Document:

EXECUTION
VERSION

    MORTGAGE
SALE, CONTRIBUTION AND SERVICING AGREEMENT

     

    Dated as
of January 29, 2010

     

    Among

     

    COUNTRYPLACE
MORTGAGE HOLDINGS, LLC,

     

    COUNTRYPLACE
MORTGAGE, LTD.,

    as Seller
and Servicer

     

    and

     

    VIRGO
SERVICE COMPANY LLC

    as Credit
Agreement Agent

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE OF CONTENTS

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                	 
      	 
      	 
      	
                                                                                                                                        Page

                                                                                                                                      
	 
      	 
      	 
      	 
      
	
                                                                                                                                        ARTICLE
      I

                                                                                                                                      	
                                                                                                                                        DEFINITIONS

                                                                                                                                      	
                                                                                                                                        1

                                                                                                                                      
	
                                                                                                                                        SECTION
      1.1   

                                                                                                                                      	 
      	
                                                                                                                                        General

                                                                                                                                      	
                                                                                                                                        1

                                                                                                                                      
	
                                                                                                                                        SECTION
      1.2   

                                                                                                                                      	 
      	
                                                                                                                                        Specific
      Terms

                                                                                                                                      	
                                                                                                                                        1

                                                                                                                                      
	
                                                                                                                                        ARTICLE
      II

                                                                                                                                      	
                                                                                                                                        TRANSFER
      OF CONTRACTS; CLOSING

                                                                                                                                      	
                                                                                                                                        10

                                                                                                                                      
	
                                                                                                                                        SECTION
      2.1   

                                                                                                                                      	 
      	
                                                                                                                                        Sale
      and Contribution of Transferred Property

                                                                                                                                      	
                                                                                                                                        10

                                                                                                                                      
	
                                                                                                                                        SECTION
      2.2   

                                                                                                                                      	 
      	
                                                                                                                                        Conditions
      to the Closing

                                                                                                                                      	
                                                                                                                                        11

                                                                                                                                      
	
                                                                                                                                        SECTION
      2.3   

                                                                                                                                      	 
      	
                                                                                                                                        Obligations
      of Seller

                                                                                                                                      	
                                                                                                                                        12

                                                                                                                                      
	
                                                                                                                                        ARTICLE
      III

                                                                                                                                      	
                                                                                                                                        REPRESENTATIONS
      AND WARRANTIES

                                                                                                                                      	
                                                                                                                                        12

                                                                                                                                      
	
                                                                                                                                        SECTION
      3.1   

                                                                                                                                      	 
      	
                                                                                                                                        Representations
      and Warranties By the Seller and the Servicer

                                                                                                                                      	
                                                                                                                                        12

                                                                                                                                      
	
                                                                                                                                        SECTION
      3.2   

                                                                                                                                      	 
      	
                                                                                                                                        Representations
      and Warranties Regarding Each Contract

                                                                                                                                      	
                                                                                                                                        14

                                                                                                                                      
	
                                                                                                                                        SECTION
      3.3   

                                                                                                                                      	 
      	
                                                                                                                                        Representations
      and Warranties Regarding the Contracts in the Aggregate

                                                                                                                                      	
                                                                                                                                        18

                                                                                                                                      
	
                                                                                                                                        SECTION
      3.4   

                                                                                                                                      	 
      	
                                                                                                                                        Representations
      and Warranties Regarding the Contract Files

                                                                                                                                      	
                                                                                                                                        18

                                                                                                                                      
	
                                                                                                                                        SECTION
      3.5   

                                                                                                                                      	 
      	
                                                                                                                                        Repurchase
      of Contracts or Substitution of Contracts for Breach of Representations
      and Warranties

                                                                                                                                      	
                                                                                                                                        19

                                                                                                                                      
	
                                                                                                                                        ARTICLE
      IV

                                                                                                                                      	
                                                                                                                                        PERFECTION
      OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

                                                                                                                                      	
                                                                                                                                        20

                                                                                                                                      
	
                                                                                                                                        SECTION
      4.1   

                                                                                                                                      	 
      	
                                                                                                                                        Filings

                                                                                                                                      	
                                                                                                                                        20

                                                                                                                                      
	
                                                                                                                                        SECTION
      4.2   

                                                                                                                                      	 
      	
                                                                                                                                        Name
      Change or Relocation

                                                                                                                                      	
                                                                                                                                        21

                                                                                                                                      
	
                                                                                                                                        SECTION
      4.3   

                                                                                                                                      	 
      	
                                                                                                                                        Location

                                                                                                                                      	
                                                                                                                                        21

                                                                                                                                      
	
                                                                                                                                        SECTION
      4.4   

                                                                                                                                      	 
      	
                                                                                                                                        Costs
      and Expenses

                                                                                                                                      	
                                                                                                                                        21

                                                                                                                                      
	
                                                                                                                                        ARTICLE
      V

                                                                                                                                      	
                                                                                                                                        SERVICING
      OF CONTRACTS

                                                                                                                                      	
                                                                                                                                        21

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.1   

                                                                                                                                      	 
      	
                                                                                                                                        Responsibility
      for Contract Administration

                                                                                                                                      	
                                                                                                                                        21

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.2   

                                                                                                                                      	 
      	
                                                                                                                                        Standard
      of Care

                                                                                                                                      	
                                                                                                                                        22

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.3   

                                                                                                                                      	 
      	
                                                                                                                                        Records

                                                                                                                                      	
                                                                                                                                        22

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.4   

                                                                                                                                      	 
      	
                                                                                                                                        Inspection;
      Computer Tape

                                                                                                                                      	
                                                                                                                                        22

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.5   

                                                                                                                                      	 
      	
                                                                                                                                        Collection
      Account

                                                                                                                                      	
                                                                                                                                        23

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.6   

                                                                                                                                      	 
      	
                                                                                                                                        Permitted
      Withdrawals

                                                                                                                                      	
                                                                                                                                        24

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.7   

                                                                                                                                      	 
      	
                                                                                                                                        Enforcement

                                                                                                                                      	
                                                                                                                                        25

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.8   

                                                                                                                                      	 
      	
                                                                                                                                        Mortgage
      SPV to Cooperate

                                                                                                                                      	
                                                                                                                                        26

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.9   

                                                                                                                                      	 
      	
                                                                                                                                        Costs
      and Expenses

                                                                                                                                      	
                                                                                                                                        27

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.10

                                                                                                                                      	 
      	
                                                                                                                                        Maintenance
      of Insurance

                                                                                                                                      	
                                                                                                                                        27

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.11

                                                                                                                                      	 
      	
                                                                                                                                        Repossession;
      Delinquent Contracts

                                                                                                                                      	
                                                                                                                                        28

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.12

                                                                                                                                      	 
      	
                                                                                                                                        Subservicing
      Arrangements

                                                                                                                                      	
                                                                                                                                        30

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.13

                                                                                                                                      	 
      	
                                                                                                                                        Retitling;
      Security Interests

                                                                                                                                      	
                                                                                                                                        30

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.14

                                                                                                                                      	 
      	
                                                                                                                                        Payment
      of Taxes

                                                                                                                                      	
                                                                                                                                        31

                                                                                                                                      
	
                                                                                                                                        SECTION
      5.15

                                                                                                                                      	 
      	
                                                                                                                                        Independent
      Public Accountants’ Servicing Report

                                                                                                                                      	
                                                                                                                                        32

                                                                                                                                      
	
                                                                                                                                        ARTICLE
      VI

                                                                                                                                      	
                                                                                                                                        REPORTS
      AND TAX MATTERS

                                                                                                                                      	
                                                                                                                                        32

                                                                                                                                      
	
                                                                                                                                        SECTION
      6.1   

                                                                                                                                      	 
      	
                                                                                                                                        Statements
      to Credit Agreement Agent

                                                                                                                                      	
                                                                                                                                        32

                                                                                                                                      
	
                                                                                                                                        ARTICLE
      VII

                                                                                                                                      	
                                                                                                                                        SERVICE
      TRANSFER

                                                                                                                                      	
                                                                                                                                        33

                                                                                                                                      
	
                                                                                                                                        SECTION
      7.1   

                                                                                                                                      	 
      	
                                                                                                                                        Event
      of Termination

                                                                                                                                      	
                                                                                                                                        33

                                                                                                                                      
	
                                                                                                                                        SECTION
      7.2   

                                                                                                                                      	 
      	
                                                                                                                                        Transfer

                                                                                                                                      	
                                                                                                                                        34

                                                                                                                                      
	
                                                                                                                                        SECTION
      7.3   

                                                                                                                                      	 
      	
                                                                                                                                        Successor
      Servicer to Act, Appointment of Successor.

                                                                                                                                      	
                                                                                                                                        35

                                                                                                                                      
	
                                                                                                                                        SECTION
      7.4   

                                                                                                                                      	 
      	
                                                                                                                                        Notification
      to Mortgage SPV and Credit Agreement Agent

                                                                                                                                      	
                                                                                                                                        36

                                                                                                                                      
	
                                                                                                                                        SECTION
      7.5   

                                                                                                                                      	 
      	
                                                                                                                                        Effect
      of Transfer.

                                                                                                                                      	
                                                                                                                                        36

                                                                                                                                      

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    
 

    TABLE
OF CONTENTS

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            	 
      	 
      	 
      	
                                                                                                    Page

                                                                                                  
	 	 	 	 
	
                                                                                                    SECTION
      7.6   

                                                                                                  	 
      	
                                                                                                    Transfer
      of Collection Account.

                                                                                                  	
                                                                                                    36

                                                                                                  
	
                                                                                                    ARTICLE
      VIII

                                                                                                  	
                                                                                                    INDEMNITIES;
      CERTAIN MATTERS RELATING TO THE SELLER AND THE SERVICER

                                                                                                  	
                                                                                                    36

                                                                                                  
	
                                                                                                    SECTION
      8.1   

                                                                                                  	 
      	
                                                                                                    Seller’s
      Indemnities

                                                                                                  	
                                                                                                    36

                                                                                                  
	
                                                                                                    SECTION
      8.2   

                                                                                                  	 
      	
                                                                                                    Liabilities
      to Obligors

                                                                                                  	
                                                                                                    37

                                                                                                  
	
                                                                                                    SECTION
      8.3   

                                                                                                  	 
      	
                                                                                                    Tax
      Indemnification

                                                                                                  	
                                                                                                    37

                                                                                                  
	
                                                                                                    SECTION
      8.4   

                                                                                                  	 
      	
                                                                                                    Servicer’s
      Indemnities

                                                                                                  	
                                                                                                    37

                                                                                                  
	
                                                                                                    SECTION
      8.5   

                                                                                                  	 
      	
                                                                                                    Operation
      of Indemnities

                                                                                                  	
                                                                                                    37

                                                                                                  
	
                                                                                                    SECTION
      8.6   

                                                                                                  	 
      	
                                                                                                    Liability
      of the Seller and the Servicer

                                                                                                  	
                                                                                                    38

                                                                                                  
	
                                                                                                    SECTION
      8.7   

                                                                                                  	 
      	
                                                                                                    Merger
      or Consolidation of, or Assumption of the Obligations of, the Seller or
      the Servicer

                                                                                                  	
                                                                                                    38

                                                                                                  
	
                                                                                                    SECTION
      8.8   

                                                                                                  	 
      	
                                                                                                    Limitation
      on Liability of Servicer

                                                                                                  	
                                                                                                    38

                                                                                                  
	
                                                                                                    SECTION
      8.9   

                                                                                                  	 
      	
                                                                                                    Servicer
      Not to Resign

                                                                                                  	
                                                                                                    39

                                                                                                  
	
                                                                                                    ARTICLE
      IX

                                                                                                  	
                                                                                                    MISCELLANEOUS

                                                                                                  	
                                                                                                    40

                                                                                                  
	
                                                                                                    SECTION
      9.1   

                                                                                                  	 
      	
                                                                                                    Servicer
      Not to Assign Duties or Resign; Delegation of Servicing
      Functions

                                                                                                  	
                                                                                                    40

                                                                                                  
	
                                                                                                    SECTION
      9.2   

                                                                                                  	 
      	
                                                                                                    Termination

                                                                                                  	
                                                                                                    40

                                                                                                  
	
                                                                                                    SECTION
      9.3   

                                                                                                  	 
      	
                                                                                                    Assignment
      or Delegation by Seller

                                                                                                  	
                                                                                                    40

                                                                                                  
	
                                                                                                    SECTION
      9.4   

                                                                                                  	 
      	
                                                                                                    Amendment

                                                                                                  	
                                                                                                    40

                                                                                                  
	
                                                                                                    SECTION
      9.5   

                                                                                                  	 
      	
                                                                                                    Notices

                                                                                                  	
                                                                                                    40

                                                                                                  
	
                                                                                                    SECTION
      9.6   

                                                                                                  	 
      	
                                                                                                    Merger
      and Integration

                                                                                                  	
                                                                                                    41

                                                                                                  
	
                                                                                                    SECTION
      9.7   

                                                                                                  	 
      	
                                                                                                    Headings

                                                                                                  	
                                                                                                    41

                                                                                                  
	
                                                                                                    SECTION
      9.8   

                                                                                                  	 
      	
                                                                                                    Governing
      Law

                                                                                                  	
                                                                                                    41

                                                                                                  
	
                                                                                                    SECTION
      9.9   

                                                                                                  	 
      	
                                                                                                    Recordation
      of Agreement

                                                                                                  	
                                                                                                    41

                                                                                                  
	
                                                                                                    SECTION
      9.10

                                                                                                  	 
      	
                                                                                                    Severability
      of Provisions

                                                                                                  	
                                                                                                    42

                                                                                                  
	
                                                                                                    SECTION
      9.11

                                                                                                  	 
      	
                                                                                                    Third-Party
      Beneficiaries

                                                                                                  	
                                                                                                    42

                                                                                                  
	
                                                                                                    SECTION
      9.12

                                                                                                  	 
      	
                                                                                                    Counterparts

                                                                                                  	
                                                                                                    42

                                                                                                  
	
                                                                                                    SECTION
      9.13

                                                                                                  	 
      	
                                                                                                    Effect
      of Headings and Table of Contents

                                                                                                  	
                                                                                                    42

                                                                                                  
	
                                                                                                    SECTION
      9.14

                                                                                                  	 
      	
                                                                                                    Right
      of Credit Agreement Agent to Exercise Rights of Mortgage
    SPV

                                                                                                  	
                                                                                                    42

                                                                                                  
	 	 	 	 
	
                                                                                                    SCHEDULES

                                                                                                  	 
      	 
      	 
      
	
                                                                                                    Schedule
      1         -

                                                                                                  	
                                                                                                    LIST
      OF CONTRACTS

                                                                                                  
	
                                                                                                    Schedule
      2         -

                                                                                                  	
                                                                                                    POOL
      STRATIFICATION

                                                                                                  
	
                                                                                                    Schedule
      3         -

                                                                                                  	
                                                                                                    SPECIFIED
      CONTRACTS

                                                                                                  
	
                                                                                                    Schedule
      4         -

                                                                                                  	
                                                                                                    SECOND
      LIEN
MORTGAGES

                                                                                                  

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    SALE,
CONTRIBUTION AND SERVICING AGREEMENT, dated as of January 29, 2010 (this “Agreement”), among
CountryPlace Mortgage, Ltd., a Texas limited partnership (“CPM”), as the seller
and the servicer, CountryPlace Mortgage Holdings, LLC, a Delaware limited
liability company (“Mortgage SPV”), and
VIRGO SERVICE COMPANY LLC, a Delaware limited liability company, as
administrative agent and as collateral agent under the Credit Agreement (defined
below) (in such capacity, “Credit Agreement
Agent”).

     

    WITNESSETH:

     

    WHEREAS,
CPM owns certain manufactured housing installment sales contracts and mortgages
that it wishes to transfer, along with certain related property, to Mortgage
SPV, and Mortgage SPV wishes to purchase such property from CPM;

     

    WHEREAS,
Mortgage SPV wishes to engage CPM to continue to service such Contracts (as
defined in Section 1.2)
after the transfer affected hereby;

     

    NOW,
THEREFORE, in consideration of the mutual agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     

    ARTICLE
I

    DEFINITIONS

     

    SECTION
1.1           General.  

     

    For the
purpose of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires, the terms defined in this Article I include the plural
as well as the singular, the words “herein,” “hereof” and “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision, and Section references refer
to Sections of the Agreement.

     

    SECTION
1.2           Specific
Terms.  

     

    For
purposes of this Agreement, the following terms shall have the following
definitions:

     

    “Affiliate” of any
specified Person means any other Person controlling or controlled by or under
common control with such specified Person.  For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” or “controlled” have meanings correlative
to the foregoing.

     

    “Average Sixty-Day
Delinquency Ratio” means, as of any date of determination, the arithmetic
average of the Sixty-Day Delinquency Ratios as of such date and for the two
months immediately preceding the month in which such date of determination
falls.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Business Day” means
any day other than (a) a Saturday or a Sunday, or (b) a day on which banking
institutions in the State of New York or Texas are authorized or obligated by
law, executive order or governmental decree to be closed.

     

    “Chattel Contract”
means a Contract that is not secured by a mortgage on real estate on which the
related Manufactured Home is situated, and which Manufactured Home is not
considered or classified as part of the real estate under the laws of the
jurisdiction in which it is located.

     

    “Closing Date” means
the date on which the conditions set forth in Section 2.2 are satisfied or
waived by Mortgage SPV and Credit Agreement Agent.

     

    “Code” means the
Internal Revenue Code of 1986, as amended.

     

    “Collateral Security”
means, with respect to any Contract, (i) the security interests granted by or on
behalf of the related Obligor with respect thereto, including a first priority
perfected security interest in the related Manufactured Home, (ii) all other
security interests, mortgages, liens and property subject thereto from time to
time purporting to secure payment of such Contract, whether pursuant to the
agreement giving rise to such Contract or otherwise, together with all financing
statements signed by the Obligor describing any collateral securing such
Contract, (iii) all guarantees, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment of such
Contract whether pursuant to the agreement giving rise to such Contract or
otherwise, and (iv) all records in respect of such Contract.

     

    “Collection Account”
means, subject to Section
7.6, the Eligible Account established and maintained pursuant to Section 5.5.

     

    “Computer Tape” means
the computer tape generated by the Seller which provides information relating to
the Contracts and which was used by the Seller in selecting the Contracts, and
includes the master file and the history file.

     

    “Contract File” means,
as to each Contract, other than a Land-and-Home Contract:

     

    (a) the
fully executed original copy of the Contract and security agreement (if
separate), and all modifications thereto, executed by the Obligor evidencing
indebtedness in connection with the purchase of a Manufactured Home, assigned in
blank by the Seller (which may be by blanket assignment);

     

    (b) the
originals of all assumptions, modifications, consolidation or extension
agreements, if any, signed by the Obligor, with evidence of recording thereon,
if applicable, or copies thereof with a certification that such copy represents
a true and correct copy of the original and that such original has been
submitted for recordation, if applicable, in the appropriate governmental
recording office of the jurisdiction in which the Manufactured Home is
located;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)
either (i) the original title document for the related Manufactured Home or (ii)
a duplicate certified by the appropriate governmental authority which issued the
original thereof or the application for such title document;

     

    (d)
evidence of one or more of the following types of perfection of the security
interest in the related Manufactured Home granted by such Contract, as
appropriate: (i) notation of such security interest on the title document or
(ii) an original or copy of the UCC-1 financing statements, certified as true
and correct by the Seller and all necessary UCC-3 continuation statements with
evidence of filing thereon or copies thereof certified by the Seller to have
been sent for filing, and UCC-3 assignments executed by the Seller in blank,
which UCC-3 assignments shall be in form and substance acceptable for
filing;

     

    (e) an
original notarized Obligor’s power of attorney for each Contract, signed by the
Obligor;

     

    (f)
insurance certificates or other evidence of the issuance of
insurance;

     

    (g) the
original of any guarantee executed in connection with the Contract, if
any;

     

    (h) the
loan transfer agreement, if any, from the originator of such Contract to the
Seller; and

     

    (i)
evidence of any other collateral security, if any.

     

    “Contract Rate” means,
with respect to any particular Contract, the rate of interest specified in that
Contract and computed on a “simple interest” basis, as specified in the related
Contract.

     

    “Contracts” means the
manufactured housing installment sales contracts and installment loan
agreements, including any Land-and-Home Contracts, listed on the List of
Contracts and includes, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date, but excluding any rights to receive payments which are
due pursuant thereto on or before the applicable Cut-off Date.

     

    “Credit Agreement”
means that certain Credit Agreement, dated as of the date hereof, among
Countryplace Acceptance Corporation, a Nevada corporation, CPM, Mortgage SPV,
Palm Harbor Homes, Inc., a Florida corporation, Countryplace Acceptance G.P.,
LLC, a Texas limited liability company, Countryplace Acceptance L.P., LLC, a
Delaware limited liability company, the lenders party thereto and Virgo Service
Company LLC, a Delaware limited liability company, as administrative agent and
collateral agent for such lenders, as the same may be from time to time amended,
restated, supplemented or otherwise modified, refinanced or
replaced.

     

    “Credit Agreement Agent
Report” means the report prepared for Credit Agreement Agent containing
the information described in Section 6.1(b).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Cumulative Realized
Losses” means, as of any date of determination, the sum of the Realized
Losses for such date of determination and each preceding month since the Cut-off
Date.

     

    “Cumulative Realized Losses
Test” means, to be considered “satisfied” for any date of
determination:

     

    (i)           if
such date occurs between the Closing Date and December 31, 2010 (inclusive),
that the Cumulative Realized Losses as of such date are less than or equal to
6.5 % of the Cut-off Date Pool Principal Balance;

     

    (ii)          if
such date occurs between January 1, 2011 and December 31, 2011 (inclusive), that
the Cumulative Realized Losses as of such date are less than or equal to 8.0% of
the Cut-off Date Pool Principal Balance;

     

    (iii)         if
such date occurs between January 1, 2012 and December 31, 2012 (inclusive), that
the Cumulative Realized Losses as of such date are less than or equal to 8.5 %
of the Cut-off Date Pool Principal Balance; and

     

    (iv)         if
such date occurs on or after January1, 2013, that the Cumulative Realized Losses
as of such date are less than or equal to 10.0% of the Cut-off Date Pool
Principal Balance.

     

     “Current Realized Loss
Ratio” means, as of any date of determination, a fraction, expressed as a
percentage, (a) the numerator of which is (i) the aggregate Realized Losses for
such date of determination and for the two months immediately preceding the
period so covered, multiplied by (ii)
four, and (b) the denominator of which is the arithmetic average of (i) the Pool
Principal Balance as of the third preceding distribution date and (ii) the Pool
Principal Balance as of such date of determination.

     

     “Cut-off Date” means,
with respect to each Contract other than an Eligible Substitute Contract, the
opening of business on January 26, 2010, and with respect to each Eligible
Substitute Contract, the date of substitution.

     

    “Cut-off Date Pool Principal
Balance” means the aggregate of the Cut-off Date Principal Balances of
the Contracts.

     

    “Cut-off Date Principal
Balance” means, as to any Contract, the unpaid principal balance thereof
at the Cut-off Date.

     

    “Defaulted Contract”
means (i) any Contract with respect to which the Servicer commenced repossession
or foreclosure procedures, made a sale of such Contract to a third party for
repossession, foreclosure or other enforcement, or (ii) a Chattel Contract or a
Land-and-Home Contract with respect to which any payment was Delinquent 360 or
more days or 180 days after the date of repossession of the related Manufactured
Home, excluding in such case any Contract deemed delinquent solely because the
Obligor’s required monthly payment was reduced as a result of bankruptcy or
similar proceedings.

     

    
      
        
        

      

      
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    “Delinquent” means the
period of delinquency based on the number of days Scheduled Payments are
contractually past due (assuming 30-day months).  Consequently,
Scheduled Payments on a Contract due on the first day of the month are not 30
days Delinquent until the first day of the next month.

     

    “Due Date” means, as
to any Contract, the date of the month on which the Scheduled Payment for such
Contract is due.

     

    “Electronic Ledger”
means the electronic master record of installment sale contracts and installment
loan agreements of the Seller.

     

    “Eligible Account” an
account of the Servicer (or Successor Servicer, as applicable) and Mortgage SPV,
held at a financial institution approved by Credit Agreement Agent and which is
subject to a Control Agreement (as defined in the Credit
Agreement).

     

    “Eligible Substitute
Contract” means, as to any Replaced Contract for which such Eligible
Substitute Contract is being substituted pursuant to Section 3.5(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 3.2 and does not cause
any of the representations and warranties in Section 3.3, after giving
effect to such substitution, to be incorrect;

     

    (b) as of
the date of such substitution, has a Principal Balance that is not greater than
the 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;

     

    (e) is a
Land-and-Home Contract if the Replaced Contract is a Land-and-Home Contract and
is otherwise secured by a Manufactured Home that is similar in type and value to
the collateral serving the Replaced Contract; and

     

    (f) is
acceptable to Credit Agreement Agent.

     

    If more
than one Contract is being substituted pursuant to Section 3.5(b) for more than
one Replaced Contract on a particular date, then the conditions specified above
(other than those in clause (c), (d) or (e) above, shall be applied to the
Contracts being substituted, in the aggregate, and the Replaced Contracts, in
the aggregate.

     

    “Errors and Omissions
Protection Policy” means the employee errors and omissions policy
maintained by the Servicer or any similar replacement policy covering errors and
omissions by the Servicer’s employees, and meeting the requirements of Section 5.10, all as such
policy relates to Contracts comprising a portion of the Transferred
Property.

     

    
      
        
        

      

      
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    “Event of Termination”
has the meaning assigned in Section 7.1.

     

    “Fidelity Bond” means
the fidelity bond maintained by the Servicer or any similar replacement bond,
meeting the requirements of Section 5.10, as such bond
relates to Contracts comprising Transferred Property.

     

    “Hazard Insurance
Policy” means, with respect to each Contract, the policy of fire and
extended coverage insurance required to be maintained for the related
Manufactured Home, as provided in Section 5.10, and which, as
provided in Section
5.10, may be a blanket mortgage impairment policy maintained by the
Servicer in accordance with the terms and conditions of Section 5.10.

     

    “Insurance Proceeds”
means proceeds paid by any insurer pursuant to any insurance policy or contract
related to a Contract.

     

    “Land-and-Home
Contract” means a Contract that is secured by a mortgage on real estate
on which the related Manufactured Home is situated, and which Manufactured Home
is considered or classified as part of the real estate under the laws of the
jurisdiction in which it is located.

     

    “Land-and-Home Contract
File” means, as to each Land-and-Home Contract, (a) the fully executed
original copy of the Land-and-Home Contract and security agreement (if
separate), and all modifications thereto, executed by the Obligor evidencing
indebtedness in connection with the purchase of a Manufactured Home, assigned in
blank by the Seller; (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 policy, commitment or other title document for the related Manufactured
Home; (c) the assignment of the Land-and-Home Contract and the related Mortgage
from the originator to the Seller; (d) an endorsement of such Land-and-Home
Contract by the Seller to Mortgage SPV or in blank; (e) an assignment of the
related Mortgage to Mortgage SPV or in blank; and (f) the originals of all
assumptions, modifications, consolidation or extension agreements, if any,
signed by the Obligor, with evidence of recording thereon, if applicable, or
copies thereof with a certification that such copy represents a true and correct
copy of the original and that such original has been submitted for recordation
in the appropriate governmental recording office of the jurisdiction in which
the Manufactured Home is located.

     

    “Liquidated Contract”
means (i) any Defaulted Contract described in clause (i) of the definition
thereof, as to which the Servicer has determined that all amounts which it
expects to recover from or on account of such Contract have been recovered;
provided that the related Manufactured Home and, in the case of Land-and-Home
Contracts, Mortgaged Property, have been realized upon and disposed of and the
proceeds of such disposition have been received and (ii) without duplication,
any Defaulted Contract described in clause (ii) or (iii) of the definition
thereof.

     

    
      
        
        

      

      
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    “Liquidation Expenses”
means out-of-pocket expenses (exclusive of any overhead expenses) which are
incurred by the Servicer in connection with the liquidation of any defaulted
Contract and any unreimbursed Servicing Advances with respect thereto, on or
prior to the date on which the related Manufactured Home and, in the case of
Land-and-Home Contracts, Mortgaged Property, are disposed of, including, without
limitation, legal fees and bankruptcy expenses, and any related and unreimbursed
expenditures for property taxes, property preservation or restoration of the
property to marketable condition.

     

    “Liquidation Proceeds”
means cash (including Insurance Proceeds) received in connection with the
liquidation of defaulted Contracts, whether through repossession, foreclosure
sale or otherwise, including any rental income realized from the repossessed
Manufactured Home.

     

    “List of Contracts”
means the list identifying each Contract constituting Transferred Property,
which list is attached hereto as Schedule 1, as such lists may
be amended from time to time pursuant to Section 2.2 or 3.5(b).  The List of
Contracts shall set forth as to each Contract identified on it (i) the Cut-off
Date Principal Balance (or if such Contract is an Eligible Substitute Contract,
the Principal Balance of such Contract as of the date of substitution), (ii) the
amount of monthly payments due from the Obligor, (iii) the Contract Rate, (iv)
the maturity date, (v) if such Contract is a Land-and-Home Contract, (vi) the
remaining term to maturity, (vii) whether the Contract is a Specified Contract;
and (viii) if such Contract is a Specified Contract, the reason why such
Contract constitutes a Specified Contract (including notation of under which
clause of the definition of Specified Contract applies thereto).

     

    “Manufactured Home”
means a unit of manufactured housing, modular or sidebuilt home, including all
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.

     

    “Monthly Servicing
Fee” means, as of any date of determination, one-twelfth of the product
of 1 1⁄4% and the Pool Principal Balance as of the first day of the month in which
such date of determination falls.

     

    “Mortgage” means 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-and-Home Contract.

     

    “Mortgaged Property”
means the property subject to the lien of a Mortgage.

     

    “Net Liquidation Loss”
means in respect of any date of determination, (i) as to a Liquidated Contract
as defined in clause (i)
of the definition thereof, the amount, if any, by which the outstanding
principal balance of such Liquidated Contract exceeds the Net Liquidation
Proceeds for such Liquidated Contract, or, without duplication; (ii) as to a
Liquidated Contract that is a Land-and-Home Contract that is considered a
Liquidated Contract under clause (ii) of the definition thereof, the amount
equal to 50% of the outstanding principal balance of such Liquidated Contract;
provided however, that upon the sale or other disposition of such Land-and-Home
Contract (x) if the Liquidation Proceeds from such disposition are less than 50%
of the outstanding principal balance of such Liquidated Contract, Net
Liquidation Loss with respect to such Contract and the next determination date
immediately following the disposition will be increased by an amount equal to
the difference between 50% of the outstanding principal balance of such
Liquidated Contract and the Liquidation Proceeds of such Contract, and (y) if
the Liquidation Proceeds from such disposition exceed 50% of the outstanding
principal balance of such Liquidated Contract, Net Liquidation Loss with respect
to such Contract and the next determination date immediately following the
disposition will be decreased by an amount equal to the difference between the
Liquidation Proceeds of such Contract and 50% of the outstanding principal
balance of such Liquidated Contract; or without duplication; (iii) as to the
definition thereof, the amount equal to the outstanding principal balance of
such Liquidated Contract; provided however that upon the sale or other
disposition of such Chattel Contract, the Net Liquidation Loss with respect to
such Contract and the next determination date immediately following the
disposition will be decreased by an amount equal to the Liquidation Proceeds
realized on such Contract.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Net Liquidation
Proceeds” means, as to a Liquidated Contract, all Liquidation Proceeds
received on or prior to the last day of the month in which such Contract became
a Liquidated Contract, net of Liquidation Expenses.

     

    “Nonrecoverable
Advance” means any advance made by the Servicer pursuant to Section 5.10, 5.11 or 5.14 which are not recovered
by the Servicer from Liquidation Proceeds on the related Contract.  In
determining whether an advance is or will be nonrecoverable, the Servicer need
not take into account that it might receive any amounts in a deficiency
judgment.  The determination by the Servicer that any advance is, or
if made would constitute, a Nonrecoverable Advance, shall be evidenced by a
certificate of a Servicing Officer of the Servicer delivered to Mortgage SPV
stating the reasons for such determination.

     

    “Obligor” means each
Person who is indebted under a Contract.

     

    “Outstanding” means
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 purchased pursuant to Section 3.5 prior to the time
of reference.

     

    “Person” means any
individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     

    “Pool Stratification”
means the list attached hereto as Schedule 2, as such lists may
be amended from time to time pursuant to Section 2.2 and
3.5(b).  The Pool Stratification as of any date shall set
forth, as to all Contracts on the List of Contracts as of such date, in the
aggregate, all of the information set forth on the Pool Stratification attached
hereto as Schedule 2 on
the date hereof.

     

     “Pool Principal
Balance” means, as of any date of determination, the aggregate Principal
Balance, as of the first day of the month in which such date of determination
falls, of all Contracts Outstanding as of the first day of such
month.

     

    
      
        
        

      

      
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    “Principal Balance”
means, as to any Contract and any date of determination, the related Cut-off
Date Principal Balance, minus all collections
credited against the Principal Balance of such Contract after the Cut-off Date
and prior to such date of determination.  For purposes of this
definition, a Liquidated Contract shall be deemed to have a Principal Balance
equal to the Principal Balance of the related Contract immediately prior to the
final recovery of related Liquidation Proceeds, and a Principal Balance of zero
thereafter.

     

    “Principal Prepayment”
means a payment or other recovery of principal which is received in advance of
its Due Date and applied to reduce the outstanding principal amount due on such
Contract prior to the date or dates on which such principal amount is
due.

     

    “Realized Losses”
means, as of any date of determination, the aggregate Net Liquidation Losses of
all Contracts that became Liquidated Contracts during the immediately preceding
month.

     

    “Replaced Contract”
has the meaning assigned in Section 3.5(b).

     

    “Repurchase Price”
means, with respect to a Contract to be repurchased pursuant to Section 3.5, an amount equal
to (a) the Principal Balance of such Contract on the date of repurchase, plus (b) interest on
such Principal Balance, at the Contract Rate from the last day with respect to
which the Obligor made a payment through the date of repurchase, plus (c) if the
Servicer is no longer CPM, any unreimbursed Servicing Advances with respect to
such Contract, plus (d) the amount
of any penalties, fines, forfeitures, legal fees and related costs, judgments
and any other costs, fees and expenses incurred by or imposed on Mortgage SPV or
Credit Agreement Agent or with respect to which Mortgage SPV or Credit Agreement
Agent is liable arising from a breach by the Seller of its representations and
warranties in connection with any violation with respect to such Contract of any
predatory or abusive lending law.

     

    “Scheduled Payment”
means, as to each Contract, the scheduled monthly payment of principal and
interest required to be made by an Obligor on the related Contract.

     

    “Seller” means CPM, as
transferor of the Contracts hereunder.

     

    “Service Transfer” has
the meaning set forth in Section 7.2(a).

     

    “Servicer” means CPM,
as servicer hereunder, and following the appointment of any new servicer
pursuant to Article VII,
such Person in such capacity.

     

    “Servicing Advances”
means the reasonable “out-of-pocket” costs and expenses incurred by the Servicer
in the performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event.

     

    “Servicing Officer”
means any officer of the Servicer involved in, or responsible for, the
administration and servicing of Contracts whose name appears on a list of
servicing officers appearing in an officer’s certificate furnished to Mortgage
SPV and Credit Agreement Agent by the Servicer, as the same may be amended from
time to time.

     

    “Sixty-Day Delinquency
Ratio” means, as of any date of determination, a fraction, expressed as a
percentage, the numerator of which is the aggregate of the outstanding balances
of all Contracts that were Delinquent 60 days or more as of the first day of the
month in which such date of determination falls (including Contracts in respect
of which the related Manufactured Homes have been repossessed but are still in
inventory), and the denominator of which is the Pool Principal Balance as of
such date of determination.

     

    
      
        
        

      

      
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    “Specified Contract”
means (i) a Contract under which Delinquent payments are outstanding for more
than 60 days, (ii) any Defaulted Contract and (iii) any Contract with respect to
which litigation is pending or the relevant Obligor is the subject of bankruptcy
proceedings.

     

    “Substitution Date”
means the date of each repurchase pursuant to Section 3.5(a), or
substitution pursuant to Section 3.5(b).

     

    “Successor Servicer”
has the meaning set forth in Section 7.2(a).

     

     “Transferred Property”
means the property conveyed pursuant to Section 2.1(a), excluding any
Replaced Contracts (and all other property described in Section 2.1(a) with respect to
such Replaced Contracts) and including all Eligible Substitute Contracts
substituted pursuant to Section
3.6(b) (and all other property described in Section 2.1(a) with respect to
such Eligible Substitute Contracts).

     

    “Trigger Event” means
any of the following as of any date of determination:

     

    (a)           the
Average Sixty-Day Delinquency Ratio shall exceed 10.0%;

     

    (b)           the
Current Realized Loss Ratio shall exceed 9.0%  prior to and including
the first anniversary of the Closing Date (as defined in the Credit Agreement)
and 5.0% thereafter;

     

    (c)           the
Cumulative Realized Losses Test is not satisfied.

     

    “Weighted Average Net
Contract Rate” means, as of any date of determination, the per annum rate equal
to the weighted average (determined by Principal Balance) of the Contract Rates
of all Contracts that were outstanding on the last day of the calendar month
immediately preceding the month in which such date of determination
falls.

     

    ARTICLE
II

    TRANSFER
OF CONTRACTS; CLOSING

     

    SECTION
2.1           Sale and
Contribution of Transferred Property.  

     

    (a)           CPM,
as Seller, as of the Closing Date, hereby transfers, assigns, delivers, sells,
contributes, sets over and otherwise conveys to Mortgage SPV all of Seller’s
right, title and interest in and to the following, whether now existing or
hereafter acquired and wherever located: (1) each Contract (including without
limitation any Eligible Substitute Contract) and any related Mortgage, including
without limitation all right, title and interest in and to the Collateral
Security, including without limitation all rights to receive payments on or with
respect to the Contracts, (2) every Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the creditor of such
Contract, (3) the proceeds from the Errors and Omissions Protection Policy and
all rights under any blanket hazard insurance policy to the extent they relate
to the Manufactured Homes, (4) all documents contained in the Contract Files and
the Land-and-Home Contract Files, (5) the Collection Account and all money,
funds or investment property held therein, and (6) all proceeds and products of
or in any way derived from any of the foregoing.

     

    
      
        
        

      

      
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    (b)           Although
the parties intend that the conveyance of Seller’s right, title and interest in
and to the Transferred Property pursuant to this Agreement shall constitute a
purchase and sale and not a pledge of security for loans from Mortgage SPV, it
is the intent of this Agreement that if such conveyances are deemed to be a
pledge of security for loans from Mortgage SPV or any other Persons (the “Secured
Obligations”), the parties intend that the rights and obligations of the
parties to the Secured Obligations shall be established pursuant to the terms of
this Agreement.  The parties also intend and agree that Seller shall
be deemed to have granted to Mortgage SPV, and Seller does hereby grant to
Mortgage SPV, a perfected first-priority security interest in the Transferred
Property and all proceeds thereof, to secure the Secured Obligations, and that
this Agreement shall constitute a security agreement under applicable
law.

     

    SECTION
2.2           Conditions
to the Closing.  

     

    On or
before the Closing Date, unless a condition is waived by Mortgage SPV and Credit
Agreement Agent, the Seller shall deliver or cause to be delivered the following
documents to Mortgage SPV:

     

    (a)           Any
update to the List of Contracts or the Pool Stratification.

     

    (b)           Copies
of resolutions of the board of directors of the Seller, or of the executive
committee of the board of directors of the Seller, approving the execution,
delivery and performance of this Agreement, the transactions contemplated
hereunder, certified in each case by the secretary or an assistant secretary of
the Seller.

     

    (c)           Officially
certified recent evidence of existence and tax status of the Seller under the
laws of the State of Texas.

     

    (d)           Evidence
of filing of (i) a UCC-l financing statement, naming the Seller as debtor,
naming Mortgage SPV as secured party, listing the Transferred Property as
collateral, and indicating that such UCC-1 evidences a sale, with the Secretary
of State of Texas and (ii) a UCC-l financing statement, naming the Seller as
debtor, naming Mortgage SPV as secured party and listing the Transferred
Property as collateral, with the Secretary of State of Texas.

     

    (e)           The
Contract File or the Land-and-Home Contract File, as applicable.

     

    (f)           A
bill of sale and assignment executed by the Seller substantially in the form of
Exhibit A.

     

    (g)           A
certificate of an officer of Servicer listing the Servicer’s Servicing
Officers.

     

    
      
        
        

      

      
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    (h)           Evidence
of deposit in the Collection Account of all funds received with respect to the
Contracts after the Cut-off Date and prior to the Closing Date, together with a
certificate of an officer of Servicer to the effect that such amount is
correct.

     

    (i)           A
favorable opinion of counsel to the Seller, covering such matters as Mortgage
SPV or Credit Agreement Agent may request.

     

    (j)           A
Control Agreement (as defined in the Credit Agreement) with respect to the
Collection Account, executed and delivered by Mortgage SPV, the Servicer, Credit
Agreement Agent and the relevant financial institution where the Collection
Account is held.

     

    (k)          Any
other documents, opinions or certificates that Mortgage SPV or Credit Agreement
Agent may reasonably request.

     

    SECTION
2.3           Obligations
of Seller.  

     

    (a)           The
Seller shall, not later than the Closing Date, indicate in its books and records
or electronic systems that the Transferred Property has been sold to Mortgage
SPV pursuant to this Agreement.

     

    (b)           If
Mortgage SPV discovers a breach of the representations or warranties set forth
in Section 3.2, 3.3 or 3.4, the Seller shall promptly
cure such breach or repurchase or replace such Contract pursuant to Section 3.5.  If the
Seller is given written notice that a Contract File or a Land-and-Home Contract
File is defective or incomplete, and if the Seller does not correct or cure such
omission or defect within 90 days, the Seller shall purchase such Contract from
Mortgage SPV pursuant to Section 3.5 if such defect
materially adversely affects the interests of Mortgage SPV or Credit Agreement
Agent (as determined by the Credit Agreement Agent in its sole
discretion).

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES 

     

    SECTION
3.1           Representations
and Warranties By the Seller and the Servicer.  

     

    Each of
the Seller and the Servicer represent and warrants, effective on the Closing
Date, that:

     

    (a)           Organization and Good
Standing.  It is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Texas and has the
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 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).

     

    
      
        
        

      

      
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    (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 the Seller and 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.  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.

     

    (d)           No Violations.  The
execution, delivery and performance of this Agreement by the Seller and the
Servicer will not violate any provision of any existing law or regulation or any
order or decree of any court or its organizational documents, or constitute a
material breach of any mortgage, indenture, contract or other agreement to which
it is a party or by which it may be bound.

     

    (e)           Litigation.  No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of the Seller or the
Servicer threatened, against it or any of its properties (other than Specified
Contracts described in clause (iii) of the definition thereof), or with respect
to this Agreement which, if adversely determined, could reasonably be expected
to have a material adverse effect on the transactions contemplated by this
Agreement.

     

    (f)           Licensing.  It, or
an affiliate, is duly registered as a finance company in each state in which
Contracts were originated, to the extent such registration is required by
applicable law.  The Servicer is duly licensed in each state in which
it services the Contracts, to the extent such license is required by applicable
law.

     

    (g)           No Misstatements or
Omissions.  No certificate of an officer, statement furnished
in writing or report delivered pursuant to the terms hereof by the Seller or the
Servicer contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report not
misleading.

     

    (h)           Ordinary Course of
Business.  The transactions contemplated by this Agreement are
in the ordinary course of its business.

     

    (i)           Solvency.  Neither
the Seller nor the Servicer is insolvent, nor will the Seller or the Servicer be
made insolvent by the transfer of the Contracts, nor is the Seller or the
Servicer aware of any pending insolvency.

     

    (j)           Collection
Practices.  The collection practices used by the Servicer with
respect to the Contracts have been, in all material respects, legal, proper,
prudent and customary in the manufactured housing servicing business and in
accordance with the servicing standard set forth in Section
5.1.

     

    
      
        
        

      

      
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    (k)           Monthly Servicing
Fee.  The Servicer believes that the Monthly Servicing Fee
provides a reasonable level of base compensation to the Servicer for servicing
the Contracts on the terms set forth herein.

     

    (l)           Good Faith; No Adverse
Claim.  The Seller is not transferring the Contracts with any
intent to hinder, delay or defraud any of its creditors.  The Seller
acquired title to the Contracts in good faith, without notice of any adverse
claim.

     

    SECTION
3.2           Representations
and Warranties Regarding Each Contract.  

     

    The
Seller represents and warrants with respect to each Contract, as of the Closing
Date and each Substitution Date, that:

     

    (a)           List of
Contracts.  The information set forth in the most recently
delivered List of Contracts is true and correct.

     

    (b)           Payments.  As of the
Cut-off Date, in the case of (i) any Contract other than any Specified Contract,
the most recent Scheduled Payment was made by or on behalf of the Obligor
(without any advance from the Seller or any Person acting at the request of the
Seller) or was not past due for more than 60 days and (ii) any Specified
Contract, all current payment delinquencies thereunder are set forth on Schedule 3.

     

    (c)           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
Land-and-Home Contract File, as applicable.

     

    (d)           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 or by general equity
principles.

     

    (e)           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.

     

    (f)           Insurance
Coverage.  The Manufactured Home securing the Contract is
covered by a Hazard Insurance Policy in the amount required by Section 5.10.  With
respect to any Contract, the Seller has obtained: (a) a statement from the
Obligor’s insurance agent that the Manufactured Home was, at the time of
origination of the Contract, not in a federally designated special flood hazard
area; or (b) evidence that, at the time of origination, flood insurance was in
effect, which coverage is at least equal to that required by Section 5.10 or
such lesser coverage as may be available under the federal flood insurance
program.  All premiums due as of the Closing Date on such insurance
have been paid in full.

     

    
      
        
        

      

      
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    (g)           Origination.  The
Contract was originated by a manufactured housing dealer acting in the regular
course of its business and purchased by the Seller in the ordinary course or its
business or was originated or acquired by the Seller directly, in the ordinary
course of its business.

     

    (h)           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
the Contract pursuant to this Agreement unlawful, or the ownership of the
Contract by Mortgage SPV, unlawful or render the Contract
unenforceable.  The Seller has received all consents and approvals
necessary under the terms of the Contract to or of the transfer of the Contract
to Mortgage SPV.

     

    (i)           Compliance with
Law.  At the date of origination of the Contract and as of the
Closing Date, the Contract, as cured when required, complies with all
requirements of all applicable law, including, without limitation, all
applicable federal, state and local predatory and abusive lending
laws.

     

    (j)           Contract in
Force.  The Contract has not been satisfied or subordinated in
whole or in part or rescinded, and the Manufactured Home securing the Contract
has not been released from the lien of the Contract in whole or in
part.

     

    (k)           Valid Security
Interest.  Each Contract (other than the Land-and-Home
Contracts) creates a valid and enforceable perfected first priority security
interest in favor of the Seller in the Manufactured Home covered thereby as
security for payment of the Cut-off Date Principal Balance of such
Contract.  The Seller has assigned all of its right, title and
interest in such Contract, including the security interest in the Manufactured
Home covered thereby, to Mortgage SPV.  Upon execution of this
Agreement, Mortgage SPV will own each Contract free of any lien and will have a
valid and perfected and enforceable first priority security interest in such
Contract and Manufactured Home.

     

    (i)           Each
Mortgage (other than those specified as second lien mortgages on Schedule 4) is a valid first
lien in favor of the Seller on real property securing the amount owed by the
Obligor under the related Land-and-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-and-Home Contract obtained by the Seller 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.  As
of the Closing Date, the Seller will have assigned all of its right, title and
interest in such Land-and-Home Contract and related Mortgage, including the
security interest in the Manufactured Home covered thereby, to Mortgage
SPV.  Upon execution of this Agreement, Mortgage SPV will own each
Contract free of any lien and, except with respect to those specified as second
lien mortgages on Schedule
4, will have a valid and perfected and enforceable first priority
security interest in the related Mortgaged Property subject to the exceptions
set forth above.

     

    
      
        
        

      

      
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    (ii)          The
Contract constitutes an instrument, tangible chattel paper, an account or a
payment intangible within the meaning of the Uniform Commercial Code in effect
in the State of New York.

     

    (l)            
Capacity of
Parties.  The signature(s) of the Obligor(s) on the Contract
are genuine and all parties to the Contract had full legal capacity to execute
the Contract.

     

    (m)           Good Title.  In the
case of a Contract purchased from a manufactured housing dealer, the Seller
purchased the Contract for fair value and took possession thereof in the
ordinary course of its business, without knowledge that the Contract was subject
to a security interest.  Immediately prior to the transfer of the
Contract by the Seller to Mortgage SPV hereunder, the Seller 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 Seller.  The Seller has not
authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Contract other
than a financing statement relating to the security interest granted to Mortgage
SPV hereunder.  The Seller is not aware of any judgment or tax lien
filings against the Seller.  With respect to any Contract bearing a
stamp indicating that such Contract has been sold to another party, such other
party’s interest in such Contract has been released.

     

    (n)           No Defaults.  As of
the Cut-off Date, there was no default, breach, violation or event permitting
acceleration existing under the Contract (except in the case of any Specified
Contract described in clause (iii) of the definition thereof and, in the case of
any other Specified Contract, except solely to the extent that such default,
breach, violation or event relates to late payments described in Section 3.2(b)) and no event
which, with notice and the expiration of any grace or cure period, would
constitute such a default, breach, violation or event permitting acceleration
under such Contract (except payment delinquencies permitted by Section
3.2(b)).  The Seller has not waived any such default, breach,
violation or event permitting acceleration except payment delinquencies
permitted by Section
3.2(b).  As of the Closing Date, the related Manufactured Home
is, to the best of the Seller’s knowledge, free of damage and in good repair and
no Manufactured Home has suffered damage that is not covered by a Hazard
Insurance Policy, including, but not limited, to hurricanes, earthquakes,
floods, tornadoes, straight-line winds, sinkholes, mudslides, volcanic eruptions
and other natural disasters.

     

    (o)           No Liens.  As of the
Closing Date, to the knowledge of the Seller, there are no liens or 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.

     

    (p)           Equal
Installments.  At the date of origination, each Contract
provided for level monthly payments which, if paid on each Due Date, fully
amortized the loan over its term.

     

    
      
        
        

      

      
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    (q)           Enforceability.  The
Contract contains customary and enforceable provisions so as to render the
rights and remedies of the holder thereof adequate for the realization against
the collateral of the benefits of the security provided thereby.

     

    (r)           One Original.  There
is only one original executed Contract (other than the original executed copy
retained by the Obligor), which Contract has been delivered to Mortgage SPV on
or before the Closing Date.

     

    (s)           Notation of Security
Interest.  With respect to each Contract other than a
Land-and-Home Contract, if the related Manufactured Home is located in a state
in which notation of a security interest on the title document is required or
permitted to perfect such security interest, the title document shows, or if a
new or replacement title document with respect to such Manufactured Home is
being applied for, such title document will be issued within 180 days and will
show, the Seller or its assignee 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 under the UCC is
required to perfect a security interest in manufactured housing, such filings or
recordings have been duly made and show the Seller or its assignee as secured
party.  If the related Manufactured Home secures a Land-and-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 the Seller as
mortgagee.  In either case, Mortgage SPV 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 Seller and any trustee in
bankruptcy of the Seller) claiming an interest in such Manufactured
Home.

     

    (t)           Simple
Interest.  All of the Contracts are “simple interest”
manufactured housing installment loan agreements or manufactured housing
installment sales contracts.

     

    (u)           Financing of Real
Property.  No Contract other than a Land-and-Home Contract has
financed any amount in respect of real property.

     

    (v)           Prepayment
Penalties.  No Contract contains any provision providing for
the payment of a prepayment fee or penalty upon the prepayment of a portion or
all of the outstanding Principal Balance of that Contract.

     

    (w)           Prepaid Single Premium Credit Life
Insurance Policy.  No Obligor obtained a prepaid single premium
credit life insurance policy in connection with the origination of the related
Contract.

     

    (x)           Texas
Obligors.  With respect to each Obligor located in the State of
Texas: (i) the related Manufactured Home is not a salvaged manufactured home or
reserved for business use only; (ii) the related Manufactured Home was not
previously real property which has been converted back to personal property;
(iii) the related Manufactured Home has not been abandoned or unoccupied for
four months or if it has been abandoned the Seller has removed the home before
its lien is extinguished under Section 1201.217 of the Manufactured Housing
Standards Act; and (iv) that the real estate owner on which the related
Manufactured Home is located has not perfected its possessory lien pursuant to
the Texas Finance Code § 347.402.

     

    
      
        
        

      

      
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    SECTION
3.3           Representations
and Warranties Regarding the Contracts in the
Aggregate.  

     

    The
Seller represents and warrants, as of the Closing Date and each Substitution
Date, that:

     

    (a)           Amounts.  The
aggregate principal amounts payable by Obligors under the Contracts as of the
Cut-off Date equals the Cut-off Date Pool Principal Balance (which equals
$19,757,839.60).

     

    (b)           Characteristics of
Contracts.  The Pool Stratification is true, correct and
complete.

     

    (c)           Computer Tape.  The
Computer Tape made available by the Seller was complete and accurate as of its
date and includes a description of the same Contracts that are described in the
List of Contracts.

     

    (d)           Marking Records.  By
the Closing Date or each Substitution Date, the Seller has caused the portions
of the Electronic Ledger relating to the Contracts to be clearly and
unambiguously marked to indicate that such Contracts are owned by Mortgage
SPV.

     

    (e)           No Adverse
Selection.  No adverse selection procedures have been employed
in selecting the Contracts.

     

    SECTION
3.4           Representations
and Warranties Regarding the Contract Files.  

     

    The
Seller represents and warrants, as of the Closing Date and each Substitution
Date, that:

     

    (a)           Possession.  Mortgage
SPV possession of each original Contract and the related Contract File or
Land-and-Home Contract File.  There are and there will be no custodial
agreements in effect materially and adversely affecting the rights of the Seller
to make, or cause to be made, any delivery required hereunder.

     

    (b)           Bulk Transfer
Laws.  The transfer, assignment and conveyance of the Contracts
and the Contract Files and Land-and-Home Contract Files by the Seller pursuant
hereto is not subject to the bulk transfer or any similar statutory provisions
in effect in any applicable jurisdiction.

     

    
      
        
        

      

      
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    SECTION
3.5           Repurchase
of Contracts or Substitution of Contracts for Breach of Representations and
Warranties.  

     

    (a)           The
Seller shall repurchase a Contract, at its Repurchase Price, not later than the
last day of the month prior to the month that is 60 days after the day on which
the Seller, the Servicer, Credit Agreement Agent or Mortgage SPV first discovers
a breach of a representation or warranty of the Seller set forth in Section 3.2, 3.3 or 3.4 that, individually or in
the aggregate, materially adversely affects Credit Agreement Agent’s or Mortgage
SPV’s interest in such Contract and which breach has not been cured or waived by
Mortgage SPV; provided that (i) in the event that a party other than the Seller
first becomes aware of such breach, such discovering party shall notify the
Seller in writing within five Business Days of the date of such discovery and
(ii) with respect to any Contract incorrectly described on the List of Contracts
with respect to Principal Balance, which the Seller would otherwise be required
to repurchase pursuant to this Section 3.5, the Seller may,
in lieu of repurchasing such Contract, deliver to the Servicer, for deposit in
the Collection Account no later than 60 days from the date of such discovery,
cash in an amount sufficient to cure such deficiency or
discrepancy.  With respect to any representation and warranty
described in Section 3.2
as being made to the best of the Seller’s knowledge, if it is discovered by
either the Seller, Credit Agreement Agent or Mortgage SPV that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Contract or the interests of
Credit Agreement Agent or Mortgage SPV therein, notwithstanding the Seller’s
lack of knowledge with respect to the substance of such representation or
warranty, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.  Notwithstanding any other provision of
this Agreement, the obligation of the Seller under this Section 3.5 shall not
terminate upon a Service Transfer.  Notwithstanding the foregoing, the
Seller shall repurchase any Land-and-Home Contract, at such Contract’s
Repurchase Price, or substitute for it an Eligible Substitute Contract as
described in Section
3.5(b), if the Seller has failed to deliver the related Land-and-Home
Contract File to Mortgage SPV within 30 days of the Closing Date or relevant
Substitution Date.  Each of the parties to this Agreement acknowledges
that the provisions of this Section 3.5 are an obligation
solely of the Seller and not of any other party to this Agreement.

     

    (b)           The
Seller, at its election, may substitute one or more Eligible Substitute
Contracts for any Contracts (i) that it is obligated to repurchase pursuant to
Section 3.5(a) and
within the time frame set in Section 3.5(a) for repurchase,
or (ii) the continued inclusion of which in the pool would cause a Trigger Event
to occur on the next determination date with any such substitution to be
effected prior to such determination date (all such Contracts being referred to
as the “Replaced
Contracts”) upon satisfaction of the following conditions:

     

    (i)           the
Seller shall have conveyed to Mortgage SPV the relevant Eligible Substitute
Contracts and the Contract Files or Land-and-Home Contract Files, as applicable,
related to such Eligible Substitute Contracts and the Seller shall have marked
the Electronic Ledger indicating that such Contracts are owned by Mortgage
SPV;

     

    (ii)          the
Seller shall have executed and delivered to Mortgage SPV a bill of sale and
assignment substantially in the form of Exhibit A;

     

    (iii)         the
Seller shall have delivered to Credit Agreement Agent and Mortgage SPV (A)
evidence of filing of (i) a UCC-l financing statement, naming the Seller as
debtor, naming Mortgage SPV as secured party, listing the Eligible Substitute
Contracts and other related Transferred Property as collateral, and indicating
that such UCC-1 evidences a sale, with the Secretary of State of Texas and (ii)
a UCC-l financing statement, naming the Seller as debtor, naming Mortgage SPV as
secured party and listing the Eligible Substitute Contracts and other related
Transferred Property as collateral, with the Secretary of State of Texas and (B)
an amended List of Contracts;

     

    
      
        
        

      

      
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    (iv)         the
Seller shall have delivered to Mortgage SPV (A) a favorable opinion of counsel
to the Seller, covering such matters as Mortgage SPV or Credit Agreement Agent
may request, and (B) in the case of any Eligible Substitute Contract that is a
Land-and-Home Contract, an opinion of counsel satisfactory to Mortgage SPV and
Credit Agreement Agent to the effect that Mortgage SPV holds a perfected first
priority lien in the real estate securing such Eligible Substitute Contracts, or
evidence of recordation of the assignment to Mortgage SPV of each Mortgage
securing such Eligible Substitute Contracts;

     

    (v)          if
the aggregate Principal Balance of such Replaced Contracts is greater than the
aggregate Principal Balance of the related Eligible Substitute Contracts, the
Seller shall have delivered to the Servicer (A) for deposit in the Collection
Account, the amount of such excess and (B) a certification of an officer of the
Seller that such deposit has been made.

     

    Upon
satisfaction of such conditions, (i) Mortgage SPV may add such Eligible
Substitute Contracts to, and delete such Replaced Contracts from, the List of
Contracts and (ii) Servicer shall provide to Mortgage SPV and Credit Agreement
Agent an updated Pool Stratification.

     

    (c)           Upon
(i) deposit in the Collection Account of the Repurchase Price under Section 3.5(a) and the
subsequent payment of the Repurchase Price to the Credit Agreement Agent as a
mandatory prepayment under Section 2.6(d) of the Credit Agreement, or (ii) the
delivery of an Eligible Substitute Contract pursuant to Section 3.5(b), the making of
any required deposits in the Collection Account and receipt of a bill of sale
and assignment executed by the Seller substantially in the form of Exhibit A, Mortgage SPV shall
convey and assign to the Seller all of Mortgage SPV’s right, title and interest
in the repurchased Contract or Replaced Contract without recourse,
representation or warranty, except as to the absence of liens, charges or
encumbrances created by or arising as a result of actions of Mortgage
SPV.

     

    (d)           The
Seller shall defend and indemnify Credit Agreement Agent and Mortgage SPV
against all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, arising out of any claims which may be
asserted against or incurred by any of them as a result of any third-party
action arising out of any breach of any representation and
warranty.

     

    ARTICLE
IV

    PERFECTION
OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

     

    SECTION
4.1           Filings.

     

    The
Seller shall cause to be filed all necessary continuation statements of the
UCC-1 financing statement to be filed.  From time to time the Servicer
shall take and cause to be taken such reasonable actions and execute such
documents as are reasonably necessary to perfect and protect Mortgage SPV’s and
Credit Agreement Agent’s interest in the Transferred Property and the
Manufactured Homes against all other persons, including, without limitation, 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, to the extent that the
foregoing can be done at reasonable cost to Servicer.  The Servicer
will maintain Mortgage SPV’s first priority perfected security interest in each
Manufactured Home and a first lien on each Mortgaged Property so long as the
related Contract constitutes Transferred Property.

     

    
      
        
        

      

      
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    SECTION
4.2           Name Change
or Relocation.  

     

    (a)           During
the term of this Agreement, the Seller shall not change its name, identity or
structure or relocate its chief executive office or its place of organization
without first giving 30 days’ prior written notice thereof to Mortgage SPV,
Credit Agreement Agent and the Servicer.

     

    (b)           If
any change in the Seller’s name, identity, structure, location or place of
organization 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 or would cause any such
financing or continuation statement or notice of lien to become unperfected
(whether immediately or with lapse of time), the Seller, no later than five days
prior to the effective date of such change, shall file, or cause to be filed,
such amendments or financing statements as may be required to preserve, perfect
and protect Mortgage SPV’s interest in the Contracts and proceeds thereof and in
the Manufactured Homes.

     

    SECTION
4.3           Location.  

     

    During
the term of this Agreement, the Seller will maintain its location in one of the
States of the United States.

     

    SECTION
4.4           Costs and
Expenses.  

     

    The
initial Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of Mortgage SPV’s and Credit Agreement Agent’s right, title and
interest in and to the Transferred Property (including, without limitation, the
security interests in the Manufactured Homes granted thereby).

     

    ARTICLE
V

    SERVICING
OF CONTRACTS

     

    SECTION
5.1           Responsibility
for Contract Administration.

     

    (a)           The
Servicer shall have the sole obligation to manage, administer, service and make
collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor.  At the written request of the Servicer, accompanied by the
form of power of attorney or other documents being requested, Mortgage SPV shall
furnish to the Servicer any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder, and Mortgage SPV shall not be held responsible for any acts by
the Servicer in its uses of any such powers of attorney or other
document.  The Servicer shall indemnify Mortgage SPV for any
reasonable costs, liabilities and expenses (including reasonable attorneys’
fees) incurred by Mortgage SPV in connection with the intentional or negligent
misuse of such power of attorney by the Servicer, as
applicable.  Notwithstanding anything contained herein to the
contrary, the Servicer shall not without Mortgage SPV’s written consent (i)
initiate any action, suit or proceeding solely under Mortgage SPV’s name without
indicating the Servicer’s representative capacity or (ii) knowingly cause
Mortgage SPV to be registered to do business in any state, provided, however,
that the preceding clause (i) shall not apply to the initiation of actions
relating to Contracts that the Servicer is servicing pursuant to its respective
duties herein.  The limitations of the preceding clause shall not be
construed to limit any duty or obligation imposed on Mortgage SPV under any
other provision of this Agreement.

     

    
      
        
        

      

      
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    (b)           Subject
to Section 8.9, CPM is
hereby appointed the Servicer (and hereby accepts such appointment) until such
time as any Service Transfer shall be effected.

     

    SECTION
5.2           Standard of
Care.  

     

    In
managing, administering, servicing and making collections on the Contracts
pursuant to this Agreement, the Servicer shall exercise that degree of skill and
care consistent with the same degree of skill and care that the Servicer
exercises with respect to similar contracts serviced by the Servicer and
Servicer shall not discriminate against the Contracts or collateral therefor in
its administration or enforcement of such Contracts; provided, however, that (i)
such degree of skill and care shall be at least as favorable as the degree of
skill and care generally applied by servicers of manufactured housing
installment sales contracts for institutional investors and (ii) notwithstanding
the foregoing, the Servicer shall not release or waive the right to collect the
unpaid balance on any Contract unless it makes the determination that acceptance
of the liquidation proceeds from the related Obligor would result in Mortgage
SPV receiving a greater amount of collections than the Net Liquidation Proceeds
that would result from repossessing or foreclosing and liquidating the related
Manufactured Home.

     

    SECTION
5.3           Records.  

     

    The
Servicer shall, during the period it is servicer hereunder, maintain such books
of account and other records as will enable Mortgage SPV and Credit Agreement
Agent to determine the status of each Contract.  In the Credit
Agreement Agent’s sole discretion, the Servicer shall deliver a monthly report
containing certain information regarding Contracts to the Administrative Agent
in a format agreed to by both parties.  In the event of a Service
Transfer, the Servicer agrees to use best efforts to provide certain information
relating to such books of account and other records in a format generally
acceptable to the Successor Servicer.

     

    SECTION
5.4           Inspection;
Computer Tape.  

     

    (a)           At
all times during the term hereof, the Servicer shall afford Mortgage SPV, Credit
Agreement Agent and their respective authorized agents reasonable access during
normal business hours to the Servicer’s records, which have not previously been
provided to Mortgage SPV, relating to the Contracts and will cause its personnel
to assist in any examination of such records by Mortgage SPV, Credit Agreement
Agent and their respective authorized agents.  The examination
referred to in this Section
5.4 will be conducted in a manner which does not unreasonably interfere
with the Servicer’s normal operations or customer or employee
relations.  Without otherwise limiting the scope of the examination
Mortgage SPV, Credit Agreement Agent and their respective agents may make, such
Persons may, using generally accepted audit procedures, verify the status of
each Contract and review the Electronic Ledger and records relating thereto for
conformity to Credit Agreement Agent Reports and compliance with the standards
represented to exist as to each Contract in this Agreement.

     

    
      
        
        

      

      
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    (b)           At
all times during the term hereof, the Servicer shall keep available a copy of
the List of Contracts at its principal executive office for inspection by
Mortgage SPV.

     

    SECTION
5.5           Collection
Account.  

     

    (a)           On
or before the Closing Date, the Servicer and Mortgage SPV shall establish the
Collection Account with Wells Fargo Bank, National Association.  The
Collection Account shall be entitled “CountryPlace Collection Account for the
benefit of Credit Agreement Agent and Lenders in Mortgage Sale and Servicing
Agreement.”  The Servicer shall pay into the Collection Account as
promptly as practicable (and not later than the second Business Day) following
receipt thereof by CPM or any Affiliate thereof from or on behalf of any
Obligor:

     

    (i)           all
payments received after the Cut-Off Date on account of principal on the
Contracts and all Principal Prepayments collected after the Cut-Off
Date;

     

    (ii)          all
payments received after the Cut-Off Date on account of interest on the
Contracts;

     

    (iii)         all
Net Liquidation Proceeds and any recoveries received after the liquidation of a
Contract;

     

    (iv)         all
Insurance Proceeds unless to be used to directly offset the cost of repairing
the related property;

     

    (v)         any
amounts payable in connection with the repurchase of any Contract pursuant to
Section 3.5;
and

     

    (vi)         any
other amount required to be deposited in the Collection Account pursuant to this
Agreement;

     

    provided,
however, that the Servicer shall be permitted to retain (prior to deposit
pursuant to Section
5.5(a)(ii)) the Monthly Servicing Fee from payments in respect of
interest on the Contracts in accordance with Section 5.6.  The
foregoing requirements respecting deposits to the Collection Account are
exclusive, it being understood that, without limiting the generality of the
foregoing, the Servicer need not deposit in the Collection Account amounts
representing late payment fees, assumption fees, extension fees or escrow
deposits payable by Obligors, which amounts shall be property of the
Servicer.  The Servicer agrees that all amounts paid into the
Collection Account under this Agreement shall be held in trust for Mortgage SPV
and Credit Agreement Agent until payment or withdrawal of any such amounts is
authorized under this Agreement.

     

    
      
        
        

      

      
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    (b)           Amounts
in the Collection Account shall be invested as directed by Mortgage SPV in cash
or Cash Equivalents (as defined in the Credit Agreement).  All income
and gain from such investments shall belong to Mortgage SPV.

     

    SECTION
5.6           Permitted
Withdrawals.   

     

    (a)           The
Servicer shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts deposited in said account pursuant to Section 5.5 that are
attributable to the Contracts for the purpose of making any mandatory
prepayments in respect of Contracts repurchased by Seller under Section 3.5.

     

    (b)           The
Servicer may, from time to time as provided herein, make withdrawals from the
Collection Account of amounts deposited in said account pursuant to Section 5.5 that are
attributable to the Contracts for the following purposes:

     

    (i)           to
pay to the Seller with respect to each Contract or property acquired in respect
thereof that has been repurchased or replaced pursuant to Section 3.5, all amounts
received thereon and not required to be distributed to Mortgage SPV as of the
date on which the related Principal Balance or Repurchase Price is
determined;

     

    (ii)          to
reimburse the Servicer out of Liquidation Proceeds for Liquidation Expenses
incurred by it, to the extent such reimbursement is permitted pursuant to Section 5.9, and to reimburse
the Servicer as provided in Sections 5.8, 5.11, 5.13 and 7.2;

     

    (iii)         to
withdraw any amount deposited in the Collection Account that was not required to
be deposited therein;

     

    (iv)        to
make any rebates or adjustments deemed necessary by the Servicer pursuant to
Section
5.7(d);

     

    (v)         to
reimburse the Servicer (1) for any accrued unpaid Monthly Servicing Fees and (2)
for unreimbursed Servicing Advances, including Nonrecoverable Advances, to the
extent not otherwise retained.  The Servicer’s right to reimbursement
for Servicing Advances that are not Nonrecoverable Advances shall be limited to
late collections on the related Contract, including Liquidation Proceeds,
Insurance Proceeds and such other amounts as maybe collected by the Servicer
from the related Obligor or otherwise relating to the Contract in respect of
which such reimbursed amounts are owed.  Except with respect to
Nonrecoverable Advances, the Servicer’s right to reimbursement for unreimbursed
Servicing Advances shall be limited to late collections of interest on any
Contract and to Liquidation Proceeds and Insurance Proceeds on related
Obligors.  In addition, expenses incurred by the Servicer in
connection with a defaulted Contract which is subsequently reinstated, worked
out or cured, shall be reimbursable to the Servicer as a Nonrecoverable Advance
at the time of the cure.  Since, in connection with withdrawals
pursuant to Section
5.6(b)(v), the Seller’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 Collection Account pursuant to such
clause;

     

    
      
        
        

      

      
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    (vi)        to
reimburse the Servicer for amounts in respect of indemnification or other
amounts to which it is entitled under this Agreement, including under Section 8.8;

     

    (vii)       to
make payments owing under the Credit Agreement and the other Loan Documents (as
defined in the Credit Agreement); and

     

    (viii)      to
make payments or distributions required or permitted under the Limited Liability
Company Agreement of Mortgage SPV.

     

    (c)           Mortgage
SPV may, from time to time, make withdrawals from the Collection Account, so
long as not prohibited under the Credit Agreement.

     

    SECTION
5.7           Enforcement.  

     

    (a)           The
Servicer shall, consistent with customary servicing procedures and the terms of
this Agreement, act with respect to the Contracts in such manner as, in the
Servicer’s reasonable judgment, will maximize the receipt of principal and
interest on such Contracts and Liquidation Proceeds with respect to Liquidated
Contracts.

     

    (b)           The
Servicer may sue to enforce, initiate a replevin action, or collect upon
Contracts, in its own name, if possible, or as agent for Mortgage
SPV.

     

    (c)           The
Servicer shall exercise any rights of recourse against third persons that exist
with respect to any Contract in accordance with the Servicer’s usual
practice.  In exercising recourse rights, the Servicer is authorized
on Mortgage SPV’s behalf to reassign the Contract or to resell the related
Manufactured Home to the Person against whom recourse exists at the price set
forth in the document creating the recourse.

     

    (d)           The
Servicer may grant to the Obligor on any Contract any rebate, refund or
adjustment out of the Collection Account that the Servicer in good faith
believes is required because of prepayment in full of the
Contract.  The Servicer will not permit any rescission or cancellation
of any Contract, except as required by applicable law or regulation or upon the
order of any court or other governmental authority asserting jurisdiction in a
suit, claim or complaint involving the Contract.

     

    (e)           The
Servicer may, consistent with its customary servicing procedures and consistent
with Section 5.2, grant
to the Obligor on any Contract an extension of payments due under such Contract;
provided that, no such extension may extend beyond the final scheduled payment
date of the Contract with the latest maturity, and no more than three extensions
for any one Contract of payments under a Contract may be granted in any
twelve-month period.  Notwithstanding the foregoing, in connection
with a Contract that is in default or for which default is imminent, the
Servicer may, consistent with the servicing standard described in Section 5.1, waive, modify or
vary any term of that Contract (including modifications that change the Contract
Rate, forgive the payment of principal or interest or extend the final maturity
date of that Contract), accept payment from the related Obligor of an amount
less than the Principal Balance in final satisfaction of that Contract, or
consent to the postponement of strict compliance with any such term or otherwise
grant the indulgence to any Obligor if in the Servicer’s determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of Mortgage SPV (taking into account any estimated loss that might
result absent such action), with the prior written consent of Credit Agreement
Agent.  However, the Servicer shall not extend the maturity of any
Contract past the date on which the final payment is due on the latest maturing
Contract as of the related Cut-off Date.

     

    
      
        
        

      

      
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    (f)           The
Servicer may enforce any due-on-sale clause in a Contract if such enforcement is
called for under its then current servicing policies for obligations similar to
the Contracts; provided that such enforcement is permitted by applicable law and
will not adversely affect any applicable insurance policy.  If an
assumption of a Contract is permitted by the Servicer upon conveyance of the
related Manufactured Home, the Servicer shall use its best efforts to obtain an
assumption agreement in connection therewith and add such assumption agreement
to the related Contract File or Land and Home Contract File.

     

    SECTION
5.8           Mortgage
SPV to Cooperate.  

     

    (a)           The
Servicer shall notify Mortgage SPV, Credit Agreement Agent and the Seller of all
Contracts that were paid in full in the prior month by delivery of a
certification of a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payments which are required to be deposited in the Collection Account pursuant
to Section 5.5 have been
so 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 lien on the related real estate and collateral.  The
Servicer shall determine when a Contract has been paid in full; to the extent
that insufficient payments are received on a Contract but are otherwise
incorrectly credited by the Servicer as prepaid or paid in full and satisfied,
the shortfall shall be paid by the Servicer out of its own funds; provided that
the Servicer may reimburse itself for such shortfall payment from the Collection
Account if the Servicer corrects the error and receives amounts in respect of
such shortfall payment from future collections with respect to such
Contract.

     

    (b)           From
time to time as appropriate for servicing and foreclosure in connection with any
Contract, Mortgage SPV shall, upon written request of a Servicing Officer, at
the expense of the Servicer, cause the original Contract and the related
Contract File or Land-and-Home Contract File, as applicable, to be released to
the Servicer and shall execute such documents as the Servicer shall deem
necessary to the prosecution of any such proceedings.  Upon request of
a Servicing Officer, Mortgage SPV shall perform such other acts as reasonably
requested by the Servicer and otherwise cooperate with the Servicer in
enforcement of Credit Agreement Agent’s or Mortgage SPV’ rights and remedies
with respect to Contracts.  Mortgage SPV shall not be liable for the
performance of any such acts at the request of the Servicer.

     

    (c)           The
Servicer’s receipt of a Contract and/or Contract File or Land-and-Home Contract
File shall obligate the Servicer to return the original Contract and the related
Contract File or Land-and-Home Contract File, as applicable, to Mortgage SPV
when its need by the Servicer has ceased unless the Contract shall be liquidated
or repurchased or replaced as described in Section 3.5.

     

    
      
        
        

      

      
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    SECTION
5.9           Costs and
Expenses.  

     

    All costs
and expenses incurred by the Servicer in carrying out its duties hereunder,
including all fees and expenses incurred in connection with the enforcement of
Contracts (including enforcement of defaulted Contracts and repossessions of
Manufactured Homes securing such Contracts) shall be paid by the Servicer and
the Servicer shall not be entitled to reimbursement hereunder, except to the
extent specifically provided herein.  Furthermore, the Servicer shall
be reimbursed out of the Liquidation Proceeds of a Liquidated Contract for
Liquidation Expenses incurred by it and if such Liquidation Expenses are deemed
Nonrecoverable Advances, the Servicer may reimburse itself as provided in Section
5.6(b)(v).  The Servicer shall not incur such Liquidation
Expenses unless it determines in its good faith business judgment that incurring
such expenses will increase the Net Liquidation Proceeds on the related
Contract.

     

    SECTION
5.10         Maintenance of
Insurance.  

     

    (a)           Except
as otherwise provided in Section 5.10(b), 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 related 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 due from the Obligor on the related Contract, whichever is
less; provided, however, that the amount of coverage provided by each Hazard
Insurance Policy shall be sufficient to avoid the application of any
co-insurance clause contained therein; and provided, further, that such Hazard
Insurance Policies may provide for customary deductible amounts.  With
respect to any Contract, the initial Servicer shall cause the Seller to obtain
(i) a statement from the Obligor’s insurance agent or through other information
sources that the Manufactured Home was, at the time of origination of the
Contract, not in a federally designated special flood hazard area, or (ii)
evidence that, at the time of origination, flood insurance was in effect, which
coverage was 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
maintained by the Servicer shall contain a standard loss payee clause in favor
of the initial 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 force place coverage and pay such premiums out
of its own funds and may separately add such premium to the Obligor’s obligation
as provided by the Contract, but shall not add such premium to the remaining
principal balance of the Contract.  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, and if such advance for
insurance premiums is deemed by the Servicer to be nonrecoverable in its
reasonable opinion, the Servicer may reimburse itself from the Collection
Account for such Nonrecoverable Advance.

     

    
      
        
        

      

      
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    (b)           The
Servicer may, in lieu of causing individual Hazard Insurance Policies to be
maintained with respect to each Manufactured Home pursuant to Section 5.10(a), 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 on the Obligor’s interest
in the Contracts resulting from the absence or insufficiency of individual
Hazard Insurance Policies.  Any such blanket policy shall be
substantially in the form and in the amount carried by the Servicer as of the
date of this Agreement.  The Servicer shall pay the premium for such
policy on the basis described therein and shall deposit into the Collection
Account from its own funds any deductible amount with respect to claims under
such blanket insurance policy relating to the Contracts.  The Servicer
shall not, however, be required to deposit any deductible amount with respect to
claims under individual Hazard Insurance Policies maintained pursuant to Section 5.10(a).  If
the insurer under such blanket insurance policy shall cease to be acceptable to
the Servicer, the Servicer shall exercise its best reasonable efforts to obtain
from another insurer a replacement policy comparable to such
policy.

     

    (c)           With
respect to each Manufactured Home that has been repossessed in connection with a
defaulted Contract, the Servicer shall either (i) maintain one or more Hazard
Insurance Policies thereon or (ii) self-insure such Manufactured Homes and
deposit into the Collection Account from its own funds any losses caused by
damage to such Manufactured Home that would have been covered by a Hazard
Insurance Policy.

     

    (d)           The
Servicer shall keep in force throughout the term of this Agreement (i) a policy
or policies of insurance covering errors and omissions for failure to maintain
insurance as required by this Agreement and (ii) a fidelity
bond.  Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among Persons which service a
portfolio of manufactured housing installment sales contracts and installment
loan agreements having an aggregate principal amount of $10,000,000 or more and
which are generally regarded as servicers acceptable to institutional
investors.

     

    SECTION
5.11         Repossession; Delinquent
Contracts.  

     

    (a)           Consistent
with the standard of care specified in Section 5.2, the Servicer
shall, in its discretion, (a) commence procedures for the repossession of any
Manufactured Home or the foreclosure upon any Mortgaged Property, (b) sell the
related Contract, provided that such Contract is at least 90 days Delinquent, or
(c) take such other steps that, in the case of each of (a), (b) or (c) in the
Servicer’s reasonable judgment will maximize the receipt of principal and
interest or Net Liquidation Proceeds with respect to a Delinquent Contract
secured by such Manufactured Home or Mortgaged Property (which may include
retitling or filing a recorded assignment of the Mortgage) subject to the
requirements of the applicable state and federal law.  Notwithstanding
the standard of care specified in Section 5.2 and without
limiting the Servicer’s option in clause (b) of the preceding sentence, the
Servicer shall commence procedures for the repossession of any Manufactured Home
or the foreclosure upon any Mortgaged Property with respect to a Contract, and
to liquidate such Manufactured Home or Mortgaged Property, as soon as
commercially reasonably practicable after the time when such Contract becomes a
Defaulted Contract (or sooner in the Servicer’s reasonable
judgment).  Notwithstanding the foregoing provisions of this Section 5.11 or any other
provision of this Agreement, with respect to any Contract as to which the
Servicer has received actual notice of, or has actual knowledge of, the presence
of any toxic or hazardous substance on the related Mortgaged Property, the
Servicer shall not, on behalf of Mortgage SPV, either (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise or (ii)
otherwise acquire possession of, or take any other action with respect to, such
Mortgaged Property, if, as a result of any such action, Mortgage SPV would be
considered to hold title to, to be a “mortgagee-in-possession” of, or to be an
“owner” or “operator” of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:

     

    
      
        
        

      

      
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    (i)           such
Mortgaged Property is in compliance with applicable environmental laws or, if
not, that it would be in the best economic interest of Mortgage SPV or Credit
Agreement Agent to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and

     

    (ii)          there
are no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation, or that if any such materials are
present for which such action could be required, that it would be in the best
economic interest of Mortgage SPV and Credit Agreement Agent to take such
actions with respect to the affected Mortgaged Property.

     

    (b)           The
cost of the environmental audit report contemplated by Section 5.11(a) shall be
advanced by the Servicer as Servicing Advances, subject to the Servicer’s right
to be reimbursed therefor from the Collection Account as provided in Section 5.6(b)(ii) or 5.6(b)(v), as appropriate,
such right of reimbursement being prior to the rights of Mortgage SPV to receive
any amount in the Collection Account received in respect of the affected
Contract or other Contracts.

     

    (c)           If
the Servicer determines, as described above, that it is in the best economic
interest of Mortgage SPV and Credit Agreement Agent to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of Mortgage SPV and Credit Agreement Agent; provided, however, that the
Servicer shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure if the estimated costs of the environmental clean up, as estimated
in the environmental audit report, together with the Servicing Advances made by
the Servicer and the estimated costs of foreclosure or acceptance of a deed in
lieu of foreclosure exceeds the estimated value of the Mortgaged
Property.  The cost of any such compliance, containment, cleanup or
remediation shall be advanced by the Servicer, subject to the Servicer’s right
to be reimbursed therefor from the Collection Account as provided in Section 5.6(b)(ii) or 5.6(b)(v), as appropriate,
such right of reimbursement being prior to the rights of Mortgage SPV to receive
any amount in the Collection Account received in respect of the affected
Contract or other Contracts.

     

    
      
        
        

      

      
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    (d)           In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be consistent with Section 5.2.  In the
event that title to any Mortgaged Property is acquired in foreclosure or by deed
in lieu of foreclosure, the deed or certificate of sale shall be issued to
Mortgage SPV, or, at its election, to its nominee.

     

    SECTION
5.12         Subservicing
Arrangements.  

     

    The
Servicer may arrange for the subservicing of any Contract by a Subservicer
pursuant to a subservicing agreement; provided, however, that such subservicing
arrangement and the terms of the related subservicing agreement must provide for
the servicing of such Contracts in a manner consistent with the servicing
arrangements contemplated hereunder.  Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Servicer in servicing the Contracts include actions taken or to be taken by a
subservicer on behalf of the Servicer.  Notwithstanding the provisions
of any subservicing agreement, any of the provisions of this Agreement relating
to agreements or arrangements between the Servicer and a subservicer or
reference to actions taken through a subservicer or otherwise, the Servicer
shall remain obligated and liable to Mortgage SPV, the Seller and Credit
Agreement Agent for the servicing and administration of the Contracts in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Contracts.  All actions of each
subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Servicer with the same force and effect as if
performed directly by the Servicer.  The Servicer shall examine each
subservicing agreement and shall require each subservicer to maintain an errors
and omissions policy and a fidelity bond in the same minimum coverage amounts as
required by the Servicer pursuant to this Agreement.

     

    For
purposes of this Agreement, the Servicer shall be deemed to have received any
collections, recoveries or payments with respect to the Contracts that are
received by a Subservicer regardless of whether such payments are remitted by
the Subservicer to the Servicer.

     

    SECTION
5.13         Retitling; Security
Interests.  

     

    (a)           If,
at any time, a Service Transfer has occurred and the new Servicer is unable to
repossess or foreclose upon a Manufactured Home because the title document for
such Manufactured Home does not show Mortgage SPV as the holder of the first
priority security interest in the Manufactured Home, such Servicer shall take
all necessary steps to apply for a replacement title document showing Mortgage
SPV as the secured party; provided that the new Servicer shall be reimbursed by
Mortgage SPV for all reasonable expenses in connection with its responsibilities
under this Section
5.13.

     

    (b)           In
order to facilitate the Servicer’s actions, as described in Section 5.13(a), Mortgage SPV
shall provide the Servicer with any necessary power of attorney permitting it to
retitle the Manufactured Home.

     

    
      
        
        

      

      
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    (c)           If
the Servicer is still unable to retitle the Manufactured Home, the Servicer will
take all actions necessary to initiate replevin action upon the Manufactured
Home, including, as appropriate, the filing of any UCC-1 or UCC-2 financing
statements necessary to perfect the security interest in any Manufactured Home
that constitutes a fixture under the laws of the jurisdiction in which it is
located and all actions necessary to perfect the security interest in any
Manufactured Home that is 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.

     

    (d)           Notwithstanding
anything to the contrary in this Agreement, Credit Agreement Agent may require,
at Servicer’s expense under the conditions in the next sentence, that Credit
Agreement Agent’s and Mortgage SPV’s interest be noted on the title documents
relating to the Contracts, including, without limitation, on any Statement of
Ownership and Location with respect to a Manufactured Home located in the State
of Texas.  Such re-titling process will be carried out by the Servicer
if a Trigger Event occurs or by Mortgage SPV (or other party acceptable to
Credit Agreement Agent) if an Event of Termination occurs.  In order
to facilitate the Servicer’s or such other party’s actions, as described in this
Section 5.13(d),
Mortgage SPV shall provide the Servicer or such other party with any necessary
power of attorney permitting it to retitle the Manufactured
Home.  Servicer hereby appoints Credit Agreement Agent its attorney in
fact, with full power and authority in its place and stead and full power of
substitution and in the name of Servicer or otherwise, to execute and deliver
any document, agreement or instrument that Credit Agreement Agent deems
necessary or appropriate, and to make such filings or record such documents as
Credit Agreement Agent deems necessary or appropriate, in connection with any
such re-titling.

     

    SECTION
5.14         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 5.2, shall advance,
but only to the extent that the Servicer deems, in its sole judgment, such
advance recoverable, 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 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 Mortgage SPV and Credit Agreement Agent, the Servicer shall advance,
but only to the extent that the Servicer, in its sole judgment, deems such
advance recoverable, 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 5.14 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.  If Liquidation Proceeds are insufficient to reimburse the
Servicer for any such premiums, the amount of such insufficiency shall
constitute, and be reimbursable to the Servicer as, a Nonrecoverable
Advance.

     

    
      
        
        

      

      
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    SECTION
5.15         Independent Public
Accountants’ Servicing Report.  

     

    Not later
than June 30th of each
calendar year commencing in 2010, the Servicer, at its expense, shall cause a
nationally recognized firm of independent certified public accountants to
furnish to the Servicer a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that each of the Servicer has complied with certain
minimum servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of manufactured housing installment sales
contracts and installment loan agreements during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate.  In rendering its report such firm may rely, as to
matters relating to the direct servicing of manufactured housing installment
sales contracts and installment loan agreements by Sub-Servicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those
Sub-Servicers.  Immediately upon receipt of such report, the Servicer
shall, at its own expense, furnish a copy of such report to Mortgage SPV and
Credit Agreement Agent.

     

    ARTICLE
VI

    REPORTS
AND TAX MATTERS

     

    SECTION
6.1            Statements
to Credit Agreement Agent.  

     

    (a)           Based
on the information set forth in the Electronic File, the Servicer shall prepare
and make available to Credit Agreement Agent Credit Agreement Agent Report for
each month, within 20 days after the end of such month.

     

    (b)           Each
Credit Agreement Agent Report shall set forth the following:

     

    (i)           the
Pool Principal Balance of the Contracts and total number of Contracts as of the
date of such report;

     

    (ii)          the
total principal amounts received, including (a) scheduled principal payments,
(b) curtailments, (c) prepayments in full, and (d) Net Liquidation
Proceeds;

     

    (iii)         the
total scheduled interest amounts received;

     

    (iv)        the
total Monthly Servicing Fee paid to the Servicer and any servicing fees related
to any Successor Servicer;

     

    (v)         the
Weighted Average Net Contract Rate of all outstanding Contracts;

     

    
      
        
        

      

      
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    (vi)           the
number and aggregate principal balances of Contracts Delinquent (a) 31-60 days,
(b) 61-90 days, (c) 91-120 days and (d) 121 or more days;

     

    (vii)         the
number of Manufactured Homes that were repossessed during the reporting period,
the number of repossessed Manufactured Homes that remain in inventory as of the
last day of the reporting period and repossessed Manufactured Homes purchased by
the Seller or a subsidiary of the Seller from Mortgage SPV (during the reporting
period and cumulatively) by number of Contracts, aggregate Principal Balance of
such Contracts and aggregate purchase price;

     

    (viii)       
number of Contracts and aggregate Principal Balance of Contracts extended or
otherwise amended during the report period.

     

    (ix)           (a)
the number of Contracts and aggregate Principal Balance of Contracts in
foreclosure and bankruptcy, (b) the number of Contracts and aggregate Principal
Balance of Replaced Contracts during the reporting period, (c) the number of
Contracts and aggregate Principal Balance of Eligible Substitute Contracts
during the reporting period, (d) the percentage by aggregate Principal Balance
of Contracts of Obligors in bankruptcy but that have not missed any Scheduled
Payments and the percentage by aggregate Principal Balance of Contracts of
Obligors in bankruptcy that have missed a Scheduled Payment during the reporting
period, and (e) the percentage by aggregate Principal Balance of Contracts
subject to extensions, deferrals or modifications by the Servicer during the
reporting period;

     

    (x)           Average
Sixty-Day Delinquency Ratio as of such date;

     

    (xi)          Cumulative
Realized Losses as of such date;

     

    (xii)         Current
Realized Losses as of such date; and

     

    (xiii)        the
number of Contracts and aggregate Principal Balance of Contracts subject to a
voluntary prepayment during such report period.

     

    ARTICLE
VII

    SERVICE
TRANSFER

     

    SECTION
7.1           Event of
Termination.  

     

    “Event of Termination”
means the occurrence of any of the following:

     

    (a)           The
failure by the Servicer to deposit in the Collection Account any deposit
required to be made under the terms of this Agreement, which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure shall have been given to the Servicer by Mortgage SPV and
Credit Agreement Agent;

     

    (b)           Failure
on the Servicer’s part duly to observe or perform in any material respect any
covenant or agreement in this Agreement (other than a covenant or agreement
which is elsewhere in this Section 7.1 specifically dealt
with), which continues unremedied for 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 Mortgage SPV and Credit Agreement Agent;

     

    
      
        
        

      

      
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    (c)           Failure
of any representation or warranty of the Servicer in this Agreement to have been
true and correct in all material respects on and as of the date when
made;

     

    (d)           A
court or other governmental authority having jurisdiction in the premises shall
have entered a decree or order for relief in respect of the Servicer in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Servicer, as the
case may be, or for any substantial liquidation of its affairs, and such order
remains undischarged and unstayed for at least 60 days;

     

    (e)           The
Servicer shall have commenced a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall have
consented to the entry of an order for relief in an involuntary case under any
such law, or shall have consented to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of the Servicer or for any substantial part of its property,
or shall have made any general assignment for the benefit of its creditors, or
shall have failed to, or admitted in writing its inability to, pay its debts as
they become due, or shall have taken any corporate action in furtherance of the
foregoing;

     

    (f)           So
long as the Seller is an affiliate of the Servicer, any failure of the Seller,
to repurchase, or substitute an Eligible Substitute Contract for, any Contract
as required.

     

    SECTION
7.2           Transfer.  

     

    (a)           If
an Event of Default (as defined in the Credit Agreement) or Event of Termination
has occurred and is continuing, Mortgage SPV or Credit Agreement Agent may, by
notice in writing to the Servicer, terminate all (but not less than all) of the
Servicer’s management, administrative, servicing and collection functions (such
termination being herein called a “Service
Transfer”).  On receipt of such notice (or, if later, on a date
designated therein), all authority and power of the Servicer under this
Agreement, whether with respect to the Contracts, the Contract Files, the
Land-and-Home Contract Files or otherwise (except with respect to the Collection
Account, the transfer of which shall be governed by Section 7.6), shall pass to
such Person as is designated by Credit Agreement Agent (the “Successor Servicer”)
and, without limitation, the Successor Servicer is authorized and empowered to
execute and deliver on behalf of the Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments (including, without limitation,
documents required to make Mortgage SPV the sole lienholder or legal title
holder of record of each Manufactured Home) and to do any and all acts or things
necessary or appropriate to effect the purposes of such notice of
termination.  Each of the Seller and the Servicer agrees to cooperate
with the Successor Servicer in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Successor Servicer for administration by it of all cash amounts
which shall at the time be held by the Servicer for deposit, or have been
deposited by the Servicer, in the Collection Account, or for its own account in
connection with its services hereafter or thereafter received with respect to
the Contracts and the execution of any documents required to make Mortgage SPV
the sole lienholder or legal title holder of record in respect of each
Manufactured Home.  The Servicer shall be entitled to receive any
other amounts which are payable to the Servicer under the Agreement, at the time
of the termination of its activities as Servicer.  The Servicer shall
transfer to the successor servicer (i) the Servicer’s records relating to the
Contracts in such electronic form as the successor servicer may reasonably
request and (ii) any Contracts, Contract Files and Land-and-Home Contract Files
in the Servicer’s possession.  Any and all costs and expenses incurred
by the Successor Servicer in connection with the transfer of servicing functions
as provided herein, including, without limitation, the cost of delivering the
Contracts and related files to the Successor Servicer, shall be paid by Mortgage
SPV.

     

    
      
        
        

      

      
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    (b)           The
Successor Servicer shall not be liable to and shall be held harmless by Mortgage
SPV, the Seller and the initial Servicer for any and all claims arising from or
related to (i) any missing or lost Contracts, Contract Files or related
documents or (ii) any inaccurate, incomplete or missing information reasonably
necessary for the servicing of the Contracts, which is not the direct result of
the willful misfeasance or negligence of the Successor Servicer.

     

    SECTION
7.3           Successor
Servicer to Act, Appointment of Successor. 

     

    (a)           On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.2, the
Successor Servicer, upon two (2) Business Days’ written notice from Mortgage SPV
or Credit Agreement Agent of such Service Transfer to the Successor Servicer,
shall be the successor in all respects to the servicing rights, duties and
responsibilities of the Servicer (in its capacity as servicer under this
Agreement) which arise after the effective date of such Service Transfer and the
Servicer (except as provided herein) shall be relieved of such responsibilities,
duties and liabilities arising after such Service Transfer; provided, however,
that (i) the Successor Servicer will not assume any obligations of the Seller
pursuant to Section 3.5,
and (ii) the Successor Servicer shall not be liable for any acts or omissions of
any prior Servicer accruing prior to such Service Transfer or for any breach or
default by any prior Servicer of any of its obligations contained herein or in
any related document or agreement and (iii) the prior Servicer shall remain
liable for any acts or omissions of such prior Servicer occurring prior to such
Service Transfer or for any breach by such Servicer of any of its obligations
contained herein or in any related document or agreement.  As
compensation therefor, the Successor Servicer (and not the replaced Servicer)
shall be entitled to receive the Monthly Servicing Fee.  Furthermore,
the Successor Servicer shall be entitled to all rights of the Servicer in
connection with its responsibilities under this Agreement, including
reimbursement rights for advances as provided herein.  Pending
appointment of a successor to the Servicer hereunder, the Servicer shall act in
such capacity until a successor servicer assumes such responsibilities, duties
or liabilities.

     

    (b)           The
Successor Servicer shall be entitled to rely upon the representations,
warranties and covenants made by the Seller and the initial Servicer set forth
in this Agreement and any related document, and the Successor Servicer shall be
held harmless by the Seller and the initial Servicer for any and all claims,
liabilities, obligations, losses damages, payments costs or expenses (including
reasonable attorneys’ fees) of any kind whatsoever arising from or related to
any breach, inaccuracy, default or nonperformance of such representations,
warranties or covenants of the Seller or the initial Servicer as set forth
herein.

     

    
      
        
        

      

      
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    SECTION
7.4           Notification
to Mortgage SPV and Credit Agreement Agent.  

     

    Promptly
following the occurrence of any Event of Termination, the Servicer shall give
written notice thereof to Mortgage SPV and Credit Agreement Agent.

     

    SECTION
7.5           Effect of
Transfer. 

     

    (a)           After
the Service Transfer, the Successor Servicer may notify Obligors to make,
directly to the Successor Servicer at an Eligible Account, payments that are due
under the Contracts after the effective date of the Service
Transfer.

     

    (b)           After
the Service Transfer, (i) the replaced Servicer shall have no further
obligations with respect to the management, administration, servicing or
collection of the Contracts, and the Successor Servicer shall have all of such
obligations, and (ii) the replaced Servicer will transmit or cause to be
transmitted directly to the Successor Servicer, promptly on receipt and in the
same form in which received, any amounts (properly endorsed where required for
the Successor Servicer to collect them) received by such replaced Servicer or
any of its Affiliates as payments upon or otherwise in connection with the
Contracts.

     

    (c)           A
Service Transfer shall not affect the rights and duties of the parties hereunder
(including but not limited to the indemnities of the Servicer and the Seller
pursuant to Article IX
and Section 3.5) other
than those relating to the management, administration, servicing or collection
of the Contracts following the effective Service
Transfer.  Notwithstanding anything to the contrary in this Agreement,
both prior to and following a Service Transfer, any obligation that is
specifically required of the “initial Servicer” shall remain an obligation of
the initial Servicer, regardless of any termination or Service
Transfer.

     

    SECTION
7.6           Transfer of
Collection Account. 

     

    Notwithstanding
the provisions of Section
7.2, if an Event of Termination shall occur and be continuing, the
replaced Servicer shall, after two days’ written notice from Credit Agreement
Agent, or in any event within five days after the occurrence of the Event of
Termination, promptly transfer all funds in the Collection Account to an
Eligible Account not in the name of the replaced Servicer, which shall
thereafter be deemed the Collection Account for the purposes
hereof.  Upon a Service Transfer, the Collection Account shall be
transferred to an Eligible Account as directed by the Successor
Servicer.

     

    ARTICLE
VIII

    INDEMNITIES;
CERTAIN MATTERS RELATING TO THE SELLER AND THE
SERVICER

     

    SECTION
8.1           Seller’s
Indemnities.  

     

    The
Seller will defend and indemnify Mortgage SPV, Credit Agreement Agent and any
agents thereof against any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel and expenses of
litigation of any third-party claims (i) arising out of or resulting from the
origination of any Contract (including but not limited to truth in lending
requirements) or the servicing of such Contract prior to its transfer to
Mortgage SPV (but only to the extent such cost, expense, loss, damage, claim or
liability is not provided for by the Seller repurchase of such Contract pursuant
to Section 3.5) or (ii)
arising out of or resulting from the use or ownership of any Manufactured Homes
by the Seller or the Servicer or any Affiliate of either.  This Section 8.1 shall survive
termination of this Agreement.

     

    
      
        
        

      

      
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    SECTION
8.2           Liabilities
to Obligors.  

     

    No
obligation or liability to any Obligor under any of the Contracts is intended to
be assumed by Mortgage SPV 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, Mortgage SPV expressly disclaims such
assumption.

     

    SECTION
8.3           Tax
Indemnification.  

     

    The
Seller agrees to pay, and to indemnify, defend and hold harmless Mortgage SPV
and Credit Agreement Agent from, any taxes which may at any time be asserted
with respect to, and as of the date of, the transfer of the Transferred Property
to Mortgage SPV, including, without limitation, any sales, gross receipts,
general corporation, personal property, privilege or license taxes and costs,
expenses and reasonable counsel fees in defending against the same, whether
arising by reason of the acts to be performed by the Seller, the Servicer,
Credit Agreement Agent or Mortgage SPV under this Agreement or imposed against
Mortgage SPV or otherwise.

     

    SECTION
8.4           Servicer’s
Indemnities.  

     

    The
Servicer shall indemnify and hold harmless Mortgage SPV, Credit Agreement Agent
and each of their officers, directors, agents and employees from and against any
loss, liability, expense, damage or injury suffered or sustained by reason of
such Servicer’s willful misfeasance, bad faith or negligence in the performance
of its activities in servicing or administering the Contracts pursuant to this
Agreement, including, but not limited to, any judgment, award, settlement,
reasonable fees of counsel of its selection and other costs or expenses incurred
in connection with the defense of any actual or threatened action, proceeding or
claim related to the Servicer’s willful misfeasance, bad faith or
negligence.  Any such indemnification shall not be payable from the
assets of Mortgage SPV.  The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof.  The provisions of this Section 8.4 shall survive
termination of this Agreement.

     

    SECTION
8.5           Operation
of Indemnities.  

     

    Indemnification
under this Agreement shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation.  If any indemnitor has
made any indemnity payments to any indemnitee pursuant to this Agreement and
such indemnitee thereafter collects any of such amounts from others, such
indemnitee will repay such amounts collected to the applicable indemnitor,
without interest.

     

    
      
        
        

      

      
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    SECTION
8.6           Liability
of the Seller and the Servicer.  

     

    The
Seller and the Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Seller
or the Servicer, as the case may be, herein.

     

    SECTION
8.7           Merger or
Consolidation of, or Assumption of the Obligations of, the Seller or the
Servicer.  

     

    Any
Person into which the Seller or the Servicer may be merged or consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Seller or the Servicer shall be a party, or any Person succeeding to the
business of the Seller or the Servicer, shall be the successor of the Seller or
the Servicer, as the case may be, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that (i) the
successor Servicer shall be  approved by Credit Agreement Agent and
qualified to act as Servicer of the Contracts under applicable federal and state
laws and regulations, and services not less than an aggregate of $50,000,000 in
outstanding principal amount of manufactured housing conditional sales contracts
and installment loan agreements (exclusive of the Transferred Property) and (ii)
such merger, conversion or consolidation could not be reasonably expected to
result in a material adverse change in (A) the business, financial condition,
results of operations or properties of Servicer, on a consolidated basis with
its subsidiaries, or (B) the ability of Servicer to perform any of its
obligations hereunder, unless approved by Credit Agreement Agent.

     

    SECTION
8.8           Limitation
on Liability of Servicer.

     

    (a)           Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to Mortgage SPV for any action taken or
for refraining from the taking of any action by the Servicer in good faith
pursuant to this Agreement, or for errors in judgment; provided, however,
that this Section 8.8
shall not protect the Servicer or any such Person against any liability which
would otherwise be imposed by reason of its willful misfeasance, bad faith or
negligence in the performance of duties of the Servicer hereunder or by reason
of its reckless disregard of its obligations and duties hereunder; provided, further,
that this provision shall not be construed to entitle the Servicer to indemnity
in the event that amounts advanced by the Servicer to retire any senior lien
exceed Net Liquidation Proceeds realized with respect to the related
Contract.  The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matter arising
hereunder.  The Servicer and any director or officer or employee or
agent of the Servicer shall be indemnified by Mortgage SPV and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement, other than any loss, liability or expense
related to any specific Contract or Contracts (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this Agreement)
and any loss, liability or expense incurred by reason of its own willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of its reckless disregard of its obligations and duties hereunder; and
such amounts shall be payable only pursuant to Section 5.6(b)(vi) and only
after all amounts then due and payable under the Credit Agreement or any other
Loan Document (as defined in the Credit Agreement) have been paid to the Credit
Agreement Agent.  The Servicer may undertake any such action which it
may deem necessary or desirable in respect of this Agreement, and the rights and
duties of the parties hereto and the interests of Mortgage SPV
hereunder.  In such event, the reasonable legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of Mortgage SPV, and the Servicer shall be entitled to be reimbursed
therefor only after all amounts then due and payable under the Credit Agreement
or any other Loan Document (as defined in the Credit Agreement) have been paid
to the Credit Agreement Agent.  The Servicer’s right to indemnity or
reimbursement pursuant to this Section 8.8 shall survive any
resignation or termination of the Servicer with respect to any losses, expenses,
costs or liabilities arising prior to such resignation or termination (or
arising from events that occurred prior to such resignation or
termination).  This Section 8.8 shall apply to the
Servicer solely in its capacity as Servicer hereunder and in no other
capacities.

     

    
      
        
        

      

      
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    (b)           Notwithstanding
any provision to the contrary contained in this Agreement, the parties hereto
acknowledge and agree that the Successor Servicer is not assuming and shall not
be liable or responsible for any liabilities, obligations, losses, damages or
expenses (including reasonable attorneys’ fees) arising from or related to (i)
any act or omission of any prior Servicer on or prior to the Service Transfer
date; (ii) any act or omission of the Credit Agreement Agent, any prior Servicer
or the Seller prior to, on or following the Service Transfer date, or (iii) any
breach or default by any prior Servicer or the Seller of their respective
duties, obligations, covenants, representations and warranties contained in this
Agreement or in any related document or agreement, whether such breach or
default occurs or occurred prior to, on or following the Service Transfer
date.

     

    SECTION
8.9           Servicer
Not to Resign.  

     

    Subject
to the provisions of Section
8.7, the Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement, or (ii) if the Servicer has proposed a successor servicer to Mortgage
SPV and Credit Agreement Agent in writing and such proposed successor servicer
is reasonably acceptable to Mortgage SPV and Credit Agreement Agent; provided,
however, that no such resignation by the Servicer shall become effective until
such successor servicer shall have assumed the Servicer’s responsibilities and
obligations hereunder or Mortgage SPV and Credit Agreement Agent shall have
designated a successor servicer in accordance with Section 7.2.  Any
such resignation shall not relieve the Servicer of responsibility for any
provision hereof that is specified as surviving the resignation or termination
of the Servicer or the termination of this Agreement.  Any such
determination permitting the resignation of the Servicer pursuant to clause (i) above shall be
evidenced by an opinion of counsel to Servicer, acceptable to Credit Agreement
Agent and Mortgage SPV, to such effect delivered to Credit Agreement Agent and
Mortgage SPV.

     

    
      
        
        

      

      
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    ARTICLE
IX

    MISCELLANEOUS

     

    SECTION
9.1           Servicer
Not to Assign Duties or Resign; Delegation of Servicing
Functions.  

     

    The
Servicer may not sell or assign its rights and duties as Servicer, except as
expressly provided for herein; provided that the Servicer may pledge or assign
the right to receive all or any portion of the Monthly Servicing Fee payable to
it to Credit Agreement Agent.

     

    SECTION
9.2           Termination.  

     

    (a)           This
Agreement shall terminate on the earlier of (a) the date on which all
Obligations under the Credit Agreement have been paid in full and (b) the date
on which the Pool Principal Balance is reduced to zero and all amounts payable
to Mortgage SPV on such date have been distributed to Mortgage SPV; provided
that the Servicer’s and the Seller’s representations and warranties and
indemnities by the Seller and the Servicer shall survive
termination.

     

    SECTION
9.3           Assignment
or Delegation by Seller.  

     

    Except as
specifically authorized hereunder, and except for its obligations as Servicer
which are dealt with under Article V and Article VII, the Seller may
not convey and assign or delegate any of its rights or obligations hereunder
absent the prior written consent of Mortgage SPV and Credit Agreement Agent, and
any attempt to do so without such consent shall be void.

     

    Notwithstanding
the foregoing, any person into which the Seller may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Seller shall be a party, or any Person succeeding to the business of
the Seller, shall be the successor of the Seller 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.  The
Seller shall promptly notify Mortgage SPV and Credit Agreement Agent of any such
merger to which it is a party.

     

    SECTION
9.4           Amendment.  

     

    This
Agreement may be amended from time to time in a writing signed by both CPM and
Mortgage SPV and consented to in writing by Credit Agreement
Agent.  No consent to the departure from any terms hereof, or waiver
of any such terms, shall be valid unless made in a writing signed by the party
from whom such consent or waiver is sought and Credit Agreement
Agent.

     

    SECTION
9.5           Notices.  

     

    All
communications and notices pursuant hereto to Mortgage SPV, the Servicer or the
Seller shall be in writing and delivered or mailed to it at the appropriate
following address:

     

    
      
        
        

      

      
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    If to
Mortgage SPV, to it at:

     

    15303
Dallas Parkway, Suite 900

    Addison,
Texas, 75001

    (972)
764-9200

     

    If to the
Seller or the Servicer, to it at:

     

    15303
Dallas Parkway, Suite 900

    Addison,
Texas, 75001

    (972)
764-9200

     

    If to
Credit Agreement Agent, to it at:

     

    Virgo
Service Company LLC

    677
Madison Avenue, 11th
Floor

    New York,
New York 10065

     

    or at
such other address as the party may designate by notice to the other parties
hereto, which notice shall be effective when received.

     

    SECTION
9.6           Merger and
Integration.  

     

    Except as
specifically stated otherwise herein, this Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this
Agreement.  This Agreement may not be modified, amended, waived or
supplemented except as provided herein.

     

    SECTION
9.7           Headings.  

     

    The
headings herein are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof.

     

    SECTION
9.8           Governing
Law.  

     

    THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     

    SECTION
9.9           Recordation
of Agreement.  

     

    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 Mortgage SPV or Credit Agreement Agent upon its
election.

     

    
      
        
        

      

      
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    SECTION
9.10        Severability of
Provisions.  

     

    If anyone
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.

     

    SECTION
9.11        Third-Party
Beneficiaries.  

     

    This
Agreement will inure to the benefit of and be binding upon the parties hereto
and Credit Agreement Agent, and each of their respective successors and
permitted assigns.  Except as otherwise provided in this Agreement, no
other person will have any right or obligation hereunder.

     

    SECTION
9.12        Counterparts.  

     

    This
Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

     

    SECTION
9.13        Effect of Headings and Table
of Contents.  

     

    The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

     

    SECTION
9.14        Right of Credit Agreement
Agent to Exercise Rights of Mortgage SPV.

     

    Notwithstanding
anything to the contrary in this Agreement, Mortgage SPV agrees that Credit
Agreement Agent shall have the right to exercise all rights of Mortgage SPV as
specified under this Agreement.

     

    [Signatures
to follow]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers all as of the day and year first above
written.

     

    COUNTRYPLACE
MORTGAGE
HOLDINGS, LLC, as Mortgage SPV

    

    
      
        
          	
                  By

                	
                  /s/ Larry Keener

                
	 
      	
                  Name:
      Larry Keener

                
	 
      	
                  Title:
      Vice President

                

        

      

    

    

    COUNTRYPLACE
MORTGAGE, LTD.  as
Seller and as Servicer

    By:
COUNTRYPLACE ACCEPTANCE
GP, LLC, as General Partner

    By:
COUNTRYPLACE ACCEPTANCE
CORPORATION, as Sole Member

    

    
      
        
          	
                  By

                	
                  /s/ Larry Keener

                
	 
      	
                  Name:
      Larry Keener

                
	 
      	
                  Title:
      Vice President

                

        

      

    

     

    VIRGO
SERVICE COMPANY LLC, as
Credit Agreement Agent

     

    
      
        
          	
                  By

                	
                  /s/ Jesse C. Watson

                
	 
      	
                  Name:
      Jesse C. Watson

                
	 
      	
                  Title:
      Managing Member

                

        

      

    

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    

    Exhibit
A

    to
Mortgage Sale, Contribution and Servicing Agreement

     

    FORM OF BILL OF SALE AND
ASSIGNMENT

     

    In
accordance with that certain Sale, Contribution and Servicing Agreement, dated
as of January 29, 2010 (as amended, restated, supplemented or modified from time
to time in accordance with the provisions thereof, the “Agreement”), among
CountryPlace Mortgage, Ltd., a Texas limited partnership (“CPM”), as the seller
and the servicer, CountryPlace Mortgage Holdings, LLC, a Delaware limited
liability company (“Mortgage SPV”), and
Virgo Service Company LLC, a Delaware limited liability company, as
administrative agent and as collateral agent under the Credit Agreement defined
therein, the Seller hereby transfers, assigns, delivers, sells, contributes sets
over and otherwise conveys to Mortgage SPV all of Seller’s right, title and
interest in and to the following, whether now existing or hereafter acquired and
wherever located: (1) each Contract listed in Schedule 1 attached hereto and
any related Mortgage, including without limitation all right, title and interest
in and to the Collateral Security, including without limitation all rights to
receive payments on or with respect to the Contracts, (2) every Hazard Insurance
Policy relating to a Manufactured Home securing a Contract for the benefit of
the creditor of such Contract, (3) the proceeds from the Errors and Omissions
Protection Policy and all rights under any blanket hazard insurance policy to
the extent they relate to the Manufactured Homes, (4) all documents contained in
the Contract Files and the Land-and-Home Contract Files, (5) the Collection
Account and all money, funds or investment property held therein, and (6) all
proceeds and products of or in any way derived from any of the
foregoing.  Capitalized terms used herein but not defined herein have
the meanings assigned to them in the Agreement.

     

    [Each
Contract listed in Schedule
1 attached hereto constitutes an Eligible Substitute Contract.]1

     

    IN
WITNESS WHEREOF, the undersigned has caused this Bill of Sale and Assignment to
be duly executed this [__________].

     

    
      
        
          
            	
                    COUNTRYPLACE
      MORTGAGE, LTD.  as Seller
and as Servicer

                  
	
                    By:
      COUNTRYPLACE ACCEPTANCE GP, LLC,
as General Partner

                  
	
                    By:
      COUNTRYPLACE ACCEPTANCE CORP., as
Sole
Member

                  

          

        

      

    

     

    
      
        
          	 
      	
                  By

                	
                   

                
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

      

    

    

    COUNTRYPLACE
MORTGAGE
HOLDINGS, LLC, as Mortgage SPV

    
       

      
        
1 Include
bracketed text in Bill of Sale and Assignment to be delivered pursuant to Section 3.5(b) of the
Agreement.

    

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  By

                	
                   

                
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    

    Schedule
1

    to
Bill of Sale and Assignment

     

    CONTRACTS

     

    [see
attached]

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    Schedule
1

    to
Mortgage Sale, Contribution and Servicing Agreement

     

    LIST OF
CONTRACTS

     

    [see
attached]

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Schedule
2

    to
Mortgage Sale, Contribution and Servicing Agreement

     

    POOL
STRATIFICATION

     

    [see
attached]

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Schedule
3

    to
Mortgage Sale, Contribution and Servicing Agreement

     

    SPECIFIED
CONTRACTS

     

    ACCOUNT
NUMBER

     

    20070102127280

    20080402130388

    20050701916789

    20070702125303

    20071002126116

    20080302129895

    20070102127298

    20071002126009

    20080502130866

    20070602127152

    20070502120991

    20070702124694

    20071202128805

    20040301395409

    20040501610433

    20070502098271

    20070902123264

    20070402127724

    20070802120526

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Schedule
4

    to
Mortgage Sale, Contribution and Servicing Agreement

     

    SECOND LIEN
MORTGAGES

     

    ACCOUNT
NUMBER

     

    20070102127298

    20090402153280

    20090502153916

    

    
      
        
        

      

      
        1EXHIBIT
10.4

    

    BANK OF
SOUTH CAROLINA CORPORATION

    

    1998
OMNIBUS STOCK INCENTIVE PLAN

    

    Board
Approved January 15, 1998

    Shareholder
Approved April 14, 1998

    

    Effective
April 14, 1998

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BANK
OF SOUTH CAROLINA CORPORATION

    

    1998 OMNIBUS STOCK INCENTIVE
PLAN

    

    
      	
              1.01

            	
              Agreement means
      a written agreement (including any amendment or supplement thereto)
      between BKSC and a Participant specifying the terms and conditions of an
      award of an Option granted to such
Participant.

            

    

    

    
      	
              1.02

            	
              Code means the
      Internal Revenue Code of 1986, as
amended.

            

    

    

    
      	
              1.03

            	
              Board means the
      Board of Directors of BKSC.

            

    

    

    
      	
              1.04

            	
              Date of
      Exercise means the date that the Option price is received by
      BKSC.

            

    

    

    
      	
              1.05

            	
              Fair Market
      Value means, on any given date, the closing price of BKSC common
      stock as reported on the Nasdaq Small Capitalization Market.  If
      BKSC common stock was not traded on the Nasdaq Small Capitalization Market
      on such date, then Fair Market
      Value is determined with reference to the next preceding day that
      BKSC common stock was so traded.

            

    

    

    
      	
              1.06

            	
              Legal
      Disability means that a Participant is permanently and totally
      disabled within the meaning of Code section
  22(e)(3).

            

    

    

    
      	
              1.07

            	
              Plan means the
      Bank of South Carolina Corporation 1998 Omnibus Stock Incentive
      Plan.

            

    

    

    
      	
              1.08

            	
              Retirement
      means that a Participant has separated from service on or after his
      earliest early retirement date under The Bank of South Carolina Employee
      Stock Ownership Plan and Trust or such tax-qualified pension or profit
      sharing plan maintained by BKSC or a Subsidiary in which he
      participates.

            

    

    

    
      	
              1.09

            	
              BKSC means Bank
      of South Carolina Corporation.

            

    

    

    
      	
              1.10

            	
              BKSC Common
      Stock means the common stock, no par value, of
  BKSC.

            

    

    

    
      	
              1.11

            	
              Option means a
      stock option that entitles the holder to purchase from BKSC a stated
      number of shares of BKSC common stock at the price set forth in an
      Agreement.

            

    

    

    
      	
              1.12

            	
              Participant
      means an employee of BKSC or of a Subsidiary, including an employee who is
      a member of the Board, or a non-employee who satisfies the requirements of
      Article IV and is selected by the Committee to receive an
      Option.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
II

    

    PURPOSES

    

    The Plan
is intended to assist BKSC in recruiting and retaining employees with ability
and initiative by enabling employees to participate in its future success and to
associate their interests with those of BKSC and its
shareholders.  The Plan is intended to permit the grant of both
Options qualifying under Code section 422 (“incentive stock options”) and
Options not so qualifying.  No Option that is intended to be an
incentive stock option shall be invalid for failure to qualify as an incentive
stock option.  The proceeds received by BKSC from the sale of BKSC
common stock pursuant to this Plan shall be used for general corporate
purposes.

    

    ARTICLE
III

    

    ADMINISTRATION

    

    Except as
provided in this Article III, the Plan shall be administered by the
Committee.  The Committee shall have authority to grant Options upon
such terms (not inconsistent with the provisions of this Plan) as the Committee
may consider appropriate.  Such terms may include conditions (in
addition to those contained in this Plan) on the exercisability of all of any
part of an Option.  Notwithstanding any such condition, the Committee
may, in its discretion, accelerate the time at which any Option may be
exercised.  In addition, the Committee shall have complete authority
to interpret all provisions of this Plan; to prescribe the form of Agreements;
to adopt, amend and rescind rules and regulations pertaining to the
administration of the Plan; and to make all other determinations necessary or
advisable for the administration of this Plan.  The express grant in
the Plan of any specific power to the Committee shall not be construed as
limiting any power or authority of the Committee.  Any decision made,
or action taken, by the Committee or in connection with the administration of
this Plan shall be final and conclusive.  No member of the Committee
shall be liable for any act done in good faith with respect to this Plan or any
Agreement or Option.  All expenses of administering this Plan shall be
borne by BKSC.

    

    The
Committee, in its discretion, may delegate to one or more officers of BKSC all
or part of the Committee’s authority and duties with respect to Participants who
are not subject to the reporting and other provisions of Section 16 of the
Securities and Exchange Act of 1934, as in effect from time to
time.  In the event of such delegation, and as to matters encompassed
by the delegation, references in the Plan to the Committee shall be interpreted
as a reference to the Committee’s delegate or delegates.  The
Committee may revoke or amend the terms of a delegation at any time but such
action shall not invalidate any prior actions of the Committee’s delegate or
delegates that were consistent with the terms of the Plan.

    

    ARTICLE
IV

    

    ELIGIBILITY

    

    
      	
              4.01

            	
              General.  Any
      employee of BKSC or of any Subsidiary (including any corporation that
      becomes a Subsidiary after the adoption of this Plan) is eligible to
      participate in this Plan if the Committee, in its sole discretion,
      determines that such person has contributed or can be expected to
      contribute to the profits or growth of BKSC or a
      Subsidiary.  Any such employee may be granted
      Options.  A Director of BKSC who is an employee of BKSC or a
      Subsidiary may be granted Options under this Plan.  A member of
      the Committee may not participate in this Plan during the time that his
      participation would prevent the Committee from being “disinterested” for
      purposes of Securities and Exchange Commission Rule 16b-3 as in effect
      from time to time.

            

    

    

    
      	
              4.02

            	
              Grants.  The
      Committee will designate individuals to whom Options are to be granted and
      will specify the number of shares of BKSC common stock subject to each
      award or grant.  All Options granted under this Plan shall be
      evidenced by Agreements which shall be subject to the applicable
      provisions of this Plan and to such other provisions as the Committee may
      adopt.  No Participant may be granted incentive stock options
      (under all incentive stock option plans of BKSC and its Subsidiaries)
      which are first exercisable in any calendar year for stock having an
      aggregate Fair Market Value (determined as of the date an option is
      granted) exceeding $100,000.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ARTICLE
V

    

    STOCK SUBJECT TO
PLAN

    

    
      	
              5.01

            	
              Source of
      Shares.  Upon the exercise of an Option, BKSC may deliver
      to the Participant authorized but unissued BKSC Common
    Stock.

            

    

    

    
      	
              5.02

            	
              Maximum Number of
      Shares.  The maximum aggregate number of shares of BKSC
      common stock that may be issues pursuant to the exercise of Options is One
      Hundred Thousand subject to increases and adjustments as provided in this
      Article V and Article XI.

            

    

    

    
      	
              5.03

            	
              Incentive Stock
      Options.  Section 5.02 to the contrary notwithstanding,
      the maximum aggregate number of shares of BKSC common stock that may be
      issued pursuant to the exercise of Options that are incentive stock
      options granted under this Plan is One Hundred Eighty
      Thousand.

            

    

    

    
      	
              5.04

            	
              Forfeitures,
      etc.  If an Option is terminated, in whole or in part,
      for any reason other than its exercise, the number of shares of BKSC
      common stock allocated to the Option or portion thereof may be reallocated
      to other Options to be granted under this
Plan.

            

    

    

    ARTICLE
VI

    

    OPTION
PRICE

    

    The price
per share for BKSC common stock purchased on the exercise of an Option shall be
determined by the Committee on the date of grant.  The price per share
for BKSC common stock purchased on the exercise of any incentive stock option
shall not be less than one hundred percent (100%) of the Fair Market Value on
the date the Option is granted.

    

    ARTICLE
VII

    

    EXERCISE OF
OPTIONS

    

    
      	
              7.01

            	
              Maximum Option
      Period.  The maximum period in which an Option may be
      exercised shall be determined by the Committee on the date of grant except
      that no Option that is an incentive stock option shall be exercisable
      after the expiration of ten years from the date the Option was
      granted.  The terms of any Option may provide that it is
      exercisable for a period less than such maximum
  period.

            

    

    

    
      	
              7.02

            	
              Nontransferability.  Any
      Option granted under this Plan shall be  nontransferable except
      by will or by the laws of descent and distribution.  In the
      event of any such transfer, the Option must be transferred to the same
      person or persons or entity or entities.  During the lifetime of
      a Participant to whom an Option is granted, the Option may be exercised
      only by the Participant.  No right or interest of a Participant
      in any Option shall be liable for, or subject to, any lien, obligation or
      liability of such Participant.

            

    

    

    ARTICLE
VIII

    

    METHOD OF
EXERCISE

    

    
      	
              8.01

            	
              Exercise.  An
      Option granted under this Plan shall be deemed to have been exercised on
      the Date of Exercise.  Subject to the provisions of Articles VII
      and X, an Option may be exercised in whole at any time or in part from
      time to time at such times and in compliance with such requirements as the
      Committee shall determine.  An Option granted under this Plan
      may be exercised with respect to any number of whole shares less than the
      full number of whole shares  for which the Option could be
      exercised.  A partial exercise of an Option shall not affect the
      right to exercise the Option from time to time in accordance with this
      Plan and the applicable Agreement with respect to remaining shares subject
      to the Option.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              8.02

            	
              Payment.  Unless
      otherwise provided by the Agreement, payment of the Option price shall be
      made by Cashiers Check.  If the Agreement provides, payment of
      all or part of the Option price may be made by surrendering shares of BKSC
      common stock to BKSC.  If BKSC common stock is used to pay all
      of part of the Option price, the shares surrendered must have a Fair
      Market Value (determined as of the day preceding the Date of Exercise)
      that is not less than such price or part
  thereof.

            

    

    

    
      	
              8.03

            	
              Shareholder
      Rights.  No Participant shall have any rights as a
      stockholder with respect to shares subject to an Option until the Date of
      Exercise of such Option.

            

    

    

    ARTICLE
IX

    

    ADJUSTMENT UPON CHANGE IN
BKSC COMMON STOCK

    

    If all or
any portion of the Option is exercised subsequent to any stock dividend, split
up, recapitalization, combination or exchange of shares, merger, consolidation,
acquisition of property or stock, separation, reorganization, or a transaction
to which Section 424 of the Internal Revenue Code applies, or other similar
change or transaction of or by BKSC, as a result of which shares of any class
shall be issued in respect of outstanding shares of the class covered by the
Option or shares of the class covered by the Option shall be changed into the
same or a different number of shares of the same or another class or classes,
the person or persons so exercising such an Option shall receive, for the
aggregate option price payable upon such exercise of the Option, the aggregate
number and class of shares equal to the number and class of shares the Optionee
would have had on the date of exercise had the shares been purchased for the
same aggregate price at the date the Option was granted and had not been
disposed of, taking into consideration any such stock dividend, split up,
recapitalization, combination or exchange of shares, merger, consolidation,
acquisition of property or stock, separation, reorganization or other similar
change or transaction; provided, however,
that no fractional share shall be issued upon any such exercise and the
aggregate price paid shall be appropriately reduced on account of any fractional
share not issued.

    

    ARTICLE
X

    

    COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES

    

    No option
shall be exercisable and no BKSC common stock shall be issued under this Plan
except in compliance with all applicable federal and state laws and regulations
(including, without limitation, withholding tax requirements) and the rules of
any domestic stock exchanges on which BKSC’s shares may be
listed.  BKSC shall have the right to rely on an opinion of its
counsel as to such compliance.  Any share certificate issued to
evidence BKSC common stock for which an Option is exercised may bear such
legends and statements as the Committee may deem advisable to assure compliance
with federal and state laws and regulations.  No Option shall be
exercisable and no BKSC common stock shall be issued under this Plan until BKSC
has obtained such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.

    

    ARTICLE
XI

    

    GENERAL
PROVISIONS

    

    
      	
              13.01

            	
              Effect on
      Employment.  Neither the adoption of this Plan, its
      operation nor any documents describing or referring to this Plan (or any
      part thereof) shall confer upon any employee any right to continue in the
      employ of BKSC or a Subsidiary to terminate the employment of any employee
      at any time with or without assigning a reason
  therefor.

            

    

    

    
      	
              13.02

            	
              Rules of
      Construction.  Headings are given to the articles and
      sections of this Plan solely as a convenience to facilitate
      reference.  The reference to any statute, regulation or other
      provision of law shall be construed to refer to any amendment to or
      successor of such provision of law.

            

    

    

    
      	
              13.03

            	
              Employee
      Status.  For purposes of determining the applicability of
      Code section 422 (relating to incentive stock options) or in the event
      that the terms of any Option provide that it may be exercised only during
      employment or within a specified period of time after termination of
      employment, the Committee may decide to what extent leaves of absence for
      governmental or military service, illness, temporary disability or other
      reasons shall not be deemed interruptions of continuous
      employment.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ARTICLE
XII

    

    AMENDMENT

    

    The Board
may amend or terminate this Plan from time to time; provided, however, that no
amendment may become effective until shareholder approval is obtained if (i) the
amendment increases the aggregate number of shares of BKSC common stock that may
be issued under the Plan or (ii) the amendment changes the class of individuals
eligible to become Participants.  No amendment shall, without a
Participant’s consent, adversely affect any rights of such Participant under any
Option outstanding at the time such amendment is made.

    

    ARTICLE
XIII

    

    DURATION OF
PLAN

    

    No Option
may be granted under this Plan after April 14, 2008.  Options granted
before that date shall remain valid in accordance with their terms.

    

    ARTICLE
XIV

    

    EFFECTIVE DATE OF
PLAN

    

    Options
may be granted under this Plan upon its adoption by the Board, provided that no
Option will be effective unless this Plan is approved by shareholders holding a
majority of BKSC’s outstanding voting stock, voting either in person or by proxy
at a duly held shareholder’s meeting within twelve months of such
adoption.

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