisions of this Section 4.18(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Servicer of any of its duties and
obligations to the Trustee on behalf of Certificateholders with respect to
the operation and management of any such REO Property; and
(iv) the Servicer shall be obligated with respect thereto to the same
extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. The Servicer shall be entitled to pay all fees owed to
any such Independent Contractor out of the REO Account pursuant to Section 4.17.
(d) Subject to Section 4.18(b), the Servicer shall itself be entitled to
operate and manage any foreclosure property and, in such event, shall be
entitled to pay itself a monthly
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management fee in accordance with Section 4.17; provided that the amount of such
--------
management fee shall not exceed the amount customarily charged for the operation
and management of similar property in the locality of such REO Property by
property managers other than the Servicer or its Affiliates.
Section 4.19 Reports to the Securities and Exchange Commission.
-------------------------------------------------
The Servicer shall use reasonable efforts to assist either Contract Seller
in obtaining any information maintained by it in the ordinary course of
performing its duties hereunder that is necessary for either Contract Seller, on
behalf of the Trust Fund, to cause to be filed with the Securities and Exchange
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission thereunder.
Section 4.20 Annual Statement as to Compliance.
---------------------------------
The Servicer will deliver to each Contract Seller, the Trustee and each
Rating Agency on or before April 1 of each year, beginning with the first April
1 that occurs after the Cut-Off Date, an Officer's Certificate (i) stating that
a review of the activities of the Servicer during the preceding calendar year
and of performance under this Agreement has been made under such officer's
supervision, and (ii) stating that to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
Section 4.21 Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
On or before April 1 of each year commencing in 1999, 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 each Contract Seller, the Trustee and each Rating Agency to the effect that
such firm has examined certain documents and records relating to the servicing
of the Contracts under this Agreement and, at the option of the Servicer,
manufactured housing installment sale contracts and installment loan agreements
under pooling and servicing agreements substantially similar to this Agreement
with regard to servicing procedures (such statement to have attached thereto a
schedule setting forth the pooling and servicing agreements covered thereby,
including this Agreement) and that, on the basis of such examination conducted
substantially in compliance with this Agreement or such agreements, as the case
may be, and generally accepted auditing standards, such servicing has been
conducted substantially in compliance with this Agreement or such pooling and
servicing agreements, as the case may be, except for such exceptions as such
firm believes to be immaterial and such other exceptions or errors in records
that may be set forth in such statement. For purposes of such statement, such
firm may assume conclusively that all pooling and servicing agreements among the
Contract Sellers, the Servicer and the Trustee relating to certificates
evidencing an interest in actuarial manufactured housing contracts are
substantially similar to one another, except for any such pooling and servicing
agreement which by its terms specifically states otherwise.
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Section 4.22 Retitling of Land Home Contracts.
--------------------------------
If a Contract Seller or the Servicer receives actual notice or knowledge
that a Contract Seller is no longer assigned a long-term senior debt rating from
Xxxxx'x of Baa3 or higher, from BBB- or higher from Fitch, or an equivalent
rating from any nationally recognized statistical rating organization, the
Servicer shall promptly provide notice to the Trustee that it no longer has such
rating. If at any time during the term of this Agreement the Trustee receives
written notice from the Servicer or a Contract Seller that a Contract Seller
does not have a long-term senior debt rating from Xxxxx'x of Baa3 or higher,
from BBB- or higher from Fitch, or an equivalent rating from any nationally
recognized statistical rating organization, or if the Trustee otherwise becomes
aware that a Contract Seller is no longer assigned such rating, the Trustee, at
the related Contract Seller's expense, shall file promptly in the appropriate
recording offices the assignments to the Trustee on behalf of the Trust Fund of
each Mortgage securing a Land Home Contract sold by such Contract Seller to the
Trust Fund.
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ARTICLE V
PAYMENTS, MONTHLY ADVANCES AND MONTHLY REPORTS
Section 5.01 Monthly Advances by the Servicer.
--------------------------------
(a) By the close of business on the day prior to each Distribution Date,
the Servicer shall (i) cause to be deposited, out of its own funds, in the
Certificate Account the Monthly Advance for the related Distribution Date, (ii)
direct the Trustee to apply all or a portion of the Excess Contract Payments in
the Certificate Account to make such Monthly Advance, or (iii) do any
combination of clauses (i) and (ii) to make such Monthly Advance. To the extent
that an Excess Contract Payment (or any portion thereof) that has been applied
pursuant to clause (ii) or (iii) is required for application as to all or a
portion of a scheduled payment due on the related Contract, the Servicer shall
deposit, out of its own funds, the amount of such Excess Contract Payment (or
the portion thereof required for such scheduled payment) into the Certificate
Account on the immediately succeeding Due Date, and the amount so deposited will
become part of the Outstanding Amount Advanced.
(b) The Servicer shall reimburse itself for the Outstanding Amount
Advanced out of (i) collections of delinquent payments of principal and interest
on Contracts as to which the Servicer previously made a Monthly Advance, (ii)
available funds in the Certificate Account attributable to Excess Contract
Payments or (iii) any combination of clauses (i) and (ii) above.
(c) If the Servicer determines that any advance made pursuant to Section
5.01(a) has become a Nonrecoverable Advance and at the time of such
determination there exists an Outstanding Amount Advanced, then the Servicer
shall reimburse itself out of funds in the Certificate Account for the amount of
such Nonrecoverable Advance (but only if there will not be a shortfall in
respect of principal and interest distributions on the Certificates (other than
the Class R Certificates) for the next succeeding Distribution Date) by
withdrawing such amount pursuant to Section 5.03(v), but not in excess of such
Outstanding Amount Advanced. If a Contract becomes a Liquidated Contract and at
such time there exists an Outstanding Amount Advanced, then the Servicer shall
reimburse itself out of funds in the Certificate Account for the portion of
Monthly Advances equal to the aggregate of delinquent scheduled payments on such
Contract to the Due Date in the Collection Period in which such Contract became
a Liquidated Contract, but not in excess of such Outstanding Amount Advanced.
Section 5.02 Payments.
--------
(a) On each Distribution Date, the Trustee shall withdraw from the
Certificate Account an amount equal to the sum of the Available Distribution
Amount and the Reserve Account Draw Amount, if any, for such Distribution Date
and apply such amount, in the following order of priority, to the distribution
of:
(i) to the Class A Certificateholders, the Class A Interest
Distribution Amount;
(ii) to the Class A Certificateholders, the Formula Principal
Distribution until the Class A Certificate Balance has been reduced to
zero;
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(iii) to the Class M Certificateholders, the Class M Interest
Distribution Amount;
(iv) to the Class M Certificateholders, the Formula Principal
Distribution Amount until the Class M Certificate Balance is reduced to
zero;
(v) to the Class B-1 Certificateholders, the Class B-1 Interest
Distribution Amount;
(vi) to the Class B-1 Certificateholders, the Formula Principal
Distribution Amount until the Class B-1 Certificate Balance is reduced to
zero;
(vii) to the Class B-2 Certificateholders, the Class B-2 Interest
Distribution Amount;
(viii) to the Class B-2 Certificateholders, the Formula Principal
Distribution Amount until the Class B-2 Certificate Balance is reduced to
zero;
(ix) to the Reserve Account any remaining Available Distribution
Amount until the amount on deposit therein equals the Reserve Account Cap;
(x) to the Class R Certificateholders, any remaining Available
Distribution Amount.
Furthermore, notwithstanding the foregoing, if the Formula Principal
Distribution Amount allocable to the Holders of the Class A Certificates on any
Distribution Date pursuant to clause (ii) above exceeds the Class A Certificate
Balance for such Distribution Date, such excess will be distributed to the Class
M Certificateholders. If the Formula Principal Distribution Amount allocable to
the Class M Certificateholders on any Distribution Date pursuant to clause (iv)
above exceeds the Class M Certificate Balance for any such Distribution Date,
such excess will be distributed to the Class B-1 Certificateholders. If the
Formula Principal Distribution Amount allocable to the Class B-1
Certificateholders on any Distribution Date pursuant to clause (vi) above
exceeds the Class B-1 Certificate Balance for any such Distribution Date, such
excess will be distributed to the Class B-2 Certificateholders.
Such distributions to the Class A Certificateholders, Class M
Certificateholders, Class B-1 Certificateholders and Class B-2
Certificateholders shall be made such that the Trustee shall distribute (a) to
each Class A Certificateholder as of the preceding Record Date an amount equal
to the product of the aggregate Percentage Interest evidenced by such
Certificateholder's Class A Certificates and the Class A Distribution Amount for
such Distribution Date, (b) to each Class M Certificateholder as of the
preceding Record Date an amount equal to the product of the aggregate Percentage
Interest evidenced by such Certificateholder's Class M Certificates and the
Class M Distribution Amount, (c) to each Class B-1 Certificateholder as of the
preceding Record Date an amount equal to the product of the aggregate Percentage
Interest evidenced by such Certificateholder's Class B-1 Certificates and the
Class B-1 Distribution Amount for such Distribution Date and (d) to each Class
B-2 Certificateholder as of the preceding Record Date an amount equal to the
product of the aggregate Percentage Interest evidenced by such
Certificateholder's Class B-2 Certificates and the Class B-2 Distribution Amount
for such
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Distribution Date. The Trustee shall pay each Certificateholder of record by
check mailed to such Certificateholder at the address for such Certificateholder
appearing on the Certificate Register; provided that if such Certificateholder
--------
holds Certificates evidencing a Percentage Interest aggregating 10% or more with
respect to such Class and has given the Trustee appropriate written instructions
at least 10 days prior to the related Distribution Date (which instructions,
until revised, shall remain operative for all Distribution Dates thereafter),
the Trustee shall pay such Certificateholder by wire transfer of funds. If on
any Determination Date the Servicer determines that there are no Contracts
outstanding and no other funds or assets in the Trust Fund other than the funds
in the Certificate Account, the Servicer promptly shall instruct the Trustee to
send the final distribution notice to each Certificateholder and make provision
for the final distribution in accordance with Section 10.01(c). Final payment of
any Certificate shall be made only upon presentation of such Certificate at the
office or agency of the Certificate Registrar.
(b) On each Distribution Date, the Trustee shall withdraw from the
Certificate Account (solely out of the Available Distribution Amount for such
Distribution Date after giving effect to the distributions made to the
Certificateholders pursuant to Section 5.02(a)(i)-(viii) and to the Reserve
Account pursuant to Section 5.02(a)(ix) on such Distribution Date) and
distribute the amount specified in Section 5.02(a)(x) for such Distribution Date
to the Class R Certificateholders by wire transfer of immediately available
funds. Such distribution shall be made by a means that is mutually acceptable to
the Trustee and the Class R Certificateholders.
(c) Each distribution with respect to a Global Certificate shall be paid
to the Depository, which shall credit the amount of such distribution to the
accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Global Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. Neither the Trustee, the Certificate Registrar, the Contract
Sellers nor the Servicer shall have any responsibility therefor. To the extent
applicable and not contrary to the rules of the Depository, the Trustee shall
comply with the provisions of the forms of the Certificates as set forth in
Exhibit X-0, Xxxxxxx X-0, Xxxxxxx X-0, Exhibit B-4 and Exhibit C (reverse of
---------- ----------- ----------- ----------- ---------
Certificates) hereto.
Section 5.03 Permitted Withdrawals from the Certificate Account.
--------------------------------------------------
The Servicer may, from time to time as provided herein, make withdrawals
from the Certificate Account of amounts deposited therein pursuant to Section
4.05 that are attributable to the Contracts for the following purposes:
(i) to pay to the related Contract Seller with respect to each
Contract sold by it or property acquired in respect thereof that has been
repurchased or replaced pursuant to Section 3.05, all amounts received
thereon that are specified in such Section to be property of such Contract
Seller;
(ii) to reimburse itself for the payment of taxes or charges out of
Liquidation Proceeds (to the extent not previously retained from such
Liquidation Proceeds prior to
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their deposit) or out of payments expressly made by the related Obligor to
reimburse the Servicer for such taxes or charges, as permitted by Section
4.06;
(iii) to pay to itself the Monthly Servicing Fee and Servicer
Deficiency Amounts and Repossession Profits, if any;
(iv) to reimburse itself or a previous Servicer out of Liquidation
Proceeds (to the extent not previously retained from Liquidation Proceeds
prior to their deposit in the Certificate Account) in respect of a
Manufactured Home and out of payments by the related Obligor (to the extent
of payments expressly made by the Obligor to reimburse the Servicer for
insurance premiums) for expenses incurred by it in respect of such
Manufactured Home that are specified as being reimbursable to it pursuant
to Section 4.07, 4.09, or 4.13 or to a previous Servicer under Section
7.07;
(v) to reimburse itself for any Nonrecoverable Advances and for
Monthly Advances in respect of Liquidated Contracts, in each case, in
accordance with Section 5.01(c);
(vi) after the Class A Certificate Balance, Class M Certificate
Balance, Class B-1 Certificate Balance, and Class B-2 Certificate Balance
have been reduced to zero, to reimburse the Servicer and the REMIC
Administrator, pro rata, for expenses incurred and reimbursable to the
Servicer pursuant to Section 7.05 and to the REMIC Administrator pursuant
to Section 4.17(c); and
(vii) to withdraw any amount deposited in the Certificate Account
that was not required to be deposited therein (including any collections on
the Contracts that, pursuant to Section 2.01(a), are not part of the Trust
Fund).
Since, in connection with withdrawals pursuant to clauses (i), (ii) and
(iv) of this Section 5.03, the Servicer's entitlement thereto is limited to
collections or other recoveries on the related Contract, the Servicer shall keep
and maintain separate accounting, on a Contract by Contract basis, for the
purpose of justifying any withdrawal from the Certificate Account pursuant to
such clauses.
Section 5.04 Monthly Reports.
---------------
At least one Business Day prior to each Distribution Date, the Servicer
shall cause the Trustee, the Rating Agencies, each Contract Seller and the
Certificate Administrator to receive a Monthly Report, which report shall
include the following information with respect to the immediately following
Distribution Date:
(a) the Class A Distribution Amount for such Distribution Date;
(b) the amount of principal to be distributed to the Class A
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
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(c) the amount of interest to be distributed to Class A Certificateholders
on such Distribution Date (separately identifying any Class A Unpaid Interest
Shortfall included in such distribution);
(d) the remaining Class A Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(e) the Class M Distribution Amount for such Distribution Date;
(f) the amount of principal to be distributed to the Class M
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
(g) the amount of interest to be distributed to Class M Certificateholders
on such Distribution Date (separately identifying any Class M Unpaid Interest
Shortfall included in such distribution);
(h) the remaining Class M Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(i) the Class B-1 Distribution Amount for such Distribution Date;
(j) the amount of principal to be distributed to the Class B-1
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
(k) the amount of interest to be distributed to Class B-1
Certificateholders on such Distribution Date (separately identifying any
Class B-1 Unpaid Interest Shortfall included in such distribution);
(l) the remaining Class B-1 Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(m) the Class B-2 Distribution Amount for such Distribution Date;
(n) the amount of principal to be distributed to the Class B-2
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
(o) the amount of interest to be distributed to Class B-2
Certificateholders on such Distribution Date (separately identifying any
Class B-2 Unpaid Interest Shortfall included in such distribution);
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(p) the remaining Class B-2 Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(q) the total amount of Monthly Servicing Fee payable on such Distribution
Date, the amount of any reimbursement to the Servicer pursuant to Section 7.05,
and any Late Payment Fees, Extension Fees and assumption fees paid during the
prior Collection Period, and the amount of any other fees payable out of the
Trust Fund;
(r) the number of and aggregate remaining principal balance of Contracts
with payments delinquent 31 to 59, 60 to 89, and 90 or more days, respectively;
(s) the number of Contracts that were repurchased or replaced by the
Contract Sellers in accordance with Section 3.05 during the prior Collection
Period, identifying such Contracts and (i) the Repurchase Price of such
Contracts and (ii) the amount, if any, paid by the Contract Sellers due to the
differences, if any, between the remaining principal balances of the replaced
Contracts and the Eligible Substitute Contracts;
(t) the Pool Factor for the Class A Certificates, Class M Certificates,
Class B-1 Certificates and Class B-2 Certificates after giving effect to the
payment of principal to be made on such Distribution Date;
(u) the aggregate principal balances of all Contracts that are not
Liquidated Contracts and in respect of which the related Manufactured Homes have
been repossessed or foreclosed upon;
(v) the Aggregate Net Liquidation Losses through the Collection Period
immediately preceding such Distribution Date;
(w) the balance, if any, in the Reserve Account (before and after giving
effect to the distributions on such Distribution Date);
(x) the Reserve Account Draw Amount, if any, required to be paid for such
Distribution Date and any withdrawals made from the Reserve Account since the
last Distribution Date pursuant to Section 5.03 (b);
(y) the Average Thirty Day Delinquency Ratio and the Average Sixty Day
Delinquency Ratio for such Distribution Date;
(z) the Cumulative Realized Losses (as a percentage of the Cut-Off Date
Pool Principal Balance) for such Distribution Date;
(aa) the Current Realized Loss Ratio for such Distribution Date;
(bb) the amount of any Monthly Advance and the Outstanding Amount Advanced
with respect to such Distribution Date;
(cc) the amounts, if any, deposited into the Reserve Account for such
Distribution Date;
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(dd) the amount, if any, to be distributed to the Class R
Certificateholders;
(ee) the weighted average Contract Rate for the Contract Pool for the
Collection Period immediately preceding the month of such Distribution Date;
(ff) the number of Manufactured Homes currently held by the Servicer due to
repossessions and the aggregate principal balance of the related defaulted
Contracts; and
(gg) the Pool Scheduled Principal Balance, expressed as a percentage of the
Cut-Off Date Pool Principal Balance.
(hh) the aggregate of the Deficiency Amounts and Servicer Deficiency
Amounts received for the preceding Collection Period.
Copies of all Monthly Reports shall be provided by the Servicer to each
Rating Agency. Neither the Trustee nor the Certificate Administrator shall be
under any duty to recalculate or verify the information provided to it by the
Servicer. The Servicer shall deliver a written notice to the Trustee not later
than three Business Days next preceding a Distribution Date if it cannot provide
the Trustee and the Certificate Administrator with a Monthly Report for such
Distribution Date.
Section 5.05 Certificate of Servicing Officer.
--------------------------------
Each Monthly Report pursuant to Section 5.04 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit F,
---------
certifying the accuracy of the Monthly Report and that such officer is not aware
of the occurrence of an Event of Default or of an event that, with notice or
lapse of time or both, would become an Event of Default, or if such officer is
aware that such an event has occurred and is continuing, specifying the event
and its status.
Section 5.06 Other Data.
----------
In addition, the Servicer, on request of the Trustee, either Contract
Seller or the Certificate Administrator, shall furnish the Trustee or the
Certificate Administrator (as the case may be) such underlying data as may
reasonably be requested.
Section 5.07 Statements to Certificateholders. Concurrently with each
--------------------------------
distribution to Certificateholders pursuant to this Article V, the Trustee shall
mail, or cause the Paying Agent to mail, to each Certificateholder at the
address appearing on the Certificate Register a statement as of the related
Distribution Date prepared by the Servicer setting forth:
(1) the Class A Distribution Amount for such Distribution Date;
(2) the amount of principal to be distributed to the Class A
Certificateholders, separately stating the contribution thereto from each
of the amounts specified in clauses (a) through (e), inclusive, of the
definition of Total Regular Principal Amount and from the amount of clause
(b) of the definition of Formula Principal Distribution Amount;
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(3) the amount of interest to be distributed to Class A Certificateholders
on such Distribution Date (separately identifying any Class A Unpaid Interest
Shortfall included in such distribution);
(4) the remaining Class A Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(5) the Class M Distribution Amount for such Distribution Date;
(6) the amount of principal to be distributed to the Class M
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
(7) the amount of interest to be distributed to Class M Certificateholders
on such Distribution Date (separately identifying any Class M Unpaid Interest
Shortfall included in such distribution);
(8) the remaining Class M Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(9) the Class B-1 Distribution Amount for such Distribution Date;
(10) the amount of principal to be distributed to the Class B-1
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
(11) the amount of interest to be distributed to Class B-1
Certificateholders on such Distribution Date (separately identifying any
Class B-1 Unpaid Interest Shortfall included in such distribution);
(12) the remaining Class B-1 Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(13) the Class B-2 Distribution Amount for such Distribution Date;
(14) the amount of principal to be distributed to the Class B-2
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
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(15) the amount of interest to be distributed to Class B-2
Certificateholders on such Distribution Date (separately identifying any
Class B-2 Unpaid Interest Shortfall included in such distribution);
(16) the remaining Class B-2 Certificate Balance after giving effect
to the payment of principal to be made on such Distribution Date (on which
interest will be calculated on the next succeeding Distribution Date);
(17) the number and aggregate remaining principal balance of Contracts
that are delinquent 31 to 59 days, 60 to 89 days, and 90 or more days,
respectively;
(18) the amount of fees and expenses payable out of the Trust Fund for
such Collection Period;
(19) the percentage obtained by dividing the aggregate Certificate
Balances (after giving effect to the distributions on the Certificates made
on such Distribution Date) by the aggregate Initial Certificate Balances;
(20) the balance in the Reserve Account, if any (before and after
giving effect to the distributions on such Distribution Date);
(21) the Reserve Account Draw Amount, if any, for such Distribution
Date and the amount thereof applied to interest and principal on the Class
A, Class M, Class B-1 and Class B-2 Certificates, stated separately, and
any withdrawals made from the Reserve Account since the last Distribution
Date pursuant to Section 5.03 (b);
(22) the Average Thirty Day Delinquency Ratio and the Average Sixty
Day Delinquency Ratio for such Distribution Date;
(23) the Cumulative Realized Losses (as a percentage of the Cut-Off
Date Pool Principal Balance) for such Distribution Date;
(24) the Current Realized Loss Ratio for such Distribution Date;
(25) the amount of any Monthly Advance and the Outstanding Amount
Advanced with respect to such Distribution Date;
(26) the amounts, if any, to be distributed to the Reserve Account for
such Distribution Date; and
(27) such other customary factual information as is available to the
Servicer as the Servicer deems necessary and can obtain reasonably from its
existing data base to enable Certificateholders to prepare their tax
returns.
In the case of information furnished pursuant to clauses (1) through (16)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
subject to the next sentence, but in no event later than 90 days after the end
of such year, the Servicer shall prepare
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and furnish to the Trustee, the Paying Agent, and the Certificate Administrator,
and the Trustee, promptly upon receipt, shall furnish or cause the Paying Agent
to furnish to each Person who at any time during the calendar year was the
Holder of a Certificate, a statement containing the information set forth in
clauses (2) and (3) above, in the case of Class A Certificateholders, (6) and
(7) above, in the case of Class M Certificateholders, (10) and (11) above, in
the case of Class B-1 Certificateholders and (14) and (15) above, in the case of
Class B-2 Certificateholders, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Code as from time to time in force. On each
Distribution Date, the Servicer shall forward or cause to be forwarded by mail
to each Holder of a Class R Certificate, a copy of the Monthly Report for such
Distribution Date. The Servicer shall also forward or cause to be forwarded by
mail to each Holder of a Class R Certificate, a statement setting forth such
information as the Servicer deems necessary or appropriate.
Within a reasonable period of time after the end of each calendar year, the
Servicer shall furnish or cause to be furnished to each Person who at any time
during the calendar year was a Holder of a Class R Certificate a statement
containing the applicable distribution information provided pursuant to this
Section 5.07 aggregated for such calendar year or applicable portion thereof
during which such Person was a Holder of a Class R Certificate. Such obligation
of the Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Servicer pursuant
to any requirements of the Code. A Certificate Owner holding Certificates of a
Class representing in the aggregate at least 5% of the Percentage Interests of
such Class shall, upon written request to the Trustee certifying its beneficial
ownership of such Certificates, be entitled to receive copies of all reports
provided by the Trustee. Copies of all reports provided by the Trustee to the
Certificateholders shall also be provided to each Rating Agency.
Section 5.08 Reserve Account.
---------------
(a) On the Closing Date, the Trustee shall establish and maintain the
Reserve Account titled "[Trustee] in trust for registered holders of BankAmerica
Manufactured Housing Contract Trust IV, Senior/Subordinate Pass-Through
Certificates, Series 1998-1" as part of the Trust Fund for the benefit of the
Certificateholders as described herein. The Contract Sellers shall cause the
Reserve Account to have an initial balance of $8,954,401.00 on or prior to the
Closing Date. To the extent funds on deposit in the Reserve Account fall below
the Reserve Account Cap, the Reserve Account will be replenished from time to
time in accordance with clause (ix) of Section 5.02(a). On each Distribution
Date, the Trustee, based upon information in the Monthly Report, shall withdraw
the Reserve Account Draw Amount, if any, from the Reserve Account and deposit it
in the Certificate Account. Any Reserve Account Draw Amount shall be applied
pursuant to Section 5.02. After giving effect to the withdrawal of the Reserve
Account Draw Amount, if any, for a Distribution Date, the excess, if any, of the
amount on deposit in the Reserve Account over the Reserve Account Cap shall be
distributed to the Class R Certificateholders.
(b) Amounts held in the Reserve Account shall be invested by the Trustee
in Eligible Investments in the name of the Trustee, as Trustee, maturing, or in
the case of a money market fund redeemable (without premium or penalty) not
later than one Business Day prior to the next succeeding Distribution Date
(except that if such Eligible Investment is an obligation of the
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institution that maintains the Reserve Account, then such Eligible Investment
shall mature, or in the case of a money market fund shall be redeemed, not later
than such Distribution Date) and shall not be sold or disposed of prior to its
maturity. All net income and gain, if any, from any such investments in respect
of a Distribution Date shall be paid to the Holders of the Class R Certificates.
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ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates.
----------------
The Certificates shall be substantially in the forms attached hereto as
Exhibit X-0, Xxxxxxx X-0, Xxxxxxx X-0, Exhibit B-4 and Exhibit C. The Class A,
----------- ----------- ----------- ----------- ---------
Class M, Class B-1 and Class B-2 Certificates shall be issuable in registered
form, in the minimum dollar denominations, integral dollar multiples in excess
thereof (except that one Certificate in each Class may be issued in a different
amount which must be in excess of the applicable minimum dollar denomination)
and aggregate dollar denominations per Class as set forth in the following
table:
Integral
Multiples in Initial Certificate
Excess of Balance
Minimum Latest Scheduled -------------------
Minimum -------------- Distribution Date
Class Denomination -------------------
-------- ---------------
A $ 1,000 $1 June 10, 2019 $734,260,000
M $ 1,000 $1 April 10, 2023 $ 67,158,000
B-1 $ 1,000 $1 August 10, 2025 $ 53,727,000
B-2 $250,000 $1 August 10, 2028 $ 40,295,092.56;
provided, that one Class B-2 Certificate will have a denomination representing
the remainder of the Initial Class B-2 Certificate Balance.
The Class R Certificate shall initially be issued with no principal
balance.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Contract Sellers or any Affiliate thereof.
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The Contract Sellers shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 6.02 Certificate Register; Registration of Transfer and Exchange of
--------------------------------------------------------------
Certificates.
------------
(a) The Trustee shall maintain, or cause to be maintained, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and 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. Upon surrender for registration of
transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in 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
registration of transfer or exchange of Certificates, but 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 may be required.
All Certificates surrendered for registration of transfer or exchange shall
be canceled and subsequently destroyed by the Trustee in accordance with the
Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee, at no expense to
the Trustee, the Contract Sellers or the Servicer, shall be required to provide
to the Trustee, the Contract Sellers and the Servicer, an investment letter
substantially the forms set forth in Exhibit H (the "Transferor Certificate"),
---------
with respect to the Class B-2 Certificates, and either Exhibit J (the
---------
"Investment Letter") or Exhibit K (the "Rule 144A Letter") or as otherwise
---------
acceptable to the Contract Sellers. In the event that such a Transfer is to be
made within two years from the date of the initial issuance of Certificates
pursuant hereto (other than a Transfer as to which the proposed transferee has
provided a Rule 144A Letter), there shall also be delivered to the Trustee, the
Contract Sellers and the Servicer an Opinion of Counsel that such Transfer may
be made pursuant to an exemption from the Securities Act and such state
securities laws, which Opinion of Counsel shall not be an expense of the
Contract Sellers, the Servicer or the Trustee. The Contract Sellers shall
provide to any Holder of Private Certificate and any prospective transferee
designated by any such Holder, information regarding the Certificates and the
Contracts and such other information as shall be necessary to
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satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any Private Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee and
the Servicer shall cooperate with the Contract Sellers in providing the Rule
144A information referenced in the preceding sentence, including providing to
the Contract Sellers such information regarding the Certificates, the Contracts
and other matters regarding the Trust Fund as either Contract Sellers shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Private Certificate desiring to effect such Transfer shall, and does
hereby agree to, indemnify the Trustee, the Contract Sellers and the Servicer
against any liability that may result if the Transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of an ERISA Restricted Certificate will be made unless the
Trustee has received either (i) an Opinion of Counsel, at no expense to the
Trustee, the Contract Sellers or the Servicer, acceptable to and in form and
substance satisfactory to the Trustee, the Contract Sellers and the Servicer
with respect to the permissibility of such transfer under ERISA and Section 4975
of the Code and stating, among other things, that the transferee's acquisition
of such ERISA Restricted Certificate will not constitute or result in a non-
exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code and will not subject the Servicer, the Contract Sellers or the Trustee to
any obligation or liability in addition to those undertaken in this Agreement or
(ii) a representation letter from the transferee, substantially in the form of
paragraph 5 of Exhibit G (as to the Class R Certificates) or Exhibit J or
Exhibit K (as to the Class M, Class B-1 or Class B-2 Certificates).
(c) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to
it, and shall not register the Transfer of any Class R Certificate until
its receipt of, (I) an affidavit and (a "Transfer Affidavit," in the form
attached hereto as Exhibit G-1) from the proposed Transferee, representing
and warranting, among other things, that it is a Permitted Transferee, that
it is not acquiring its Ownership Interest in the Class R Certificate that
is the subject of the proposed Transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Class R Certificate, it will endeavor
to remain a Permitted Transferee, and that it has reviewed the provisions
of this Section 6.02(c) and agrees to be bound by them, and (II) a
certificate, in the form attached hereto as Exhibit G-2, from the Holder
wishing to transfer the Class R
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Certificate, representing and warranting, among other things, that no
purpose of the proposed Transfer is to impede the assessment or collection
of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit by a
proposed Transferee under clause (B) above, if a Responsible Officer of the
Trustee who is assigned to this Agreement has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee
shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall agree (x) to require a Transfer Affidavit from any
other Person to whom such Person attempts to transfer its Ownership
Interest in a Class R Certificate and (y) not to transfer its Ownership
Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class
R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through
interest holder" within the meaning of Temporary Treasury Regulations
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Class R Certificate, if it is, or is holding an Ownership
Interest in a Class R Certificate on behalf of, a "pass-through interest
holder."
(ii) The Trustee will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit, a
certificate of the Holder requesting such transfer in the form attached
hereto as Exhibit G-2. Transfers of the Class R Certificates to Non-United
States Persons and Disqualified Organizations (as defined in Section
860E(e)(5) of the Code) are prohibited.
(iii) (A) If any Disqualified Organization shall become a holder of a
Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a
holder of a Class R Certificate, then the last preceding United States
Person shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such transfer of such Class R Certificate. If a transfer of a Class R
Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the last preceding
Permitted Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. The Trustee
shall be under no liability to any Person for any registration of Transfer
of a Class R Certificate that is in fact not permitted by this Section
6.02(c) or for making any payments due on such Certificate to the holder
thereof or for taking any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this Section 6.02(c) and to
the extent that the retroactive restoration of the rights of the Holder of
such Class R Certificate as described in
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clause (iii)(A) above shall be invalid, illegal or unenforceable, then
either the Servicer shall have the right, without notice to the holder or
any prior holder of such Class R Certificate, to sell such Class R
Certificate to a purchaser selected by the Servicer on such terms as the
Servicer may choose. Such purported Transferee shall promptly endorse and
deliver each Class R Certificate in accordance with the instructions of the
Servicer. Such purchaser may be the Servicer itself or any Affiliate of the
Servicer. The proceeds of such sale, net of the commissions (which may
include commissions payable to the Servicer or its Affiliates), expenses
and taxes due, if any, will be remitted by the Servicer to such purported
Transferee. The terms and conditions of any sale under this clause (iii)(B)
shall be determined in the sole discretion of the Servicer, and the
Servicer shall not be liable to any Person having an Ownership Interest in
a Class R Certificate as a result of its exercise of such discretion.
(iv) The Servicer, on behalf of the Trustee, shall use its reasonable
efforts to make available, upon written request from the Trustee, all
information necessary to compute any tax imposed (A) as a result of the
Transfer of an Ownership Interest in a Class R Certificate to any Person
who is a Disqualified Organization, including the information regarding
"excess inclusions" of such Class R Certificates required to be provided to
the Internal Revenue Service and certain Persons as described in Treasury
Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result
of any regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in Section
1381 of the Code that holds an Ownership Interest in a Class R Certificate
having as among its record holders at any time any Person who is a
Disqualified Organization. Reasonable compensation for providing such
information may be required by the Servicer from such Person.
(v) The provisions of this Section 6.02(c) set forth prior to this
clause (v) may be modified, added to or eliminated pursuant to Section
11.01, provided that there shall have also been delivered to the Trustee
the following:
(A) written notification from each Rating Agency to the effect that
the modification, addition to or elimination of such provisions will not
cause such Rating Agency to downgrade its then-current ratings, if any, of
any Class of the Class A, Class M or Class B below the lower of the then-
current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency; and
(B) a certificate of the Servicer stating that the Servicer has
received an Opinion of Counsel, in form and substance satisfactory to the
Servicer, to the effect that such modification, addition to or absence of
such provisions will not cause Trust Fund to cease to qualify as a REMIC
and will not cause (x) the Trust Fund to be subject to an entity-level tax
caused by the Transfer of any Class R Certificate to a Person that is a
Disqualified Organization or (y) a Certificateholder or another Person to
be subject to a REMIC-related tax caused by the Transfer of a Class R
Certificate to a Person that is not a Permitted Transferee.
The preparation and delivery of all certificates and opinions referred to
above in this Section 6.02 shall not be an expense of the Trust Fund, the
Trustee, the Contract Sellers or the Servicer.
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Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee and the Certificate Administrator, if any, such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 6.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 6.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Trustee under
the terms of this Section 6.03 shall be canceled and destroyed by the Trustee in
accordance with its standard procedures without liability on its part.
Section 6.04 Persons Deemed Owners.
---------------------
The Servicer, the Trustee and any agent of the Servicer or the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee nor any agent of the Servicer or the Trustee shall be affected by any
notice to the contrary.
Section 6.05 Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
If three or more Certificateholders (a) request such information in writing
from the Trustee, (b) state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, and (c) provide a copy of the communication that such
Certificateholders propose to transmit or if the Contract Sellers or Servicer
shall request such information in writing from the Trustee, then the Trustee
shall, within ten Business Days after the receipt of such request, provide the
Contract Sellers, the Servicer or such Certificateholders at such recipients'
expense the most recent list of the Certificateholders of the Trust Fund held by
the Trustee, if any. The Contract Sellers and every Certificateholder, by
receiving and holding a Certificate, agree that the Trustee shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 6.06 Global Certificates.
-------------------
The Class A, Class M and Class B-1 Certificates, upon original issuance,
shall be issued in the form of one or more typewritten Certificates representing
the Global Certificates, to be delivered to the Depository by or on behalf of
the Contract Sellers. Such Global Certificates shall initially be registered on
the Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's
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interest in such Certificates, except as provided in Section 6.08. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Certificate Owners of such Certificates pursuant to Section
6.08:
(a) the provisions of this Section shall be in full force and effect;
(b) Either Contract Seller, the Servicer and the Trustee may treat the
Depository and the Depository Participants for all purposes as the authorized
representative of the respective Certificate Owners of such Certificates and, in
the case of distributions, with the Depository as the authorized representative
of the Depository Participants and the Certificate Owners;
(c) registration of the Global Certificates may not be transferred by the
Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such Certificates
shall be exercised only through the Depository and the Depository Participants
and shall be limited to those established by law and agreements between the
Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued with respect to the Class A, Class M and Class B-1
Certificates pursuant to Section 6.08, the Depository will make book-entry
transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the Certificate Balance of a Class of
Certificates, such direction or consent may be given by Certificate Owners
(acting through the Depository and the Depository Participants) owning Global
Certificates evidencing the requisite percentage of the Certificate Balance or
the requisite Percentage Interests.
Section 6.07 Notices to Depository.
---------------------
Whenever any notice or other communication is required to be given to
Certificateholders of any Class with respect to which Global Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the Depository.
Section 6.08 Definitive Certificates.
-----------------------
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If, after Global Certificates have been issued with respect to Class A,
Class M and Class B-1 Certificates, (a) the Servicer advises the Trustee that
the Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the BAFSB is unable to locate a qualified
successor, (b) BAFSB, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository or (c) after the occurrence and continuation of an Event of Default,
Certificate Owners of such Global Certificates having not less than 51% of the
Voting Rights evidenced by the related Class advise the Trustee and the
Depository in writing through the Depository Participants that the continuation
of a book-entry system with respect to such Certificates through the Depository
(or its successor) is no longer in the best interests of the Certificate Owners
with respect to such Certificates, then the Trustee shall notify all Certificate
Owners of such Class of Certificates, through the Depository, of the occurrence
of any such event and of the availability of Definitive Certificates for such
Class to Certificate Owners requesting the same. The Contract Sellers shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Contract
Sellers or the Servicer nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.
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ARTICLE VII
THE CONTRACT SELLERS AND THE SERVICER
Section 7.01 Liabilities to Obligors.
-----------------------
No liability to any Obligor under any of the Contracts arising out of any
act or omission to act of the Servicer in servicing the Contracts prior to the
Closing Date is intended to be assumed by the Contract Sellers, the Trustee, the
Certificate Administrator or the Certificateholders under or as a result of this
Agreement and the transactions contemplated hereby and, to the maximum extent
permitted and valid under mandatory provisions of law, the Contract Sellers, the
Trustee, the Certificate Administrator and the Certificateholders expressly
disclaim such assumption.
Section 7.02 Servicer's Indemnities.
----------------------
The Servicer shall defend and indemnify the Trust Fund, the Trustee, the
Certificate Administrator, the Certificate Registrar, the Paying Agent, the
Contract Sellers and the Certificateholders against any and all costs, expenses,
losses, damages, claims or liabilities, including reasonable fees and expenses
of counsel and expenses of litigation, arising from third party claims or
actions (including penalties or fees imposed by any governmental or regulatory
body or agency) in respect of any action taken by the Servicer with respect to
any Contract or Manufactured Home constituting a failure by the Servicer to
perform its obligations under this Agreement. This indemnity shall survive any
Event of Default (but a Servicer's obligations under this Section 7.02 shall not
relate to any actions of any subsequent Servicer after an Event of Default) and
any payment of the amount owing under, or any repurchase by the Contract Sellers
of, any such Contract.
Section 7.03 Operation of Indemnities.
------------------------
Indemnification under this Article VII shall include reasonable fees and
expenses of counsel and expenses of litigation. Any amounts received by the
Trustee from the Servicer pursuant to this Article VII shall be deposited in the
Certificate Account pursuant to Section 4.05. If the Servicer has made any
indemnity payments to the Trustee pursuant to this Article VII and the Trustee
thereafter collects any of such amounts from others, the Trustee will repay such
amounts collected to the Servicer, together with any interest collected thereon.
Section 7.04 Merger or Consolidation of the Contract Sellers or the Servicer.
---------------------------------------------------------------
The Contract Sellers and the Servicer will each keep in full effect their
existence, rights and franchises as a national banking association or federal
savings bank, as the case may be, and will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Contracts and
to perform its duties under this Agreement.
Any Person into which the Contract Sellers or the Servicer may be merged or
consolidated, or any corporation or association resulting from any merger,
conversion or consolidation to which the Contract Sellers or the Servicer shall
be a party, or any Person
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succeeding to the business of the Contract Sellers or the Servicer, shall be the
successor of the Contract Sellers or the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
--------
however, that the successor or surviving Person to the Servicer shall satisfy
-------
the requirements of Section 7.07 with respect to the qualifications of a
successor to the Servicer. The Contract Sellers and the Servicer shall promptly
notify each Rating Agency of any such merger to which it is a party.
Section 7.05 Limitation on Liability of the Contract Sellers, the Servicer
-------------------------------------------------------------
and Others.
----------
Neither the Contract Sellers, the Servicer nor any of their directors,
officers, employees or agents shall be under any liability to the Trustee or the
Certificateholders for any errors in judgment or any action taken or for
refraining from the taking of any action, pursuant to this Agreement; provided,
--------
however, that this provision shall not protect the Contract Sellers or any such
-------
Person against any liability that would otherwise be imposed by reason of its
willful misconduct, or gross negligence; provided, further that this provision
-------- -------
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of its willful misconduct or gross
negligence. The Contract Sellers, the Servicer and any of their directors,
officers, employees or agents may rely on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. Neither the Contract Sellers nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which arises under
this Agreement (other than in connection with the enforcement of any Contract in
accordance with this Agreement) and which in its opinion may involve it in any
expenses or liability; provided, however, that the Servicer may in its
-------- -------
discretion undertake any such other legal action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the legal expenses and costs of such other legal action
and any liability resulting therefrom shall be expenses, costs and liabilities
payable from the Certificate Account, and the Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account as provided by Section 5.03.
Section 7.06 Assignment by Servicer.
----------------------
Notwithstanding any provision to the contrary in this Agreement (i) without
the consent of the Trustee or any Certificateholder, the Servicer may, with the
prior written consent of the Contract Sellers, which consent shall not be
unreasonably withheld, assign its rights and delegate its duties and obligations
under this Agreement, including, but not limited to, a purchaser of BAFSB's Bank
America Housing Services division from BAFSB by a third party; provided that the
--------
Person accepting such assignment or delegation shall be a Person which is
satisfactory to the Contract Sellers, in their respective sole judgment, shall
be willing to service the Contracts, and shall execute and deliver to the
Contract Sellers and the Trustee an agreement, in form and substance reasonably
satisfactory to the Contract Sellers, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Servicer under this Agreement; and
further provided that each Rating Agency's rating of any Class of the
------- --------
Certificates in effect immediately prior to such assignment and delegation will
not be withdrawn or reduced as a result of such assignment and delegation, as
evidenced by a letter from each Rating Agency. In the case of any such
assignment and delegation, the Servicer shall be released from its obligations
under this Agreement, except
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that the Servicer shall remain liable for all liabilities and obligations
incurred by it as Servicer hereunder prior to the satisfaction of the conditions
to such assignment and in delegation.
Section 7.07 Successor to the Servicer.
-------------------------
In connection with the termination of the Servicer's responsibilities and
duties under this Agreement pursuant to Section 8.01, the Trustee shall (i)
succeed to and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement (except the duty to pay and indemnify the
Trustee pursuant to Section 9.05 hereof), or (ii) with the consent of the
Contract Sellers, which consent shall not be unreasonably withheld, appoint a
successor which shall have a net worth of not less than $50,000,000 and shall
have serviced for at least one year prior to such appointment a portfolio of not
less than $100,000,000 principal balance of manufactured housing installment
sale contracts or installment loans and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer under
this Agreement prior to the termination of the Servicer's responsibilities,
duties and liabilities under this Agreement (except that the duty to pay and
indemnify the Trustee pursuant to Section 9.05 hereof shall be subject to
negotiation at the time of such appointment). If the Trustee has become the
successor to the Servicer in accordance with this Section 7.07, the Trustee may,
if it shall be unwilling to continue to so act, or shall, if it is unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, a
successor satisfying the requirements set out in clause (ii) above. In
connection with any appointment of a successor Servicer, the Trustee may make
such arrangements for the compensation of such successor out of payments on
Contracts as it and such successor shall agree or such court shall determine;
provided, however, that the Monthly Servicing Fee shall not be in excess of a
-------- -------
monthly amount equal to 1/12th of the product of 1% and the Pool Scheduled
Principal Balance for the Distribution Date in respect of which such
compensation is being paid without the consent of all of the Certificateholders
and notice to each Rating Agency. If the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to Section 7.06
or 8.01, the Servicer shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement, shall cooperate with the Trustee
and any successor Servicer in effecting the termination of the Servicer's
responsibilities and rights hereunder, and shall take no action whatsoever that
might impair or prejudice the rights or financial condition of its successor.
The assignment by a Servicer pursuant to Section 7.06 or removal of Servicer
pursuant to Section 8.01 shall not become effective until a successor shall be
appointed pursuant to this Section 7.07 and shall in no event relieve the
Contract Sellers of liability pursuant to Section 3.05 for breach of the
representations and warranties made pursuant to Section 3.02 or 3.03. The
Servicer being terminated pursuant to Section 8.01 or Section 7.06 shall bear
all costs of a transfer of servicing therefrom, including but not limited to
those of the Trustee reasonably allocable to specific employees and overhead,
legal fees and expenses, and costs of amending the Agreement, if necessary.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
and the Certificates. Any assignment by or termination of the Servicer pursuant
to Section 7.06 or
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8.01 or the termination of this Agreement pursuant to Section 10.01 shall not
affect any claims that the Trustee may have against the Servicer arising prior
to any such termination or resignation.
The Servicer shall timely deliver to the successor the funds in the
Certificate Account and REO Account and all Contract Files, Land Home Contract
Files and related documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as reasonably may be required to more fully and definitely
vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer. Without
limitation, the Trustee is authorized and empowered to execute and deliver on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments (including transfer instruments in respect of certificates
of title and financing statements relating to the Manufactured Homes), and to do
any and all acts or things necessary or appropriate to effect the purposes of
such notice of termination.
Upon a successor's acceptance of appointment as such, the Trustee shall
notify in writing the Certificateholders and each Rating Agency of such
appointment.
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ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01 Events of Default.
-----------------
In case one or more of the following Events of Default shall occur and be
continuing, that is to say:
(a) any failure by the Servicer to make any deposit or payment, or to
remit to the Trustee any payment, required to be made under the terms of this
Agreement which continues unremedied for a period of five days after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or the Contract Sellers or
to the Servicer, the Trustee and the Contract Sellers by the Holders of
Certificates evidencing Fractional Interests aggregating not less than 25%; or
(b) failure on the part of the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement, including the failure to deliver a Monthly
Report, which continues unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee or the Contract Sellers or to the
Servicer, the Trustee and the Contract Sellers by the Holders of Certificates
evidencing Fractional Interests aggregating not less than 25%; or
(c) a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any present or future
federal or state bankruptcy, insolvency or similar law or appointing a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the winding-
up or liquidation of its affairs, shall have been entered against the Servicer,
and such decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of the Servicer's property; or
(e) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations or
take any corporate action in furtherance of the foregoing;
then, and in each and every such case, so long as such Event of Default shall
not have been cured or waived, the Trustee may, and, the Trustee shall at the
written direction of the Holders of Certificates evidencing Fractional Interests
aggregating not less than 51% by notice in writing to the Servicer, terminate
all the rights and obligations of the Servicer under this Agreement and in and
to the Contracts and the proceeds thereof, except any responsibility for its
acts or omissions during its tenure as Servicer hereunder. The Trustee shall
send a copy of a notice of any Event of Default to each Rating Agency and the
Contract Sellers. On or after the receipt by the Servicer of
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such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Contracts or otherwise, shall pass to and
be vested in the successor appointed pursuant to Section 7.07. Upon the
occurrence of an Event of Default which shall not have been remedied, the
Trustee may also pursue whatever rights it may have at law or in equity to
damages, including injunctive relief and specific performance. The Trustee will
have no obligation to take any action or institute, conduct or defend any
litigation under this Agreement at the request, order or direction of any of the
Certificateholders unless such Certificateholders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which the Trustee may incur.
Section 8.02 Waiver of Defaults.
------------------
The Holders of Certificates evidencing Fractional Interests aggregating not
less than 25% may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except that a default in the making
of any required remittance to the Trustee for distribution on any of the
Certificates may be waived only by the affected Certificateholders. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 8.03 Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time the Servicer receives a notice of termination
pursuant to Section 8.01, the Trustee or its appointed agent shall be the
successor in all respects to the Servicer as provided in Section 7.07 hereof.
Notwithstanding the above, or anything in Section 7.07 to the contrary, the
Trustee, if it becomes Servicer pursuant to this Section, shall have no
responsibility or obligation (i) to repurchase or substitute any Contract, (ii)
for any representation or warranty of the Servicer hereunder, and (iii) for any
act or omission of either a predecessor or successor Servicer other than the
Trustee. The Trustee may conduct any activity required of it as Servicer
hereunder through an Affiliate or through an agent. Neither the Trustee nor any
other successor Servicer shall be deemed to be in default hereunder due to any
act or omission of a predecessor Servicer, including but not limited to failure
to timely deliver to the Trustee any Monthly Report, any funds required to be
deposited to the Trust Fund, or any breach of its duty to cooperate with a
transfer of servicing as required by Section 7.07.
Section 8.04 Notification to Certificateholders.
----------------------------------
(a) Upon any such termination pursuant to Section 8.01, the Trustee shall
give prompt written notice thereof to the Contract Sellers, the
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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Section 8.05 Effect of Transfer.
------------------
(a) After a transfer of servicing duties to a successor Servicer pursuant
to Section 7.04, 7.06, 7.07 or 8.01, the Trustee or the successor Servicer may
notify Obligors to make payments that are due under the Contracts after the
effective date of the transfer of servicing duties directly to the successor
Servicer.
(b) After the transfer of servicing duties to a successor Servicer
pursuant to Section 7.04, 7.06, 7.07 or 8.01, the replaced Servicer shall have
no further obligations with respect to the management, administration, servicing
or collection of the Contracts, but in the case of a transfer pursuant to
Section 7.07 or 8.01 shall remain liable for any liability arising from the
replaced Servicer's actions hereunder and shall remain entitled to any
compensation due the replaced Servicer that had already accrued prior to such
transfer.
(c) A transfer of servicing duties to a successor Servicer shall not
affect the rights and duties of the parties hereunder (including but not limited
to the indemnities of the Servicer pursuant to Article VII), other than those
relating to the management, administration, servicing or collection of the
Contracts.
Section 8.06 Transfer of the Accounts.
------------------------
Notwithstanding the provisions of Section 8.01, if the Certificate Account
shall be maintained with the Servicer or an Affiliate of the Servicer and an
Event of Default shall occur and be continuing, the Servicer, after five days'
written notice from the Trustee, or in any event within ten days after the
occurrence of the Event of Default, shall establish a new account, which shall
be an Eligible Account, conforming with the requirements of this Agreement, at
the trust department of the Trustee or with a depository institution other than
the Servicer or an Affiliate of the Servicer, and shall promptly transfer all
funds in the Certificate Account to such new Certificate Account, which shall
thereafter be deemed the Certificate Account for the purposes hereof.
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ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01 Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred, undertakes
to perform such duties and only such duties as are set forth specifically in
this Agreement. In case an Event of Default has occurred of which a Responsible
Officer has knowledge (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Agreement and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs,
unless it is acting as Servicer pursuant to Section 8.03 in which case it will
use the same degree of care and skill as the Servicer.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are required specifically to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct; provided, however, that:
-------- -------
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may rely
conclusively, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable personally for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable personally with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Certificates evidencing
Fractional Interests aggregating not less than 25% as to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Agreement.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties as Trustee hereunder or in the
exercise of any of its rights or powers if there is reasonable
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ground for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
The Trustee shall have no liability for any loss on any Eligible Investment
except and only to the extent that it is an Obligor thereon.
Section 9.02 Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 9.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel, and any written advice of its
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 advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(d) The Trustee shall not be liable personally for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the computations, facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, any Monthly Report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by the Holders of
Certificates evidencing Fractional Interests aggregating not less than 25%;
provided, however, that if the payment within a reasonable time to the Trustee
-------- -------
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholders requesting
the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys; provided, however, that any
-------- -------
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Affiliate of the Contract Sellers may only perform ministerial or custodial
duties hereunder as agent for the Trustee; and
(g) The Trustee shall examine any directions, notices or other
communications received from the Servicer, the Contract Sellers or any
Certificateholder (or agent thereof) to determine if such directions, notices or
other communications appear on their face to have been made and to otherwise be
in accordance with the requirements of this Agreement. As long as the Trustee
has acted in good faith and has not been negligent in making determinations
required by this Section 9.02(g), the Trustee may conclusively rely on such
directions, notices or other communications and shall incur no liability
hereunder for complying with, or assuming the truth of the statements contained
in, any such direction, notice or other communication.
Section 9.03 Trustee not Liable for Certificates or Contracts.
------------------------------------------------
The recitals contained herein and in the Certificates (other than the
authentication of the Certificates) shall be taken as the statements of the
Contract Sellers or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement, of the
Certificates (except that the Certificates shall be duly and validly
authenticated by it) or of any Contract or related document. The Trustee shall
not be accountable for the use or application by the Contract Sellers or the
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Contract Sellers or the
Servicer in respect of the Contracts or deposited in or withdrawn from the
Certificate Account by the Contract Sellers or the Servicer.
Section 9.04 Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates and may transact business with the other parties hereto
with the same rights it would have if it were not Trustee.
Section 9.05 Servicer to Pay Fees and Expenses of Trustee, Paying Agent and
--------------------------------------------------------------
Certificate Administrator.
-------------------------
The Servicer covenants and agrees to pay, from its own funds, to the
Trustee, the Paying Agent and the Certificate Administrator from time to time,
and the Trustee, the Paying Agent and the Certificate Administrator shall each
be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trust hereby created and
in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and the Servicer will pay (out of its own funds) or reimburse the
Trustee, the Paying Agent and the Certificate Administrator, to the extent
requested by the Trustee, the Paying Agent or the Certificate Administrator, as
the case may be, for all reasonable expenses, disbursements and advances
incurred or made by the Trustee, the Paying Agent or the Certificate
Administrator, as the case may be, in accordance with any of the provisions of
this Agreement, and the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ, and
the expenses incurred by the Trustee in connection with the appointment of an
office or agency pursuant to Section 9.11, except any such expense, disbursement
or advance as
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may arise from its negligence or bad faith. The Servicer also covenants and
agrees to indemnify (out of its own funds) the Trustee, the Paying Agent and the
Certificate Administrator for, and to hold each of them harmless against, any
loss, liability or expense incurred without negligence or bad faith on the part
of the Trustee, the Paying Agent or the Certificate Administrator, as the case
may be, arising out of or in connection with the acceptance or administration of
this trust and its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The covenants in this
Section 9.05 shall b for the benefit of the Trustee, the Paying Agent and the
Certificate Administrator in their respective capacities as Trustee, Certificate
Administrator, Paying Agent and Certificate Registrar hereunder, and shall
survive the termination of this Agreement.
Section 9.06 Eligibility Requirements for Trustee.
------------------------------------
There shall at all times be a Trustee hereunder which shall be qualified to
maintain an Eligible Account and shall be either (a) The First National Bank of
Chicago ("First National") or any other Person into which First National is
merged or consolidated or to which substantially all of the properties and
assets of First National are transferred as an entirety, provided that such
--------
other Person has accepted appointment as Trustee under this Agreement in
accordance with this Article IX, and further provided that such entity is not an
------- --------
Affiliate of the Contract Sellers, is authorized to exercise corporate trust
powers under the laws of the United States of America, any State thereof or the
District of Columbia and has all necessary trust powers to perform its
obligations hereunder, or (b) a corporation or banking association organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal or State authority, and which
is not an Affiliate of the Contract Sellers; further provided that either (i)
------- --------
such entity has long-term debt rated at least A3 by Xxxxx'x or the equivalent by
any nationally recognized statistical rating organization, or (ii) each Rating
Agency provides a letter to the effect that such appointment will not affect the
then current ratings of the Certificates. If the corporation or banking
association referred to in clause (b) of the previous sentence publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 9.06,
the combined capital and surplus of such corporation or banking association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In addition, the Trustee shall
maintain an office in New York. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.06, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article IX.
Section 9.07 Resignation and Removal of the Trustee.
--------------------------------------
The Trustee at any time may resign and be discharged from the trusts hereby
created by giving written notice thereof to the Contract Sellers, the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Contract
Sellers shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of
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resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 9.06 and shall fail to resign after written request
therefor by the Contract Sellers, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Contract
Sellers may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee and the
Certificateholders.
The Holders of Certificates evidencing Fractional Interests aggregating not
less than 50% may remove the Trustee at any time and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such
Certificateholders or their attorneys-in-fact duly authorized, one complete set
of which instruments shall be delivered to the Contract Sellers, one complete
set to the Trustee so removed and one complete set to the successor so
appointed.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 9.07 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 9.08.
Section 9.08 Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 9.07 shall execute,
acknowledge and deliver to the Contract Sellers and to its predecessor trustee,
with a copy to the Servicer, an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor trustee and the
appointment of such successor trustee shall become effective, and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
predecessor trustee shall execute and deliver such instruments and do such other
things as reasonably may be required to more fully and certainly vest and
confirm in the successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept appointment as provided in this Section
9.08 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor trustee as provided in this
Section 9.08, the Servicer shall mail notice of the succession of such trustee
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register, to the Contract Sellers and each Rating Agency. If the
Servicer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Contract Sellers.
Section 9.09 Merger or Consolidation of Trustee.
----------------------------------
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Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be eligible under the
--------
provisions of Section 9.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. Upon succession of a successor trustee as provided in
this Section 9.09, the successor Trustee shall mail notice of the succession of
such trustee hereunder to all Certificateholders at their addresses as shown in
the Certificate Register, to the Servicer, the Contract Sellers and each Rating
Agency.
Section 9.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions hereof, at any time, for the purpose
of (i) meeting any legal requirements of any jurisdiction in which any part of
the Trust Fund or property securing the same may be located at the time, or (ii)
meeting any legal requirements with respect to the holding of the Contracts, the
Contract Sellers and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
9.10, such powers, duties, obligations, rights and trusts as the Contract
Sellers and the Trustee may consider necessary or desirable. If either or the
Contract Sellers shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default shall
have occurred and be continuing, the Trustee alone (or with the applicable
Contract Seller) shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 9.06 hereunder, and no notice to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 9.08 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 9.10, 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 or under any regulation applicable to any of the
Contracts (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or co-
trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of
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this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
Any separate trustee or co-trustee may, at any time, appoint the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Nothing in this Section 9.10 shall relieve the Trustee of
its duties, obligations or liabilities under this Agreement.
Section 9.11 Appointment of Office or Agency.
-------------------------------
The Trustee will appoint an office or agency in the City of New York where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates Chicago Trust Company of New York, located at 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, for such purpose. The Certificate Register
will be kept in Chicago, Illinois at the offices of the Certificate Registrar
located at the Corporate Trust Office and may be kept in an electronic form
capable of printing out a hard copy of the Certificate Register. The Trustee
will maintain an office at the address stated in Section 11.05 hereof where
notices and demands to or upon the Trustee in respect of the Certificates may be
served. The Trustee will give prompt written notice to Certificateholders of
any change in the location of the Certificate Register or any such office or
agency.
Section 9.12 Certificate Administrator.
-------------------------
The Trustee may, from time to time, appoint a Certificate Administrator for
the purpose of performing, as the Trustee's agent, those duties hereunder that
are specifically designated herein as performable by the Certificate
Administrator; provided, however, that the Certificate Administrator shall at
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all times satisfy the eligibility requirements of a Trustee set forth in Section
9.06. As of the Closing Date, the Trustee shall be the Certificate
Administrator unless and until the Trustee appoints a successor Certificate
Administrator. In performing its duties hereunder, the Certificate
Administrator (if not the Trustee) shall have the benefit of the provisions of
this Agreement to the same extent that the Trustee would have the benefit of
such provisions if the Trustee were itself performing such duties. The
Certificate Administrator (including the Trustee solely in its capacity as
Certificate Administrator) shall not have any fiduciary responsibility to the
Contract Sellers, the Servicer or the Certificateholders except when acting as
Paying Agent. Additionally, the Certificate Administrator shall be entitled to
rely upon all directions, calculations and other information received by the
Contract Sellers, the Trustee or the Servicer without any duty to independently
verify such directions, calculations or other information.
Section 9.13 Appointment of Paying Agent.
---------------------------
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 5.02 and payments
pursuant to 3.17 and 9.01(c). Any Paying Agent or its parent company so
appointed either shall be a bank or trust company and shall have a rating
acceptable to each Rating Agency. In the event of any such appointment, on or
prior to each Distribution Date, the Trustee shall deposit or cause to be
deposited with the Paying
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Agent, from amounts in the Certificate Account, a sum sufficient to make the
payments to Certificateholders in the amounts and in the manner provided for in
Section 5.02, such sum to be held in trust for the benefit of the
Certificateholders. The Trustee is hereby initially appointed as Paying Agent.
In performing its duties hereunder, the Paying Agent shall have the benefit
of the provisions of this Agreement to the same extent that the Trustee would
have the benefit of such provisions if the Trustee were itself performing such
duties. Additionally, the Paying Agent shall be entitled to rely upon all
information received from the Servicer without any duty to independently verify
or recalculate any such information.
The Trustee shall cause the 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 is at all times acting as agent for the Trustee and such
Paying Agent will hold all sums held by it for the payment to Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders.
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ARTICLE X
TERMINATION
Section 10.01 Termination.
-----------
(a) The respective obligations and responsibilities of the Contract
Sellers, the Servicer (except as to Section 9.05) and the Trustee shall
terminate upon the earlier of: (i) the final payment or other liquidation (or
any advance with respect thereto) of the last Contract or the disposition of all
property acquired upon repossession of any Contract and the remittance of all
funds due hereunder; (ii) at the option of the Servicer, on any Distribution
Date after the first Distribution Date on which the Pool Scheduled Principal
Balance is less than 10% of the Cut-Off Date Pool Principal Balance and subject
to the prior consummation of the Termination Auction as contemplated pursuant to
Section 10.01(b) below, upon the purchase by the Servicer of the Outstanding
Contracts at a price equal to the greater of (a) the sum of (x) 100% of the
Scheduled Principal Balance of each Contract (other than any Contract as to
which the related Manufactured Home has been acquired and not yet disposed of
and whose fair market value is included pursuant to Clause (y) below) as of the
final Distribution Date, and (y) the fair market value of such acquired property
(as determined by the Servicer as of the close of business on the third Business
Day next preceding the date upon which notice of any such termination is
furnished to Certificateholders pursuant to Section 10.01(c)(i)), and (b) the
aggregate fair market value (as determined by the Servicer as of the close of
business on such third Business Day) of all the assets in the Trust Fund, plus,
in the case of both clause (a) and clause (b), an amount sufficient to pay any
Class A Unpaid Interest Shortfall, Class M Unpaid Interest Shortfall, Class B-1
Unpaid Interest Shortfall and any Class B-2 Unpaid Interest Shortfall and the
remittance of all funds due hereunder; provided, that the purchase price of such
--------
Contracts shall in no event be less than the Minimum Termination Amount (without
regard to amounts on deposit in the Reserve Account) as of the Distribution Date
on which the Servicer purchases such Contracts; or (iii) the sale of all
Contracts that remain outstanding, pursuant to a Termination Auction as
contemplated by Section 10.01(b) below and the remittance of all funds due
hereunder. Notwithstanding anything herein to the contrary, in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the court of St. Xxxxx, living on the date
hereof.
(b) Termination Auction. The Servicer shall provide written notice to the
-------------------
Trustee of the occurrence of the Distribution Date as of which the Pool
Scheduled Principal Balance is less than 10% of the Cut-Off Date Pool Principal
Balance within three Business Days following such Distribution Date. Thereupon,
the Trustee shall in accordance with the procedures and schedule set forth in
Exhibit L hereto (the "Auction Procedures"), make a commercially reasonable
---------
effort to sell at fair market value in a commercially reasonable manner and upon
commercially reasonable terms but subject to the earlier purchase by the
Servicer of the Outstanding Contracts as provided in Section 10.01(a) above, by
conducting an auction (the "Termination Auction") of the Contracts remaining in
the Trust Fund in order to effect a termination of the Trust Fund on a date
selected by the Trustee (the "Auction Date"), but in any case within ninety days
following the Distribution Date as of which the Pool Scheduled Principal Balance
is less than 10% of the Cut-Off Date Pool Principal Balance. Either Contract
Seller (and the Servicer if BAFSB is not the Servicer) may, but shall not be
required to, bid at the Termination Auction. The Trustee shall be entitled to
retain counsel of its choice to represent it in the Termination Auction, and the
fees and
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expenses of such counsel shall be paid by the Contract Sellers. The Trustee
shall sell and transfer the Contracts to the highest bidder therefor at the
Termination Auction provided that:
(1) the Termination Auction has been conducted in accordance with the
Auction Procedures;
(2) the Trustee has received good faith bids for the Contracts from at
least two prospective purchasers that are considered by the Trustee, in its
sole discretion, to be competitive participants in the market for
Manufactured housing installment sale contracts; provided, that at least
--------
one of such prospective purchasers shall not be an Affiliate of either of
the Contract Sellers;
(3) a financial advisor selected by the Trustee, the fees of whom
shall be an expense of the Contract Sellers, as advisor to the Trustee (in
such capacity, the "Advisor"), shall have advised the Trustee in writing
that at least two of such bidders are participants in the market for
manufactured housing retail installment sale contracts and are willing and
able to purchase the Contracts (the Trustee may in its discretion select
itself or an affiliate thereof as Advisor);
(4) the highest bid in respect of the Contracts is not less than the
aggregate fair market value of the Contracts (as determined by the Trustee
in its sole discretion);
(5) any bid submitted by the any Contract Seller or any Affiliate of
either of them shall be independently verified and represented in writing
by a qualified independent third party evaluator (which may include the
Advisor or an investment banking firm) selected by the Trustee and may only
be considered if such evaluator determines that the bid reasonably
represents the fair market value of the Contracts;
(6) the highest bid would result in proceeds from the sale of the
Contracts which will be at least equal to the Minimum Termination Amount
(without regard to amounts on deposit in the Reserve Account);
(7) such sale and consequent termination of the Trust Fund must
constitute a "qualified liquidation" of the Trust Fund under Section 860F
of the Code, including the requirement that the proceeds of such qualified
liquidation are credited or distributed to the holders of regular residual
interests within 90 days from the date upon which the Trust Fund adopts a
plan of complete liquidation (the Trustee may, in its discretion, require
that the purchaser of such Contracts provide an Opinion of Counsel to that
effect); and
(8) the terms of the Termination Auction must be made available to all
bidders and must stipulate that the Servicer be retained to service the
Contracts on terms substantially similar to those in this Agreement.
Provided that all of the conditions set forth in clauses (1) through (8)
have been met, the Trustee shall sell and transfer the Contracts, without
representation, warranty or recourse of any kind whatsoever, to such highest
bidder in accordance with and upon completion of the Auction Procedures. The
Trustee shall deposit the purchase price for the Contracts in the Certificate
Account at least one Business Day prior to the fourth Distribution Date
following the Distribution
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Date as of which the Pool Scheduled Principal Balance is less than 10% of the
Cut-Off Date Pool Principal Balance. The provisions of subsections (c) and (d)
of this Section 10.01 also shall apply with respect to any Termination Auction.
In the event that any of such conditions are not met or such highest bidder
fails or refuses to comply with any of the Auction Procedures, the Trustee shall
decline to consummate such sale and transfer. In such case the Termination
Auction shall be concluded and the Trustee shall be under no further duty to
solicit bids for or otherwise to attempt to sell the Contracts.
(c) (i) Notice of any termination, specifying the Distribution Date upon
which all Certificateholders may surrender their Certificates to the Trustee for
payment and cancellation, shall be given promptly by the Servicer by letter to
the Certificateholders, the Trustee, the Contract Sellers and each Rating Agency
mailed no later than the 10th day of the month next preceding the month of such
final distribution, specifying (i) the Distribution Date upon which final
payment on the Certificates will be made upon presentation and surrender of
Certificates at the office or agency of the Trustee therein designated, (ii) the
amount of any such final payment, and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified. After giving such notice, the Trustee shall not
register the transfer or exchange of any Certificates. If such notice is given
in connection with the Servicer's election to purchase, the Servicer shall
deposit in the Certificate Account on the Business Day prior to the applicable
Distribution Date the amount described in Section 10.01(a)(ii). The amount so
deposited shall not be invested.
(ii) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed, from funds in the Certificate Account, to
Certificateholders, in proportion to their respective Percentage Interests,
an amount equal to (a) as to the Class A Certificates, the Class A
Certificate Balance together with the Class A Unpaid Interest Shortfall and
one month's interest at the Class A Pass-Through Rate on the Class A
Certificate Balance, (b) as to the Class M Certificates, the Class M
Certificate Balance together with the Class M Unpaid Interest Shortfall and
one month's interest at the Class M Pass-Through Rate on the Class M
Certificate Balance, (c) as to the Class B-1 Certificates, the Class B-1
Certificate Balance together with the Class B-1 Unpaid Interest Shortfall
and one month's interest at the Class B-1 Pass-Through Rate on the
Class B-1 Certificate Balance and (d) as to the Class B-2 Certificates,
the Class B-2 Certificate Balance together with the Class B-2 Unpaid
Interest Shortfall and one month's interest at the Class B-2 Pass-Through
Rate on the Class B-2 Certificate Balance.
(iii) Upon such termination, any amounts remaining in the Certificate
Account and the Reserve Account (other than amounts retained to meet
claims) shall be paid to the Class R Certificateholders. Following such
final deposit, the Servicer shall prepare and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate
such transfer. The distribution on the final Distribution Date shall be in
lieu of the distribution otherwise required to be made on such Distribution
Date in respect of the Certificates and the Class R Certificate.
(d) If any Certificateholder does not surrender its Certificate for
cancellation by the final Distribution Date specified in the written notice
required in Section 10.01(c)(i), any amounts retained in the Certificate Account
that are owed to such Certificateholder shall be withdrawn
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from the Certificate Account and held in an escrow account with the Trustee
pending distribution pursuant to this Section 10.01(d). Any amounts so held
shall not be invested. The Trustee shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within two years
after the second notice all the Certificates shall not have been surrendered for
cancellation, the Trustee shall so notify the Contract Sellers and the Contract
Sellers may take appropriate steps, or may appoint an agent to take appropriate
and reasonable steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of, and
only to the extent of, the funds and other assets which remain in trust
hereunder.
Upon any termination pursuant to the exercise of the purchase option
contained in Section 10.01(a)(ii), the consummation of a sale pursuant to a
Termination Auction or otherwise, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
received an Opinion of Counsel to the effect that the failure of the Trust Fund
to comply with the requirements of this Section 10.01 will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as described
in Section 860F of the Code, (ii) cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding, or (iii) result in the
imposition of taxes on contributions of additional assets to the Trust Fund
under Section 860G(d) of the Code:
(i) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Servicer or the Trustee under this Section 10.01,
the Holders of the Class R Certificates shall adopt a plan of complete
liquidation of the Trust Fund;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Servicer as
agent of the Trustee shall sell all of the assets of the Trust Fund to the
purchaser thereof (which may be the Servicer) for cash (other than assets
that will be converted to cash prior to the final Distribution Date); and
(iii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall credit or distribute all proceeds of the liquidation (plus the cash),
less assets retained to meet claims, to the Certificateholders.
By its acceptance of a Class R Certificate, each Holder thereof hereby agrees to
adopt such a plan of complete liquidation upon the written request of the
Servicer and to take such other action in connection therewith as may be
reasonably requested by the Contract Sellers.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
---------
This Agreement may be amended from time to time by the Contract Sellers,
the Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein, (iii) to add to the duties or obligations of the Servicer,
(iv) to obtain a rating from a nationally recognized rating agency or to
maintain or improve the ratings of any Class of Certificates by each Rating
Agency (it being understood that after obtaining ratings for the Certificates
from Moody's and Fitch, none of the Trustee, the Contract Sellers or the
Servicer is obligated to obtain, maintain or improve any rating assigned to the
Certificates) or (v) to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein; provided that such action shall not, as evidenced by an
--------
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder. Notwithstanding the foregoing, without the consent of the
Certificateholders, the Trustee, the Contract Sellers and the Servicer may at
any time and from time to time amend this Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary or appropriate to
maintain the qualification of the Trust Fund as a REMIC under the Code or to
avoid or minimize the risk of the imposition of any tax on the Trust Fund
pursuant to the Code that would be a claim against the Trust Fund at any time
prior to the final redemption of the Certificates, provided that the Trustee has
been provided an Opinion of Counsel, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee, to the effect that such action is necessary or appropriate to maintain
such qualification or to avoid or minimize the risk of the imposition of such a
tax.
This Agreement may also be amended from time to time by the Contract
Sellers, the Servicer and the Trustee with the consent of the Holders of a
Majority In Interest of each Class of Regular Certificates affected thereby for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Holders of Certificates; provided, however, that no such amendment shall
-------- -------
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating 66% or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
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Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
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.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 11.01.
Section 11.02 Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Contracts are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this 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 constitute but one and the same
instrument.
Section 11.03 Governing Law
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 11.04 Calculations
------------
Except as otherwise provided in this Agreement, all Pass-Through Rate,
interest rate and basis point calculations under this Agreement will be made
with respect to each Class of Regular Certificates on the basis of a 360-day
year and twelve thirty-day months and will be carried out to at least three
decimal places. Interest on the Regular Certificates with respect to a
Distribution Date will accrue during the related Interest Accrual Period.
Section 11.05 Notices
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(a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor or any assignment of this Agreement pursuant to
Section 7.06;
4. The repurchase or substitution of Contracts pursuant to Section
3.05;
5. The final payment to Certificateholders;
6. A sale of any Class R Certificate; and
7. Any shortfalls arising from the failure of the Servicer to advance
as required pursuant to Section 5.01 hereof.
In addition, the Servicer shall promptly furnish to each Rating Agency
copies of the following:
1. Each report to Certificateholders described in Section 5.07;
2. Each annual statement as to compliance described in Section 4.20;
and
3. Each annual independent public accountants' servicing report
described in Section 4.21
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Contract Sellers: Bank of America National Trust and Savings Association, 000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 9410410089, Attention: Xxxx
Xxxxx or such other address as the Contract Sellers may hereafter furnish to the
Trustee and the Servicer (b) in the case of the Servicer: Bank of America, FSB,
c/o BankAmerica Housing Services, 00000 Xxxxxx Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, Attention: Manager, Investor Servicing (or such other address as may be
hereafter furnished to the Contract Sellers and the Trustee by the Servicer in
writing), with copies to Xxxxx Xxxxxxx, Esq., Bank of America National Trust and
Savings Association, 00000 Xxx Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 and to
Xxxxxxx Xxxxx, Bank of America, National Trust and Savings Association, 000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, (c) in the case of the
Trustee, The First National Bank of Chicago, or such other address as the
Trustee may hereafter furnish to the Contract Sellers and the Servicer; and (d)
in the case of the Rating Agencies, (i) Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) Fitch IBCA, Inc., Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Notices to Certificateholders shall be
deemed given when mailed, first class postage prepaid, to their respective
addresses appearing in the Certificate Register.
Section 11.06 Severability of Provisions
--------------------------
-95-
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Assignment.
----------
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Sections 7.04 and 7.06, this Agreement may not be assigned
by the Servicer without the prior written consent of the Trustee and the
Contract Sellers.
Section 11.08 Limitation on Rights of Certificateholders.
------------------------------------------
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or 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 provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
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 or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.09 Inspection and Audit Rights.
---------------------------
-96-
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Contract Sellers or the Trustee during the Servicer's
normal business hours, to examine all the books of account, records, reports and
other papers of the Servicer relating to the Contracts, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Contract Sellers or the Trustee and to
discuss its affairs, finances and accounts relating to the Contracts with its
officers, employees and independent public accountants (and by this provision
the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Contract Sellers or the Trustee of any right
under this Section 11.09 shall be borne by the party requesting such inspection;
all other such expenses shall be borne by the Servicer.
Section 11.10 Certificates Nonassessable and Fully Paid.
-----------------------------------------
It is the intention of the Contract Sellers that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 11.11 Official Record.
---------------
The Contract Sellers agree that this Agreement is and shall remain at all
times prior to the time at which this Agreement terminates an official record of
BAFSB as referred to in Section 13(e) of the Federal Deposit Insurance Act, as
amended by 12 U.S.C. Section 1823(e). The officer signing below on behalf of
BAFSB represents that by so signing he or she is an officer of BAFSB of the
level of vice president or higher within the meaning of the "Policy Statement
Regarding Qualified Financial Contracts" dated December 12, 1989 issued by the
FDIC.
-97-
IN WITNESS WHEREOF, the Contract Sellers, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as
Trustee
By: /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
as Contract Seller
By: /s/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
BANK OF AMERICA, FSB,
as Servicer and Contract Seller
By: /s/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Treasurer
-98-
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN FRANCISCO )
On March 25, 1998 before me, Xxxxxxx Xxxxxxxx, Notary Public, personally
appeared Xxxxx X. Xxxxxxx, proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity and that by his
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxxx Xxxxxxxx
-------------------------------
Notary Public
My Commission expires August 23, 1999
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN FRANCISCO )
On March 25, 1998 before me, Xxxxxxx Xxxxxxxx, Notary Public, personally
appeared Xxxxx X. Xxxxxxx, proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity and that by his
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxxxx Xxxxxxxx
-------------------------------
Notary Public
My Commission expires August 23, 1999
[Notarial Seal]
STATE OF ILLINOIS )
) ss.
COUNTY OF XXXX )
On this __th day of March, 1998, before me, a notary public in and for said
State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President, of The First National Bank of
Chicago, a national banking association that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation,
and acknowledged to me that such national banking association executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ XXXX X. Xxxxxxxx
------------------------------
Notary Public
My Commission expires 09/08/01
[Notarial Seal]
EXHIBIT INDEX
-------------
Exhibit A...........Contract Schedule
Exhibit B-1.........Form of Class A Certificate
Exhibit B-2.........Form of Class M Certificate
Exhibit B-3.........Form of Class B-1 Certificate
Exhibit B-4.........Form of Class B-2 Certificate
Exhibit C...........Form of Reverse of Certificates
Exhibit D...........Class R Certificate
Exhibit E Form of Certificate Regarding Substitution of Eligible
Substitute Contract
Exhibit F...........Form of Certificate of Servicing Officer
Exhibit G-1.........Transfer Affidavit
Exhibit G-2.........Form of Transferor Certificate for Class R Certificates
Exhibit H...........Form of Transferor Certificate for Class B-2 Certificates
Exhibit I...........Form of Depository Agreement
Exhibit J...........Form of Investment Letter and Form of ERISA Representations
Exhibit K...........Form of Rule 144A Letter
Exhibit L...........Termination Auction Procedures
EXHIBIT B-1
CLASS A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS _________, 19__. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT ____% OF THE STANDARD PREPAYMENT ASSUMPTION
(AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT PASS-
THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $______ PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
Certificate No. : A-__
Date of Pooling and Servicing Agreement : Xxxxx 0, 0000
Xxx-xxx Date : February 28, 1998
First Distribution Date : April 10, 1998
Exhibit B-1-1
Initial Certificate Balance of
this Certificate ("Denomination") : $__________
Initial Certificate Balance of all
Class A Certificates : $734,260,000
Pass-Through Rate : 6.47%
Month of Last Scheduled
Distribution Date : June, 2019
CUSIP : 066-053-AA7
Exhibit B-1-2
BANKAMERICA MANUFACTURED HOUSING CONTRACT TRUST IV
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 1998-1
evidencing a percentage interest in any distributions allocable to the
Class A Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
Bank of America National Trust and Savings Association and Bank of
America, FSB, each as Contract Seller (each a "Contract Seller" and
collectively the "Contract Sellers")
which manufactured housing contracts were originated or acquired by Bank of
America, FSB ("BAFSB") or Bank of America National Trust and Savings Association
("Bank of America") respectively, and are initially serviced by BAFSB, acting
through its division, BankAmerica Housing Services (the "Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by either Contract Seller, the Servicer or
the Trustee referred to below or any of their respective Affiliates or by any
governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class A
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Sellers. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of March 1,
1998 (the "Agreement"), among the Contract Sellers, the Servicer, and The First
National Bank of Chicago, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class A Certificate shall be applied first
to interest and then to principal.
Exhibit B-1-3
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class A
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
-------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely
as Trustee
By
---------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates
referred to in the within-named Agreement
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as Trustee
By
----------------------------------
Authorized Signatory
Exhibit B-1-4
EXHIBIT B-2
CLASS M CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS _________, 19__. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT ____% OF THE STANDARD PREPAYMENT ASSUMPTION
(AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT PASS-
THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $______ PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLERS AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
Exhibit B-2-1
SERVICER, THE CONTRACT SELLERS OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Certificate No. : M-__
Date of Pooling and Servicing Agreement : Xxxxx 0, 0000
Xxx-xxx Date : February 28, 1998
First Distribution Date : April 10, 1998
Initial Certificate Balance of
this Certificate ("Denomination") : $__________
Initial Certificate Balance of all
Class M Certificates : $67,158,000
Pass-Through Rate : 6.94%(subject to a maximum
rate equal to the weighted
average of the Net Contract
Rates of the Contracts in
the Contract Pool)
Month of Last Scheduled
Distribution Date : April, 2023
CUSIP : 066-053-AB5
Exhibit B-2-2
BANKAMERICA MANUFACTURED HOUSING CONTRACT TRUST IV
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 1998-1
evidencing a percentage interest in any distributions allocable to the
Class M Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
Bank of America National Trust and Savings Association and Bank of
America, FSB, each as Contract Seller (each a "Contract Seller" and
collectively the "Contract Sellers")
which manufactured housing contracts were originated or acquired by Bank of
America, FSB ("BAFSB") or Bank of America National Trust and Savings Association
("Bank of America") respectively, and are initially serviced by BAFSB, acting
through its division, BankAmerica Housing Services (the "Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by either Contract Seller, the Servicer or
the Trustee referred to below or any of their respective Affiliates or by any
governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class M
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Sellers. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of March 1,
1998 (the "Agreement"), among the Contract Sellers, the Servicer, and The First
National Bank of Chicago, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class M Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class M Certificate shall be applied first
to interest and then to principal.
Exhibit B-2-3
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class M
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of this Class M Certificate will be made unless the Trustee has
received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Sellers and the Servicer
with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975
of the Internal Revenue Code (the "Code") and stating, among other things, that
the transferee's acquisition of the Class M Certificate will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code and will not subject the Servicer, the Contract Sellers
or the Trustee to any obligation or liability in addition to those undertaken in
the Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating either (a) that the transferee is not an employee benefit or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan, or (b) that the transferee is an insurance company, the source of funds to
be used by it to purchase the Certificate is an "insurance company general
account" (within the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I and III of PTCE
95-60.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
Exhibit B-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as Trustee
By
--------------------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates
referred to in the within-named Agreement
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as Trustee
By
______________________________________
Authorized Signatory
Exhibit B-2-5
EXHIBIT B-3
CLASS B-1 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS _________, 19__. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT ____% OF THE STANDARD PREPAYMENT ASSUMPTION
(AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT PASS-
THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $______ PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLERS AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
Exhibit B-3-1
SERVICER, THE CONTRACT SELLERS OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CLASS B-1 CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED
TO HEREIN.
Certificate No. : B-1-___
Date of Pooling and Servicing Agreement : Xxxxx 0, 0000
Xxx-xxx Date : February 28, 1998
First Distribution Date : April 10, 1998
Initial Certificate Balance of
this Certificate ("Denomination") : $__________
Initial Certificate Balance of all
Class B-1 Certificates : $53,727,000
Pass-Through Rate : _____%(subject to a maximum rate
equal to the weighted average of
the Net Contract Rates of the
Contracts in the Contract Pool)
Month of Last Scheduled
Distribution Date : August, 2025
CUSIP : 066-053-AC3
Exhibit B-3-2
BANKAMERICA MANUFACTURED HOUSING CONTRACT TRUST IV
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 1998-1
evidencing a percentage interest in any distributions allocable to the
Class B-1 Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
Bank of America National Trust and Savings Association and Bank of
America, FSB, each as Contract Seller (each a "Contract Seller" and
collectively the "Contract Sellers")
which manufactured housing contracts were originated or acquired by Bank of
America, FSB ("BAFSB") or Bank of America National Trust and Savings Association
("Bank of America") respectively, and are initially serviced by BAFSB, acting
through its division, BankAmerica Housing Services (the "Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by either Contract Seller, the Servicer or
the Trustee referred to below or any of their respective Affiliates or by any
governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class B-1
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Sellers. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of March 1,
1998 (the "Agreement"), among the Contract Sellers, the Servicer, and The First
National Bank of Chicago, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class B-1 Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class B-1 Certificate shall be applied first
to interest and then to principal.
Exhibit B-3-3
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class B-1
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of this Class B-1 Certificate will be made unless the Trustee
has received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Sellers and the Servicer
with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975
of the Internal Revenue Code (the "Code") and stating, among other things, that
the transferee's acquisition of Class B-1 Certificate will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code and will not subject the Servicer, the Contract Sellers
or the Trustee to any obligation or liability in addition to those undertaken in
the Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating either (a) that the transferee is not an employee benefit or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan, or (b) that the transferee is an insurance company, the source of funds to
be used by it to purchase the Certificate is an "insurance company general
account" (within the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I and III of PTCE
95-60.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
Exhibit B-3-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
---------------------------- THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but
solely as Trustee
By
________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1 Certificates
referred to in the within-named Agreement
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as Trustee
By
______________________________________
Authorized Signatory
Exhibit B-3-5
EXHIBIT B-4
CLASS B-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS _________, 19__. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT ____% OF THE STANDARD PREPAYMENT ASSUMPTION
(AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT PASS-
THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $______ PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLERS AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
SERVICER, THE CONTRACT SELLERS OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT.
Exhibit B-4-1
THIS CLASS B-2 CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED
TO HEREIN.
Certificate No. : B-2-__
Date of Pooling and Servicing Agreement : Xxxxx 0, 0000
Xxx-xxx Date : February 28, 1998
First Distribution Date : April 10, 1998
Initial Certificate Balance of
this Certificate ("Denomination") : $__________
Initial Certificate Balance of all
Class B-2 Certificates : $40,295,092.56
Pass-Through Rate : _____%(subject to a maximum
rate equal to the weighted
average of the Net Contract
Rates of the Contracts in
the Contract Pool)
Month of Last Scheduled
Distribution Date : ____________
CUSIP : ____________
Exhibit B-4-2
BANKAMERICA MANUFACTURED HOUSING CONTRACT TRUST IV
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 1998-1
evidencing a percentage interest in any distributions allocable to the
Class B-2 Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
Bank of America National Trust and Savings Association and Bank of
America, FSB, each as Contract Seller (each a "Contract Seller" and
collectively the "Contract Sellers")
which manufactured housing contracts were originated or acquired by Bank of
America, FSB ("BAFSB") or Bank of America National Trust and Savings Association
("Bank of America") respectively, and are initially serviced by BAFSB, acting
through its division, BankAmerica Housing Services (the "Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by either Contract Seller, the Servicer or
the Trustee referred to below or any of their respective Affiliates or by any
governmental agency or instrumentality.
This certifies that ___________ is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class B-2
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Sellers. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of March 1,
1998 (the "Agreement"), among the Contract Sellers, the Servicer, and The First
National Bank of Chicago, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class B-2 Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class B-2 Certificate shall be applied first
to interest and then to principal.
Exhibit B-4-3
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class B-2
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of this Class B-2 Certificate will be made unless the Trustee
has received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Sellers and the Servicer
with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975
of the Internal Revenue Code (the "Code") and stating, among other things, that
the transferee's acquisition of Class B-2 Certificate will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code and will not subject the Servicer, the Contract Sellers
or the Trustee to any obligation or liability in addition to those undertaken in
the Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating either (a) that the transferee is not an employee benefit or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan, or (b) that the transferee is an insurance company, the source of funds to
be used by it to purchase the Certificate is an "insurance company general
account" (within the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I and III of PTCE
95-60.
No transfer of a Class B-2 Certificate shall be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, (the "Act"), or is made in accordance with said Act. In the event that
such a transfer is to be made, the prospective transferee of such Certificate
shall be required to provide the Trustee, the Contract Sellers and the Servicer
with an investment letter substantially in the form described by the Agreement,
as required under Section 6.02 of the Agreement. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Contract Sellers, the Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with the Act or any similar state laws.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
Exhibit B-4-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
-------------------------- THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but
solely as Trustee
By
-------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-2 Certificates
referred to in the within-named Agreement
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as Trustee
By
______________________________________
Authorized Signatory
Exhibit B-4-5
EXHIBIT C
FORM OF REVERSE OF CERTIFICATES
BANKAMERICA MANUFACTURED HOUSING CONTRACT TRUST IV
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 1998-1
This Certificate is one of a duly authorized issue of Certificates
designated as BankAmerica Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates, Series 1998-1 issued in five
Classes (Class A, Class M, Class X-x, Class B-2 and Class R, herein collectively
called the "Certificates"), and representing a beneficial ownership interest, as
described in the Agreement, in (i) the related Contracts, (ii) the distributions
thereon on or after the Cut-off Date (to the extent described herein), (iii) the
related Certificate Account and such assets as are deposited therein from time
to time and any investments thereof, together, in each case, with any and all
income, proceeds and payments with respect thereto, and (iv) the Reserve
Account.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Certificate Account and the
funds, if any, on deposit in the Reserve Account. for payment hereunder and
that the Trustee is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Contract Sellers, the Servicer and the Trustee with the consent of the
Holders of a Majority In Interest of each Class of Regular Certificates affected
by such amendment. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same
Exhibit C-1
aggregate Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Contract Sellers and the Trustee and any agent of the Contract Sellers
or the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither of the Contract Sellers, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the Pool Scheduled Principal Balance is
less than or equal to 10% of the Cut-off Date Pool Principal Balance, the
Servicer will have the option to repurchase, upon giving notice mailed no later
than the 10th day of the month next preceding the month of the exercise of such
option, all Outstanding Contracts at a price equal to the greater of (a) the sum
of (x) 100% of the Scheduled Principal Balance of each Contract (other than any
Contract as to which the related Manufactured Home has been acquired and not yet
disposed of and whose fair market value is included pursuant to Clause (y)
below) as of the final Distribution Date, and (y) the fair market value of such
acquired property (as determined by the Servicer as of the close of business on
the third Business Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to Section 10.01 of the
Agreement), and (b) the aggregate fair market value (as determined by the
Servicer as of the close of business on such third Business Day) of all the
assets in the Trust Fund, plus, in the case of both clause (a) and clause (b),
an amount sufficient to (i) reimburse any Class A Unpaid Interest Shortfall,
Class M Unpaid Interest Shortfall, Class B-1 Unpaid Interest Shortfall, and any
Class B-2 Unpaid Interest Shortfall and (ii) pay one month's interest due on the
Class A, Class M, Class B-1 and Class B-2 Certificates at the applicable Pass-
Through Rates on such Classes' unpaid Certificate Balances; provided, that in no
event shall the purchase price of such Contracts be less than the Minimum
Termination Amount.
On any Distribution Date on which the Pool Scheduled Principal Balance is
less than or equal to 10% of the Cut-off Date Pool Principal Balance, the
Servicer may request that the Trustee conduct an auction (a "Termination
Auction") by soliciting bids for the purchase of all Contracts remaining in the
Trust Fund, and in any event, if the Servicer has not exercised the option
described in the preceding paragraph within ninety days following the
Distribution Date as of which the Pool Scheduled Principal Balance is less than
10% of the Cut-off Date Pool Principal Balance, the Trustee shall conduct such
termination auction. In the event that satisfactory bids are received as
described in the Agreement, the net sale proceeds will be distributed to
Certificateholders, in the same order of priority as collections received in
respect of the Contracts.
Exhibit C-2
A satisfactory bid is one in which the purchase price of the Contracts then
outstanding is at least equal to the Minimum Termination Amount (as hereinafter
defined). Such a bid must be made in accordance with certain auction procedures
set forth in the Agreement, which include a requirement that the Trustee receive
good faith bids for such Contracts from at least two prospective purchasers (at
least one of whom is not the Contract Sellers or an affiliate thereof) that are
considered by the Trustee, in its sole discretion, to be (i) competitive
participants in the market for manufactured housing installment sale contracts
or installment loan agreements and (ii) willing and able purchasers of such
Contracts. As of any time after the Pool Scheduled Principal Balance is less
than 10% of the Cut-off Date Pool Principal Balance, the "Minimum Termination
Amount" is an amount equal to the respective Certificate Balances of all Classes
of Certificates that remain outstanding as of such time, together with any
shortfall in interest due on such Certificates in respect of prior Distribution
Dates and one month's interest at the applicable Pass-Through Rates on such
Certificate Balances. A sale and consequent termination of the Trust Fund
pursuant to a Termination Auction must constitute a "qualified liquidation" of
the Trust Fund under Section 860F of the Code, including the requirement that
the qualified liquidation takes place over a period not to exceed 90 days. If
satisfactory bids are not received, the Trustee shall decline to sell the
Contracts and shall not be under any obligation to solicit any further bids or
otherwise negotiate any further sale of the Contracts.
Any repurchase pursuant to a Termination Auction or by the Servicer will be
made at the price specified in the Agreement. In the event that no such early
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon the later of the final payment or other
liquidation of the last Contract remaining in the Trust Fund and the disposition
of all REO Property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of the certain person
named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
Exhibit C-3
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-----------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
----------------------------------------------------------------
Dated:
-----------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to____________________________, for the account of____________,
account number___________, or, if mailed by check, to_________________________.
Applicable statements should be mailed to_________________.
This information is provided by________________, the assignee named above,
or_________________________________, as its agent.
Exhibit C-4
EXHIBIT D
CLASS R CERTIFICATE
THE CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLERS AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
SERVICER, THE CONTRACT SELLERS OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT. NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED TO A "DISQUALIFIED
ORGANIZATION" AS DEFINED IN SECTION 860(e)(5) OF THE CODE.
THE HOLDERS OF THE CLASS R CERTIFICATES, BY PURCHASING SUCH CLASS R
CERTIFICATES, SHALL BE DEEMED TO CONSENT (1) TO THE APPOINTMENT OF THE SERVICER
AS THE TAX MATTERS PERSON FOR THE TRUST FUND OR, IF THE SERVICER DETERMINES, IN
ITS SOLE DISCRETION, THAT IT CANNOT ACT IN SUCH CAPACITY, TO THE APPOINTMENT OF
THE HOLDER HOLDING THE LARGEST PERCENTAGE INTEREST IN THE OUTSTANDING CLASS R
CERTIFICATES AS THE TAX MATTERS PERSON FOR THE TRUST FUND. IF THE HOLDER OF THE
LARGEST PERCENTAGE INTEREST IN THE OUTSTANDING CLASS R CERTIFICATES IS APPOINTED
AS THE TAX MATTERS PERSON, SUCH HOLDER SHALL BE DEEMED TO CONSENT, WITH RESPECT
TO ITS CAPACITY AS TAX MATTERS PERSON, TO THE APPOINTMENT OF THE SERVICER AS ITS
ATTORNEY-IN-FACT AND AGENT.
Exhibit D-1
THE HOLDERS OF THE CLASS R CERTIFICATES, BY PURCHASING SUCH CLASS R
CERTIFICATES, SHALL BE FURTHER DEEMED TO AGREE TO EXECUTE ANY DOCUMENTS REQUIRED
TO GIVE EFFECT TO THE FOREGOING PROVISIONS, AS SET FORTH MORE FULLY IN THE
AGREEMENT.
THIS CLASS R CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE CLASS
B-2 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Certificate No. : R-__
Date of Pooling and
Servicing Agreement : Xxxxx 0, 0000
Xxx-xxx Date : February 28, 1998
First Distribution Date : April 10, 1998
Percentage Interest
Evidenced by this
Class R Certificate _____%
Exhibit D-2
BANKAMERICA MANUFACTURED HOUSING CONTRACT TRUST IV
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 1998-1
evidencing a percentage interest in any distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
Bank of America National Trust and Savings Association and Bank of
America, FSB, each as Contract Seller (each a "Contract Seller" and
collectively the "Contract Sellers")
which manufactured housing contracts were originated or acquired by Bank of
America, FSB ("BAFSB") or Bank of America National Trust and Savings Association
("Bank of America") respectively, and are initially serviced by BAFSB, acting
through its division, BankAmerica Housing Services (the "Servicer").
Neither this Certificate nor the Contracts are insured or guaranteed by the
Contract Seller5s, the Servicer or the Trustee referred to below or any of their
respective Affiliates or by any governmental agency or instrumentality.
This certifies that __________ is the registered owner of the Percentage
Interest evidenced by this Certificate in certain monthly distributions with
respect to a Trust Fund consisting of the Contracts deposited by the Contract
Sellers. The Trust Fund was created pursuant to a Pooling and Servicing
Agreement, dated as of March 1, 1998 (the "Agreement"), among the Contract
Sellers, the Servicer, and The First National Bank of Chicago, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
The Trustee will cause to be distributed to the Class R Certificateholder
the amounts to which such Holder is entitled pursuant to the terms of the
Agreement. Such distributions will be made by check mailed to the address of
the Person entitled thereto, as such address shall appear on the Certificate
Register or by wire or other transfer of immediately available funds if such
Person has given the Trustee written instructions at least ten days prior to the
related Distribution Date. Notwithstanding the above, the final distribution on
this Class R Certificate will be made only upon presentation and surrender of
this Class R Certificate at the Corporate Trust Office or the office or agency
maintained by the Trustee for such purpose.
No transfer of this Class R Certificate will be made unless the Trustee has
received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Sellers and the Servicer
with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975
of the Internal Revenue Code (the "Code") and stating, among other things, that
the transferee's
Exhibit D-3
acquisition of Class R Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
and will not subject the Servicer, the Contract Sellers or the Trustee to any
obligation or liability in addition to those undertaken in the Agreement or (ii)
a representation letter, in the form as described by the Agreement, stating that
the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
No transfer of a Class R Certificate shall be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, (the "Act"), or is made in accordance with said Act. In the event that
such a transfer is to be made, the prospective transferee of such Certificate
shall be required to provide the Trustee, the Contract Sellers and the Servicer
with an investment letter substantially in the form described by the Agreement,
as required under Section 6.02 of the Agreement. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Contract Sellers, the Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with the Act or any similar state laws.
Each Holder of this Class R Certificate will be deemed to have agreed to be
bound by the restrictions of Section 6.02 of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class R Certificate may be transferred
without delivery to the Trustee of (a) a transfer affidavit of the proposed
transferee and (b) a transfer certificate of the transferor, each of such
documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class R Certificate must
agree to require a transfer affidavit and to deliver a transfer certificate to
the Trustee as required pursuant to the Agreement, (iv) each person holding or
acquiring an Ownership Interest in this Class R Certificate must agree not to
transfer an Ownership Interest in this Class R Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
Exhibit D-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
---------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but
solely as Trustee
By
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates
referred to in the within-named Agreement
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but solely as Trustee
By
-----------------------------
Authorized Signatory
Exhibit D-5
EXHIBIT E
FORM OF CERTIFICATE REGARDING
SUBSTITUTION OF ELIGIBLE SUBSTITUTE CONTRACT
The undersigned certify that they are [title] and [title], respectively of
[Bank of America National Trust and Savings Association ("Bank of America")]
[Bank of America, FSB, acting through its division, BankAmerica Housing
Services] (the "Contract Seller"), and that as such they are duly authorized to
execute and deliver this certificate on behalf of the Contract Seller pursuant
to Section 3.05(b) of the Pooling and Servicing Agreement (the "Agreement")
dated as of March 1, 1998 among Bank of America National Trust and Savings
Association ("Bank of America") as Contract Seller, Bank of America, FSB, acting
through its division, BankAmerica Housing Services as Contract Seller and
Servicer, and The First National Bank of Chicago as Trustee (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement), and further certify that:
1. The Contracts on the attached schedule are to be substituted on
the date hereof pursuant to Section 3.05(b) of the Agreement and each such
Contract is an Eligible Substitute Contract.
2. The Contract File for each such Contract being substituted for a
Replaced Contract is in the custody of the Servicer and each such Contract has
been stamped in accordance with Section 3.02(x) of the Agreement.
3. The UCC-1 financing statement in respect of the Contracts to be
substituted, in the form required by Section 3.05(b)(ii) of the Agreement, has
been filed with the appropriate office in California.
4. There has been deposited in the Certificate Account each amount
listed on the schedule attached hereto as the amount by which the remaining
principal balance of each Replaced Contract exceeds the remaining principal
balance as of the beginning of the month of substitution of each Contract being
substituted therefor.
IN WITNESS WHEREOF, I have affixed hereunto my signature this_______day of
_______, 19__.
[CONTRACT SELLER]
By
-----------------------------------
[Name]
-------------------------------
[Title]
-------------------------------
By
-----------------------------------
[Name]
-------------------------------
[Title]
-------------------------------
Exhibit E-1
EXHIBIT F
[FORM OF CERTIFICATE OF SERVICING OFFICER]
The undersigned certifies that he is a [title] of [Servicer], a
[corporation] [federal savings bank] (the "Servicer"), and that as such he is
duly authorized to execute and deliver this certificate on behalf of the
Servicer pursuant to Section 5.05 of the Pooling and Servicing Agreement (the
"Agreement") dated as of March 1, 1998 among Bank of America National Trust and
Savings Association, as Contract Seller, Bank of America, FSB, acting through
its division, BankAmerica Housing Services, as Servicer and Contract Seller and
The First National Bank of Chicago, as trustee (all capitalized terms used
herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. To the best of such officer's knowledge, the Monthly Report for the
period from_______________to_______________attached to this certificate is
complete and accurate in accordance with the requirements of Sections 5.04 and
5.05 of the Agreement; and
2. As of the date hereof, such officer is not aware of the
occurrence of an Event of Default or of an event that, with notice or lapse of
time or both, would become an Event of Default.
IN WITNESS WHEREOF, I have affixed hereunto my signature this________day of
_____________, ______.
[SERVICER]
By
------------------------------------
[Name]
--------------------------------
[Title]
--------------------------------
Exhibit F-1
EXHIBIT G-1
TRANSFER AFFIDAVIT
STATE OF )
)ss
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. That he/she is [Title of Officer] of [Name of Owner] (record
or beneficial owner of the BankAmerica Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates, Series 1998-1, Class R (the
"Owner")), a [savings institution][corporation] duly organized and existing
under the laws of [the State of ____________][the United States], on behalf of
which he/she makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificates, and (iii) is
acquiring the Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed
on transfers of Class R Certificates to disqualified organizations under the
Code, that applies to all transfers of Class R Certificates after March 31,
1988; (ii) that such tax would be on the transferor, or, if such transfer is
through an agent (which person includes a broker, nominee or middleman) for a
disqualified organization, on the agent; (iii) that the person otherwise liable
for the tax shall be relieved of liability for the tax if the transferee
furnishes to such person an affidavit that the transferee is not a disqualified
organization and, at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that the Class R Certificates
may be "noneconomic residual interests" within the meaning of Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
Exhibit G-1-1
4. That the Owner is aware of the tax imposed on a "pass-
through entity" holding Class R Certificates if at any time during the taxable
year of the pass-through entity a disqualified organization is the record holder
of an interest in such entity. (For this purpose, a "pass through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code,
or an investment manager, named fiduciary or a trustee of any such plan, or any
other Person acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any such plan.
6. That the Owner is aware that the Trustee will not register
the transfer of any Class R Certificates unless the transferee, or the
transferee's agent, delivers to it an affidavit and agreement, among other
things, in substantially the same form as this affidavit and agreement. The
Owner expressly agrees that it will not consummate any such transfer if it knows
or believes that any of the representations contained in such affidavit and
agreement are false.
7. That the Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of Section 6.02(c) of
the Pooling and Servicing Agreement (the "Agreement") under which the Class R
Certificates were issued (in particular, clause (iii)(A) and (iii)(B) of Section
6.02(c) which authorize the Trustee to deliver payments to a person other than
the Owner and negotiate a mandatory sale by the Trustee in the event the Owner
holds such Certificates in violation of Section 6.02(c)). The Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.
8. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
9. The Owner's Taxpayer Identification Number is ____________.
10. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein
relate only to the Class R Certificates.
11. That no purpose of the Owner relating to the transfer of any
of the Class R Certificates by the Owner is or will be to impede the assessment
or collections of any tax.
12. That the Owner has no present knowledge or expectation that
it will be unable to pay any United States taxes owed by it so long as any of
the Certificates remain outstanding. In this regard, the Owner hereby
represents to and for the benefit of the person from whom it acquired the Class
R Certificate that the Owner intends to pay taxes associated with holding such
Class R Certificate as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by the Class R
Certificate.
Exhibit G-1-2
13. That the Owner has no present knowledge or expectation that
it will become insolvent or subject to a bankruptcy proceeding for so long as
any of the Class R Certificates remain outstanding.
14. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States state thereof (including the District of Columbia),
or an estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this_________day of _______,19 _______.
[NAME OF TRANSFEREE]
By:
-------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
---------------------------------
[Assistant] Secretary
Personally appeared before me the above-named________________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the __________________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day of _________,19 __.
NOTARY PUBLIC
My Commission expires the __ day
of ________, 19__.
Exhibit G-1-3
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
FOR CLASS R CERTIFICATES
Bank of America, FSB Date:
00000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
The First National Bank of Chicago,
as Trustee
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: BankAmerica Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates, Series 1998-1
-----------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
________(the "Transferor") to _________(the "Buyer") of $___________Initial
Certificate Principal Balance of BankAmerica Manufactured Housing Contract Trust
IV Senior/Subordinate Pass-Through Certificates, Series 1998-1, Class R (the
"Certificates"), issued pursuant to Section 6.02(c) of the Pooling and Servicing
Agreement (the "Agreement"), dated as of March 1, 1998 among Bank of America
National Trust and Savings Association as Contract Seller, Bank of America, FSB,
acting through its division, BankAmerica Housing Services as Contract Seller and
Servicer, and The First National Bank of Chicago (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Agreement. The Transferor hereby certifies, represents and warrants to, and
covenants with, the Contract Sellers and the Trustee that:
1. No purpose of the Transferor relating to the transfer of the
Certificate by the Transferor to the Buyer is or will be to impede the
assessment or collection of any tax.
2. The Transferor understands that the Buyer has delivered to the
Trustee and the Servicer a transfer affidavit and agreement in the form attached
to the Agreement as Exhibit G-1. The Transferor does not know or believe that
any representation contained therein is false.
3. The Transferor has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Buyer as contemplated
by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Transferor has determined that the Buyer has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Buyer will not continue to pay its debts as they become due in
the future. The Transferor understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and the
Transferor may continue to be liable for United States income taxes associated
therewith) unless the Transferor has conducted such an investigation.
Exhibit G-2-1
4. The Transferor has no actual knowledge that the proposed Buyer is
not both a United States Person and a Permitted Transferee.
5. The Transferor further certifies that (a) we understand that such
Certificates have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being disposed of by us in a transaction that is
exempt from the registration requirements of the Act, (b) neither the Transferor
nor anyone acting on its behalf has (i) offered, pledged, sold, disposed of or
otherwise transferred any Certificate, any interest in any Certificate or any
other similar security from any person in any manner, (ii) solicited any offer
to buy or to accept a pledge, disposition or other transfer of any Certificate,
any interest in any Certificate or any other similar security from any person in
any manner, (iii) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security from
any person in any manner, (iv) made any general solicitation by means of general
advertising or in any other manner, or (v) taken any other action, that (as to
any of (i) through (v) above) would constitute a distribution of the
Certificates under the Act, that would render the disposition of any Certificate
a violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto, or (c) to the extent
such transfer is pursuant to Rule 144A under the Act, we have not offered the
Certificates to anyone other than a "qualified institutional buyer" as defined
in Rule 144A and the Act. The Transferor will not act, in any manner set forth
in the foregoing sentence with respect to any Certificate. The Transferor has
not and will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Agreement.
Very truly yours,
------------------------------------------
Name of Transferor
By:
---------------------------------------
Name:
Title:
Exhibit G-2-2
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
FOR CLASS B-2 CERTIFICATES
Bank of America, FSB Date:
00000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
The First National Bank of Chicago,
as Trustee
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: BankAmerica Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates, Series 1998-1
-----------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class B-2 Certificate[s], we (the
"Transferor") certify that (a) we understand that such Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed of by us in a transaction that is exempt from the
registration requirements of the Act, (b) neither the Transferor nor anyone
acting on its behalf has (i) offered, pledged, sold, disposed of or otherwise
transferred any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (ii) solicited any offer to buy
or to accept a pledge, disposition or other transfer of any Certificate, any
interest in any Certificate or any other similar security from any person in any
manner, (iii) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security from
any person in any manner, (iv) made any general solicitation by means of general
advertising or in any other manner, or (v) taken any other action, that (as to
any of (i) through (v) above) would constitute a distribution of the
Certificates under the Act, that would render the disposition of any Certificate
a violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto, or (c) to the extent
such transfer is pursuant to Rule 144A under the Act, we have not offered the
Certificates to anyone other than a "qualified institutional buyer" as defined
in Rule 144A and the Act. The Transferor will not act, in any manner set forth
in the foregoing sentence with respect to any Certificate. The Transferor has
not and will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement (the
"Agreement") dated as of March 1, 1998 among Bank of America National Trust and
Savings Association as Contract Seller, Bank of America, FSB, acting through its
division, BankAmerica Housing Services as Contract Seller and Servicer, and The
First National Bank of Chicago (the "Trustee").
Exhibit H-1
Very truly yours,
-------------------------------------
Name of Transferor
By:
-----------------------------------
Name:
Title:
Exhibit H-2
EXHIBIT I
FORM OF DEPOSITORY AGREEMENT
______________, 19__
To: --------------------
--------------------
--------------------
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of March 1,
1998, we hereby authorize and request you to establish an account, as a
Custodial Account, to be designated as "Bank of America, FSB as servicer, in
trust for the [Buyer and various Mortgagors], [Fixed Rate Mortgage Loans]." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. You may refuse any deposit which would result in violation of
the requirement that the account be fully insured as described below. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
BANK OF AMERICA, FSB
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Date:
-----------------------------------
Exhibit I-1
The undersigned, as Depository, hereby certifies that the above-described
account has been established under Account Number at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
-------------------------------------
Depository
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Date:
-------------------------------------
Exhibit I-2
EXHIBIT J
FORM OF INVESTMENT LETTER AND
FORM OF ERISA REPRESENTATIONS
Date:
Bank of America, FSB
00000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
The First National Bank of Chicago,
as Trustee
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: BankAmerica Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates, Series 1998-1
Ladies and Gentlemen:
__________(the "Buyer") intends to purchase from __________(the
"Transferor") $___ Initial Certificate Principal Balance of BankAmerica
Manufactured Housing Contract Trust IV Senior/Subordinate Pass-Through
Certificates, Series 1998-1, Class ___(the "Certificates"), issued pursuant to
the Pooling and Servicing Agreement (the "Agreement"), dated as of March 1, 1998
among Bank of America National Trust and Savings Association, as Contract
Seller, Bank of America, FSB, acting through its division, BankAmerica Housing
Services, as Contract Seller and Servicer, and The First National Bank of
Chicago (the "Trustee"). All terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement. The Buyer hereby certifies,
represents and warrants to, and covenants with, the Contract Sellers and the
Trustee that:
1. We understand that (a) the Certificates have not been and will
not be registered or qualified under the Securities Act of 1933, as amended
(the "Act") or any state securities law, (b) the Contract Sellers are not
required to so register or qualify the Certificates, (c) the Certificates
may be resold only if registered and qualified pursuant to the provisions
of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (d) the Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. We are acquiring the Certificates for our own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. We are (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters,
and, in particular, in such
Exhibit J-1
matters related to securities similar to the Certificates, such that we are
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an investment and
(c) an "accredited investor" within the meaning if Rule 501(a) promulgated
pursuant to the Act.
4. We have not and will not nor have we authorized or will authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security
from any person in any manner, (b) solicit any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar security
from any person in any manner, (d) make any general solicitation by means
of general advertising or in any other manner, or (e) take any other
action, that (as to any of (a) through (e) above) would constitute a
distribution of the Certificates under the Act, that would render the
disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto. We will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions Agreement.
5. We
(a) (1) are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") (a "Plan"), or any other
person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. (S)2510.3-101, or (2)
(as to the Class M, B-1 or B-2 Certificates) are an insurance company, the
source of funds to be used by it to purchase the Certificates is an
"insurance company general account" (within the meaning of DOL Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is eligible
for the exemptive relief afforded under Sections I and III of PTCE 95-60,
and
(b) understand that registration of transfer of any Certificates
to any Plan, or to any Person acting on behalf of or purchasing any such
Certificate with "plan assets" of any Plan, may not be made unless such
Plan or Person, including the Buyer, (1) delivers an Opinion of Counsel,
addressed and satisfactory to the Trustee, the Contract Sellers and the
Servicer, to the effect that the purchase and holding of the Certificates
by, on behalf of or with "plan assets" of such Plan is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and
will not subject the Contract Sellers, the Servicer or the Trustee to any
obligation or liability (including liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in the Agreement, or (2) (as
to the Class M, B-1 or B-2 Certificates) makes the certification set forth
in clause (2) of paragraph 5(a) above.
6. We are not a non-United States person.
Exhibit J-2
Very truly yours,
-----------------------------------------
Name of Buyer
By:
-------------------------------------
Name:
Title:
Exhibit J-3
EXHIBIT K
FORM OF RULE 144A LETTER
Date:
Bank of America, FSB
00000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
The First National Bank of Chicago,
as Trustee
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: BankAmerica Manufactured Housing Contract Trust IV
Senior/Subordinate Pass-Through Certificates, Series 1998-1
Ladies and Gentlemen:
The undersigned purchaser (the "Buyer") warrants and represents to, and
covenants with the Contract Sellers, the Trustee and the Servicer pursuant to
Section 6.02 of the Pooling and Servicing Agreement (the "Agreement"), dated as
of March 1, 1998 among Bank of America National Trust and Savings Association,
as Contract Seller, Bank of America, FSB, acting through its division,
BankAmerica Housing Services, as Contract Seller and Servicer, and The First
National Bank of Chicago (the "Trustee") as follows:
1. We understand that (a) the Rule 144A Securities have not been and
will not be registered or qualified under the Act or any state securities
law, (b) the Contract Seller is not required to so register or qualify the
Rule 144A Securities, (c) the Rule 144A Securities may be resold only if
registered and qualified pursuant to the provisions of the Act or any state
securities law, or if an exemption from such registration and qualification
is available, (d) the Agreement contains restrictions regarding the
transfer of the Rule 144A Securities and (e) the Rule 144A Securities will
bear a legend to the foregoing effect.
2. We are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Rule 144A Securities for our own account or the accounts of
other qualified institutional buyers, understand that such Rule 144A
Securities may be resold, pledged or transferred only (I) to a person
reasonably believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer
to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the Act.
Exhibit K-1
3. We are (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Rule 144A Securities, such that we are capable of evaluating the merits and
risks of investment in the Rule 144A Securities, (b) able to bear the
economic risks of such an investment and (c) an "accredited investor"
within the meaning if Rule 501(a) promulgated pursuant to the Act.
4. We have not and will not nor have we authorized or will authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Rule 144A Securities, any interest in any Rule 144A Securities or any other
similar security from any person in any manner, (b) solicit any offer to
buy or to accept a pledge, disposition or other transfer of any Rule 144A
Securities, any interest in any Rule 144A Securities or any other similar
security from any person in any manner, (c) otherwise approach or negotiate
with respect to any Rule 144A Securities, any interest in any Rule 144A
Securities or any other similar security from any person in any manner, (d)
make any general solicitation by means of general advertising or in any
other manner, or (e) take any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Rule 144A Securities
under the Act, that would render the disposition of any Rule 144A
Securities a violation of Section 5 of the Act or any state securities law,
or that would require registration or qualification pursuant thereto. We
will not sell or otherwise transfer any of the Rule 144A Securities, except
in compliance with the provisions Agreement.
5. We
(a) (1) are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") (a "Plan"), or any other
person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Rule 144A Securities with "plan assets" of any Plan within the meaning of
the Department of Labor ("DOL") regulation at 29 C.F.R. (S)2510.3-101, or
(2) (as to the Class M, B-1 or B-2 Certificates) are an insurance company,
the source of funds to be used by it to purchase the Rule 144A Securities
is an "insurance company general account" (within the meaning of DOL
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase is
eligible for the exemptive relief afforded under Sections I and III of PTCE
95-60, and
(b) understand that registration of transfer of any Rule 144A
Securities to any Plan, or to any Person acting on behalf of or purchasing
any such Rule 144A Securities with "plan assets" of any Plan, may not be
made unless such Plan or Person, including the Buyer, (1) delivers an
Opinion of Counsel, addressed and satisfactory to the Trustee, the Contract
Sellers and the Servicer, to the effect that the purchase and holding of
the Rule 144A Securities by, on behalf of or with "plan assets" of such
Plan is permissible under applicable law, will not constitute or result in
any non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code, and will not subject the Contract Sellers, the Servicer
or the Trustee to any obligation or liability (including
Exhibit K-2
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Agreement, or (2) (as to the Class M, B-1 or B-2
Certificates) makes the certification set forth in clause (2) of paragraph
5(a) above.
6. We are not a non-United States person.
This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
---------------------------------- ----------------------------------
Print Name of Seller Print Name of Buyer
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No No
------------------------------ ------------------------------
Date: Date:
------------------------------ ------------------------------
Exhibit K-3
ANNEX 1 TO EXHIBIT K
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Letter to which this certification relates with respect
to the Rule 144A Securities described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer
owned and/or invested on a discretionary basis $ /1/ in securities
--------
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
----------------
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
----
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the 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, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
----------------
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
-------------------------
/1/Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
Exhibit K-4
___ Broker-dealer. The Buyer is a dealer registered pursuant to
-------------
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company 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 Buyer is a plan established and
-------------------
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
----------
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Buyer is an investment advisor registered
------------------
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. The Buyer is a small business
---------------------------------
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
----------------------------
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
----------
trust company and whose participants are exclusively State or
Local Plans or ERISA Plans as defined above, and no participant
of the Buyer is an individual retirement account or an H.R. 10
(Xxxxx) plan.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the Buyer, if
the Buyer is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) 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 Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
Further, in determining such aggregate amount, the Buyer may have included
securities owned by subsidiaries of the Buyer, but
Exhibit K-5
only if such subsidiaries are consolidated with the Buyer in its financial
statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under
the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities
Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule
144A.
_____ _____ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance
on Rule 144A, the Buyer 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 Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate
steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set
forth in Rule 144A.
7. Until the date of purchase of the Rule 144A Securities, the Buyer
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 Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
---------------------------------------
Name of Buyer
By:
------------------------------------
Name:
Title:
Date:
----------------------------------
Exhibit K-6
ANNEX 2 TO EXHIBIT K
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Letter to which this certification relates with respect
to the Rule 144A Securities described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $_______________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $____________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer'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 (or series thereof) that have the
same investment adviser or investment advisers (the "Adviser") 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 (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
Exhibit K-7
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
-------------------------------------------
Name of Buyer or Adviser
By:
----------------------------------------
Name:
Title:
IF AN ADVISER:
-------------------------------------------
Name of Buyer
Date:
--------------------------------------
Exhibit K-8
EXHIBIT L
TERMINATION AUCTION PROCEDURES
------------------------------
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 10.0l(b) of the Pooling and
Servicing Agreement (the "Agreement"), dated as of March 1, 1998, among Bank of
America National Trust and Savings Association, as Contract Seller, Bank of
America, FSB, acting through its division, BankAmerica Housing Services, as
Contract Seller and Servicer, and The First National Bank of Chicago (the
"Trustee"). Capitalized terms used herein that are not otherwise defined shall
have the meanings described thereto in the Agreement.
I. Pre-Auction Process
-------------------
(a) Upon receiving notice of the Auction Date, the Advisor will
initiate its general Termination Auction procedures consisting of
the following' (i) with the assistance of the Servicer, prepare a
general solicitation package along with a confidentiality
agreement; (ii) develop a list of qualified bidders, in a
commercially reasonable manner; (iii) initiate contact with all
qualified bidders; (vi) send a confidentiality agreement to all
qualified bidders; (v) upon receipt of a signed confidentiality
agreement, send solicitation packages to all interested bidders on
behalf of the Trustee; and (vi) notify the Servicer of all
potential bidders and anticipated timetable.
(b) The general solicitation package will include' (i) the prospectus
supplement and prospectus from the initial public offering of any
of the Certificates; (ii) a copy of all monthly servicing reports
or a copy of all annual servicing reports and the prior year's
monthly servicing reports; (iii) a form of a Sale and Servicing
Agreement prepared by the Trustee and the Servicer (or prepared by
the Advisor and approved by the Trustee and the Servicer); (iv) a
description of the minimum purchase price required to cause the
Trustee to sell the Contracts as set forth in Section 10.01 (a) of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable;
and (vii) a preliminary data tape of the Pool Scheduled Principal
Balance as of a recent Distribution Date reflecting the same data
attributes used to create the Cut-off Date tables for the
prospectus supplement dated ______________, 1998 relating to the
public offering of certain of the Certificates. None of the
Trustee, the Servicer or the Contract Sellers shall be required to
produce an updated prospectus or prospectus supplement, and the
auction procedures shall be carried out in a manner that does not
constitute a public offering of securities.
(c) The Trustee, with the assistance of the Servicer and the Advisor,
will maintain an auction package beginning at the time of closing
of the transaction, which will contain the documents listed under
clauses (i)-(ii) of the preceding paragraph. If the Advisor is
unable to perform its role as advisor to the Trustee, the Servicer
acting in its capacity under the Agreement will select a successor
Advisor and inform the Trustee of its actions.
Exhibit L-1
(d) The Advisor will send solicitation packages to all bidders at least
15 Business Days before the Auction Date. Bidders will be required
to submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 Business Days
before the Auction Date. The Servicer and the Advisor will be
required to satisfy all relevant questions at least five Business
Days prior to the Auction Date and distribute the questions and
answers to all bidders.
II. Auction Process
---------------
(a) The Advisor, any underwriter, or any Certificate Owner will be
allowed to bid in the Auction, but will not be required to do so.
(b) The Servicer will also be allowed to bid in the Termination Auction
if it deems appropriate, but will not be required to do so.
(c) On the Auction Date, all bids will be due by facsimile to the
offices of the Trustee by 1:00 p.m. New York City time, with the
winning bidder to be notified by 2:00 p.m. New York City time. All
acceptable bids (as described in Section 10.01 (b) of the
Agreement) will be due on a conforming basis on the bid sheet
contained in the solicitation package.
(d) If the Trustee receives fewer than two market value bids from
participants in the market for manufactured housing installment
sales contracts and installment loan contracts willing and able to
purchase the Contracts, the Trustee shall decline to consummate the
sale.
(e) Upon notification to the winning bidder, a good faith deposit equal
to one percent (1%) of the Pool Scheduled Principal Balance will be
required to be wired to the Trustee upon acceptance of the bid.
This deposit, along with any interest income attributable to it,
will be credited to the purchase price but will not be refundable.
The trustee will establish a separate account for the acceptance of
the good faith deposit, until such time as the account is fully
funded and all monies are transferred into the Collection Account,
such time not to be later than one Business Day before the related
Distribution Date (as described above).
(f) The winning bidder will receive on the Auction Date a copy of the
draft Sale and Servicing Agreement and Servicer's Representations
and Warranties (which shall be substantially identical to the
representations and warranties set forth in Section 3.01 of the
Agreement).
(g) The Advisor will provide to the Trustee a letter concluding whether
or not the winning bid is a fair market value bid. The Advisor will
also provide such letter if it is the winning bidder. In the case
where the Advisor or the Servicer is the winning bidder it will
provide for market comparables and valuations in its letter.
(h) The Auction will stipulate the Servicer be retained to service the
Contracts sold pursuant to the terms of the Sale and Servicing
Agreement.
Exhibit L-2
(i) The Auction will stipulate that such sale and consequent termination
of the Trust Fund must constitute a "qualified liquidation" of the
Trust Fund under Section 860F of the Code, including the requirement
that such liquidation take place over a period not to exceed 90 days.
The Trustee may, in its discretion, require that the purchaser of the
Contracts provide the Trustee with an Opinion of Counsel to that
effect.
Exhibit L-3
