EXHIBIT 4.1
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 2002-C
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
and
CONSECO FINANCE CORP.
as Originator and Servicer
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Backup Servicer
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
of
CONSECO FINANCE HOME EQUITY LOAN TRUST 2002-C
Dated as of July 1, 2002
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ........................................................................... 1-1
SECTION 1.01 General ................................................................. 1-1
SECTION 1.02 Specific Terms .......................................................... 1-1
SECTION 1.03 Calculations ............................................................ 1-65
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF LOANS ............................................. 2-1
SECTION 2.01 Closing ................................................................. 2-1
SECTION 2.02 Conditions to the Closing ............................................... 2-1
SECTION 2.03 Conveyance of the Subsequent Loans ...................................... 2-3
SECTION 2.04 Acceptance by Trustee ................................................... 2-5
SECTION 2.05 REMIC Provisions ........................................................ 2-5
SECTION 2.06 Seller Option to Substitute for Prepaid Loans ........................... 2-13
SECTION 2.07 Conveyance of Uncertificated Subsidiary Interests and Uncertificated
Intermediate Interests .................................................. 2-14
ARTICLE III REPRESENTATIONS AND WARRANTIES ........................................................ 3-1
SECTION 3.01 Representations and Warranties Regarding the Seller ..................... 3-1
SECTION 3.02 Representations and Warranties Regarding Each Loan ...................... 3-2
SECTION 3.03 Additional Representations and Warranties ............................... 3-6
SECTION 3.04 Representations and Warranties Regarding the Loans in the Aggregate ..... 3-6
SECTION 3.05 Representations and Warranties Regarding the Loan Files ................. 3-10
SECTION 3.06 Repurchases of Loans for Breach of Representations and Warranties ....... 3-10
SECTION 3.07 No Repurchase Under Certain Circumstances ............................... 3-12
SECTION 3.08 Certain Representations and Warranties Regarding Perfection of
the Loans ............................................................... 3-13
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS ........................... 4-1
SECTION 4.01 Transfer of Loans ....................................................... 4-1
SECTION 4.02 Costs and Expenses ...................................................... 4-1
i
ARTICLE V SERVICING OF LOANS .................................................................... 5-1
SECTION 5.01 Responsibility for Loan Administration .................................. 5-1
SECTION 5.02 Standard of Care ........................................................ 5-1
SECTION 5.03 Records ................................................................. 5-1
SECTION 5.04 Inspection .............................................................. 5-1
SECTION 5.05 Certificate Account ..................................................... 5-2
SECTION 5.06 Enforcement ............................................................. 5-5
SECTION 5.07 Trustee to Cooperate .................................................... 5-6
SECTION 5.08 Costs and Expenses ...................................................... 5-7
SECTION 5.09 Maintenance of Insurance ................................................ 5-7
SECTION 5.10 Merger or Consolidation of Servicer ..................................... 5-7
SECTION 5.11 Advance Facility ........................................................ 5-8
SECTION 5.12 Backup Servicer ......................................................... 5-11
ARTICLE VI REPORTS AND TAX MATTERS ............................................................... 6-1
SECTION 6.01 Monthly Reports ......................................................... 6-1
SECTION 6.02 Officer's Certificate ................................................... 6-1
SECTION 6.03 Other Data .............................................................. 6-1
SECTION 6.04 Annual Report of Accountants ............................................ 6-1
SECTION 6.05 Statements to Certificateholders and the Class R Certificateholder ...... 6-1
SECTION 6.06 Payment of Taxes ........................................................ 6-3
ARTICLE VII SERVICE TRANSFER ...................................................................... 7-1
SECTION 7.01 Events of Termination ................................................... 7-1
SECTION 7.02 Transfer ................................................................ 7-2
SECTION 7.03 Trustee to Act; Appointment of Successor ................................ 7-2
SECTION 7.04 Notification to Certificateholders and Class R Certificateholder ........ 7-3
SECTION 7.05 Effect of Transfer ...................................................... 7-3
SECTION 7.06 Transfer of Certificate Account ......................................... 7-4
ARTICLE VIII PAYMENTS .............................................................................. 8-1
SECTION 8.01 Monthly Payments ........................................................ 8-1
SECTION 8.02 Advances ................................................................ 8-2
SECTION 8.03 [Reserved] .............................................................. 8-2
ii
SECTION 8.04 Permitted Withdrawals from the Certificate Account; Payments ............ 8-2
SECTION 8.05 Reassignment of Repurchased and Replaced Loans .......................... 8-10
SECTION 8.06 Class R Certificateholder's Purchase Option ............................. 8-10
SECTION 8.07 Intermediate REMIC and Subsidiary REMIC Distributions ................... 8-13
SECTION 8.08 Pre-Funding Account ..................................................... 8-19
SECTION 8.09 Yield Maintenance Reserve Fund .......................................... 8-20
SECTION 8.10 Basis Risk Reserve Fund ................................................. 8-21
SECTION 8.11 Capitalized Interest Account ............................................ 8-23
SECTION 8.12 Allocation of Realized Loss Amounts ..................................... 8-24
ARTICLE IX THE CERTIFICATES AND THE CLASS R CERTIFICATE .......................................... 9-1
SECTION 9.01 The Certificates and the Class R Certificate ............................ 9-1
SECTION 9.02 Registration of Transfer and Exchange of Certificates and the
Class R Certificate ..................................................... 9-2
SECTION 9.03 No Charge; Disposition of Void Certificates or Class R Certificate ...... 9-7
SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates or Class R
Certificate ............................................................. 9-7
SECTION 9.05 Persons Deemed Owners ................................................... 9-8
SECTION 9.06 Access to List of Certificateholders' and Class R Certificateholder's
Names and Addresses ..................................................... 9-8
SECTION 9.07 Authenticating Agents ................................................... 9-8
ARTICLE X INDEMNITIES ........................................................................... 10-1
SECTION 10.01 Real Estate ............................................................. 10-1
SECTION 10.02 Liabilities to Obligors ................................................. 10-1
SECTION 10.03 Tax Indemnification ..................................................... 10-1
SECTION 10.04 Servicer's Indemnities .................................................. 10-1
SECTION 10.05 Operation of Indemnities ................................................ 10-2
SECTION 10.06 REMIC Tax Matters ....................................................... 10-2
SECTION 10.07 Indemnification of Backup Servicer ...................................... 10-2
SECTION 10.08 Limitation of Liability ................................................. 10-2
ARTICLE XI THE TRUSTEE ........................................................................... 11-1
SECTION 11.01 Duties of Trustee ....................................................... 11-1
SECTION 11.02 Certain Matters Affecting the Trustee ................................... 11-2
iii
SECTION 11.03 Trustee Not Liable for Certificates, Class R Certificate or Loans ....... 11-3
SECTION 11.04 Trustee May Own Certificates ............................................ 11-3
SECTION 11.05 Rights of Certificateholders to Direct Trustee and to Waive
Events of Termination ................................................... 11-3
SECTION 11.06 The Servicer to Pay Trustee's Fees and Expenses ......................... 11-4
SECTION 11.07 Eligibility Requirements for Trustee .................................... 11-4
SECTION 11.08 Resignation or Removal of Trustee ....................................... 11-5
SECTION 11.09 Successor Trustee ....................................................... 11-5
SECTION 11.10 Merger or Consolidation of Trustee ...................................... 11-6
SECTION 11.11 Tax Returns ............................................................. 11-6
SECTION 11.12 Obligor Claims .......................................................... 11-6
SECTION 11.13 Appointment of Co-Trustee or Separate Trustee ........................... 11-7
SECTION 11.14 Xxxxxxx and U.S. Bancorp ................................................ 11-8
SECTION 11.15 Trustee Advances ........................................................ 11-8
ARTICLE XII MISCELLANEOUS ......................................................................... 12-1
SECTION 12.01 Servicer Not to Resign; Delegation of Servicing Duties .................. 12-1
SECTION 12.02 Conseco Finance Corp. and Seller Not to Engage in Certain
Transactions with Respect to the Trust .................................. 12-1
SECTION 12.03 Maintenance of Office or Agency ......................................... 12-1
SECTION 12.04 Termination ............................................................. 12-1
SECTION 12.05 Acts of Certificateholders and Class R Certificateholder ................ 12-5
SECTION 12.06 Assignment or Delegation by Company ..................................... 12-6
SECTION 12.07 Amendment ............................................................... 12-6
SECTION 12.08 Notices ................................................................. 12-8
SECTION 12.09 Merger and Integration .................................................. 12-9
SECTION 12.10 Headings ................................................................ 12-9
SECTION 12.11 Governing Law ........................................................... 12-9
iv
Exhibit A -- Form of Class [AF][AV] - [1][2][3][4][IO] Certificate
Exhibit B -- Form of Class [MF][MV] - [1][2] Certificate
Exhibit C -- Form of Class [BF][BV] - [1][2] Certificate
Exhibit D -- Form of Assignment
Exhibit E -- Form of Certificate of Officer
Exhibit F -- Form of Opinion of Counsel for the Seller
Exhibit G -- Form of Trustee's Acknowledgment
Exhibit H -- Form of Certificate of Servicing Officer
Exhibit I -- Form of Class B-3I Certificate
Exhibit J-1 -- Form of Certificate Regarding Repurchased Loans
Exhibit J-2 -- Form of Certificate Regarding Eligible Substitute Loans
Exhibit J-3 -- Form of Certificate Regarding Substitution for Prepaid Loans
Exhibit J-4 -- Servicer Request for Release of Loan File
Exhibit K -- Form of Representation Letter
Exhibit L -- List of Initial and Additional Group I and Group II Loans
Exhibit M -- Form of Monthly Report
Exhibit N -- Form of Addition Notice
Exhibit O -- Form of Subsequent Transfer Instrument
Exhibit P -- Form of Officer's Certificate (Subsequent Transfer)
Exhibit Q -- Form of Class R Certificate
Exhibit R -- Form of Class P Certificate
v
AGREEMENT, dated as of July 1, 2002, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware as
originator of the home equity loans described herein (the "Originator"), and as
Servicer (the "Servicer"), Xxxxx Fargo Bank Minnesota, National Association, a
national banking association organized and existing under the laws of the United
States (the "Backup Servicer") and U.S. Bank National Association (formerly
known as U.S. Bank Trust National Association), a national banking association
organized and existing under the laws of the United States, not in its
individual capacity but solely as Trustee (the "Trustee") of Conseco Finance
Home Equity Loan Trust 2002-C (the "Trust").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
purchases, originates and services home equity loans, which loans provide for
installment payments by or on behalf of the borrowers and grant mortgages, deeds
of trust or security deeds on certain real estate securing such loans;
WHEREAS, the Seller, in the ordinary course of its business, acquires
pools of home equity loans and other receivables from Conseco Finance Corp. and
arranges the securitization of those receivables;
WHEREAS, the Seller intends to sell the Certificates (as defined
herein), to be issued hereunder in sixteen classes (each, a "Class"), which,
together with the Class R Certificate (as defined herein), in the aggregate will
evidence the entire beneficial ownership interest in the Trust Fund (as defined
herein), consisting primarily of the Loans (as defined herein);
WHEREAS, the Seller, the Originator, the Servicer, the Backup Servicer
and the Trustee wish to set forth the terms and conditions on which the Trustee,
on behalf of the Certificateholders (as defined herein) and Class R
Certificateholder (as defined herein) will acquire the Loans and the Servicer
will service the Loans;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as provided herein:
ARTICLE I
DEFINITIONS
SECTION 1.01 General. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article 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 this Agreement.
SECTION 1.02 Specific Terms.
"Accrual Period" means, with respect to any Payment Date, the period
from and including the prior Payment Date (or, with respect to the first Payment
Date, from and including the Closing Date) to but excluding such Payment Date.
"Addition Notice" means, with respect to the transfer of Subsequent
Loans to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit N, which shall be given not later than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Group I and Group II Loans, as applicable, to be sold
to the Trust and the aggregate Cut-off Date Principal Balances of such
Subsequent Loans.
"Additional Loan" means a Loan identified as such on the List of Loans
attached hereto, the aggregate Cut-off Date Principal Balance of which is
$51,866,232.24 in Group I Loans and $78,231,361.07 in Group II Loans.
"Adjusted Group I Net WAC Cap Rate" means, with respect to any Payment
Date (i) occurring on or prior to the Payment Date occurring in October 2005,
the Group I Net WAC Cap Rate adjusted for the amount of interest payable on the
Class AF-IO Certificates and (ii) thereafter, the Group I Net WAC Cap Rate. For
federal income tax purposes, however, the equivalent of the foregoing, expressed
as the weighted average of the Pass-Through Rates on the Uncertificated
Intermediate Group I Interests.
"Adjusted Group II Net WAC Cap Rate" means, with respect to any Payment
Date (i) occurring on or prior to the Payment Date occurring in October 2005,
the Group II Net WAC Cap Rate adjusted for the amount of interest payable on the
Class AV-IO Certificates and (ii) thereafter, the Group II Net WAC Cap Rate. For
federal income tax purposes, however, the equivalent of the foregoing, expressed
as the weighted average of the Pass-Through Rates the Uncertificated
Intermediate Group II Interests.
"Adjusted Net WAC Cap Rate" means, with respect to a Payment Date, the
weighted average of the Adjusted Group I Net WAC Cap Rate and the Adjusted Group
II Net WAC Cap Rate, based on the Intermediate Interest Principal Balance of the
Uncertificated Intermediate Group I Interests and Uncertificated Intermediate
Group II Interests.
"Advance" means, with respect to any Payment Date, the amounts, if any,
deposited by the Servicer or the Trustee, as applicable, in the Certificate
Account for such Payment Date pursuant to Section 8.02.
1-1
"Advance Financing Person" has the meaning assigned in Section 5.11(a).
"Advance Payment" means any payment by an Obligor in advance of the Due
Period in which it would be due under such Loan and which payment is not a
Principal Prepayment.
"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.
"Aggregate Certificate Principal Balance" means the sum of the
Aggregate Group I Certificate Principal Balance and the Aggregate Group II
Certificate Principal Balance.
"Aggregate Group I Certificate Principal Balance" means the sum of the
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class MF-1, Class MF-2, Class
BF-1, and Class BF-2 Principal Balances plus the Class P(F) Principal Balance.
"Aggregate Group II Certificate Principal Balance" means the sum of the
Class AV-1, Class MV-1, Class MV-2, Class BV-1, and Class BV-2 Principal
Balances plus the Class P(V) Principal Balance.
"Agreement" means this Pooling and Servicing Agreement, as it may be
amended from time to time.
"Amount Available" means, for any Payment Date, the sum of the Group I
Amount Available and the Group II Amount Available.
"Amount Held for Future Distribution" means, for any Payment Date, the
total of the amounts held in the Certificate Account in respect of the Group I
or Group II Loans, as applicable, on the last day of the preceding Due Period on
account of Advance Payments in respect of such Due Period.
"Applicants" has the meaning assigned in Section 9.06.
"Appointment Period" has the meaning assigned in Section 5.12(a).
"Authenticating Agent" means any authenticating agent appointed
pursuant to Section 9.07.
"Average Sixty-Day Delinquency Ratio Test" means, to be considered
"satisfied" for any Payment Date, that the arithmetic average of the Sixty-Day
Delinquency Ratio for such Payment Date and for the two immediately preceding
Payment Dates is less than or equal to
(a) with respect to the Group I Loans, 32.00% of the Senior
Enhancement Percentage for the Group I Loans, and
1-2
(b) with respect to the Group II Loans, 35.00% of the Senior
Enhancement Percentage for the Group II Loans.
"Backup Servicer" means Xxxxx Fargo Bank Minnesota, National
Association, a national banking association organized and existing under the
laws of the United States, located at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, or an affiliate which primarily engages in servicing practices
on its behalf, or any successor thereto.
"Backup Servicing Fee" means, for any Payment Date and (a) the Group I
Loans, one-twelfth of the product of 0.03% and the Group I Pool Scheduled
Principal Balance as of the preceding Payment Date (or, in the case of the first
Payment Date, as of the Closing Date) and (b) the Group II Loans, one-twelfth of
the product of 0.03% and the Group II Pool Scheduled Principal Balance as of the
preceding Payment Date (or, in the case of the first Payment Date, as of the
Closing Date).
"Balloon Loan" means a Loan that provides for the payment of the
unamortized principal balance of such Loan in a single payment at the maturity
of such Loan that is greater than the preceding monthly payments.
"Basis Risk Carryover Shortfall" means the Class AF-1 Basis Risk
Carryover Shortfall, the Class AF-2 Basis Risk Carryover Shortfall, the Class
AF-3 Basis Risk Carryover Shortfall, the Class AF-4 Basis Risk Carryover
Shortfall, the Class MF-1 Basis Risk Carryover Shortfall, the MF-2 Basis Risk
Carryover Shortfall, the Class BF-1 Basis Risk Carryover Shortfall, the Class
BF-2 Basis Risk Carryover Shortfall, the Class AV-1 Basis Risk Carryover
Shortfall, the Class MV-1 Basis Risk Carryover Shortfall, the Class MV-2 Basis
Risk Carryover Shortfall, the Class BV-1 Basis Risk Carryover Shortfall, or the
Class BV-2 Basis Risk Carryover Shortfall, as applicable.
"Basis Risk Reserve Fund" means a separate trust account created and
maintained pursuant to Section 8.10 in the name of the Trust in an Eligible
Institution.
"Book-Entry Certificate" means any Certificate registered in the name
of the Depository or its nominee, ownership of which is reflected on the books
of the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than
(a) a Saturday or a Sunday, or
(b) another day on which banking institutions in the city in which
the Person taking action hereunder are authorized or obligated
by law, executive order, or governmental decree to be closed.
"Calculation Agent" means the Person who establishes LIBOR with respect
to each Interest Reset Period. The Calculation Agent shall be the Trustee unless
the Trustee is unable or unwilling so to act, in which case the Calculation
Agent shall be a financial institution appointed by the Seller.
1-3
"Capitalized Interest Account" means a separate trust account created
and maintained pursuant to Section 8.11 in the name of the Trust in an Eligible
Institution.
"Certificate" means a Group I Certificate, Group II Certificate, Class
B-3I Certificate or Class P Certificate, but does not include the Class R
Certificate.
"Certificate Account" means a separate trust account created and
maintained pursuant to Section 5.05 in the name of the Trust in an Eligible
Institution.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate or, if Definitive Certificates have been issued,
Certificateholders.
"Certificate Register" means the register maintained pursuant to
Section 9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.
"Certificateholder" or "Holder" means the person in whose name a
Certificate or Class R Certificate is registered on the Certificate Register,
except that, solely for the purposes of giving any consent, waiver, request or
demand pursuant to this Agreement, any Certificate or Class R Certificate
registered in the name of the Originator or the Seller or any of their
Affiliates shall be deemed not to be outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite Percentage Interest necessary to effect any such consent, request,
waiver or demand has been obtained; provided, however, that, solely for the
purpose of determining whether the Trustee is entitled to rely upon any such
consent, waiver, request or demand, only Certificates or a Class R Certificate
which the Trustee knows to be so owned shall be so disregarded.
"Class AF," "Class AF-IO," "Class MF," "Class BF," "Class AV," "Class
AV-IO," "Class MV," "Class BV," "Class B-3I," "Class P" or "Class R" means
pertaining to Class AF Certificates, Class AF-IO Certificates, Class MF
Certificates, Class BF Certificates, Class AV Certificates, Class AV-IO
Certificates, Class MV Certificates, Class BV Certificates, Class B-3I
Certificates, the Class P Certificate and/or the Class R Certificate, as the
case may be.
"Class AF Certificates" means the Class AF-1, Class AF-2, Class AF-3,
and Class AF-4 Certificates, collectively.
"Class AF Current Interest Amount" means, for any Payment Date, the sum
of interest accrued during the related Accrual Period at (i) the Class AF-1
Interest Rate on the Class AF-1 Principal Balance, (ii) the Class AF-2 Interest
Rate on the Class AF-2 Principal Balance, (iii) the Class AF-3 Interest Rate on
the Class AF-3 Principal Balance, and (iv) the Class AF-4 Interest Rate on the
Class AF-4 Principal Balance.
"Class AF Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AF Principal Balance and
1-4
(b) (i) if the Payment Date is before the Stepdown Date for the
Group I Certificates or a Group I Trigger Event exists, the
Group I Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group I Certificates and no Group I Trigger Event exists, the
excess of the Class AF Principal Balance over the lesser of
(A) 52.00% of the Group I Pool Scheduled Principal
Balance with respect to such Payment Date (after
giving effect to unscheduled principal collections
received during the related Due Period), and
(B) the Group I Pool Scheduled Principal Balance with
respect to such Payment Date (after giving effect to
unscheduled principal collections received during the
related Due Period), less the Group I OC Floor.
"Class AF Interest Carry Forward Amount" means, with respect to any
Payment Date and each Class of Class AF Certificates, the excess, if any, of the
Class AF Current Interest Amount in respect of such Class for such Payment Date
over the amount actually paid on such Class in respect of the Class AF Current
Interest Amount on such Payment Date.
"Class AF Principal Balance" means, for any Payment Date, the sum of
the Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Principal Balances.
"Class AF-1 Basis Risk Carryover Shortfall" means, for any Payment
Date, the excess, if any, of
(a) the amount of interest that the Class AF-1 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the Class AF-1 Interest Rate
not been calculated based on the Adjusted Group I Net WAC Cap
Rate, over
(b) the amount of interest that the Class AF-1 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class AF-1 Certificate" means any one of the Class AF-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-1 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AF-1 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class AF-1 Interest Rate" means a floating rate per annum equal to the
least of (a) LIBOR plus the Class AF-1 Margin, (b) the Adjusted Group I Net WAC
Cap Rate, and (c) 15.00% per annum.
1-5
"Class AF-1 Margin" means 0.20%.
"Class AF-1 Principal Balance" means, for any Payment Date, the
Original Class AF-1 Principal Balance less all amounts distributed to Holders of
Class AF-1 Certificates in respect of principal on prior Payment Dates.
"Class AF-2 Basis Risk Carryover Shortfall" means, for any Payment
Date, the excess, if any, of
(a) the amount of interest that the Class AF-2 Certificates would
have been entitled to receive on such Payment Date had the
Class AF-2 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class AF-2 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class AF-2 Certificate" means any one of the Class AF-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-2 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AF-2 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class AF-2 Interest Rate" means a rate equal to the lesser of (a)
3.827% per annum and (b) the Adjusted Group I Net WAC Cap Rate.
"Class AF-2 Principal Balance" means, for any Payment Date, the
Original Class AF-2 Principal Balance less all amounts distributed to Holders of
Class AF-2 Certificates in respect of principal on prior Payment Dates.
"Class AF-3 Basis Risk Carryover Shortfall" means, for any Payment
Date, the excess, if any, of
(a) the amount of interest that the Class AF-3 Certificates would
have been entitled to receive on such Payment Date had the
Class AF-3 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class AF-3 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class AF-3 Certificate" means any one of the Class AF-3 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
1-6
"Class AF-3 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AF-3 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class AF-3 Interest Rate" means a rate equal to the lesser of (a)
4.580% per annum, and (b) the Adjusted Group I Net WAC Cap Rate.
"Class AF-3 Principal Balance" means, for any Payment Date, the
Original Class AF-3 Principal Balance less all amounts distributed to Holders of
Class AF-3 Certificates in respect of principal on prior Payment Dates.
"Class AF-4 Basis Risk Carryover Shortfall" means, for any Payment
Date, the excess, if any, of
(a) the amount of interest that the Class AF-4 Certificates would
have been entitled to receive on such Payment Date had the
Class AF-4 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class AF-4 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class AF-4 Certificate" means any one of the Class AF-4 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-4 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AF-4 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class AF-4 Interest Rate" means a rate equal to the lesser of (a)
5.972% per annum and (b) the Adjusted Group I Net WAC Cap Rate.
"Class AF-4 Principal Balance" means, for any Payment Date, the
Original Class AF-4 Principal Balance less all amounts distributed to Holders of
Class AF-4 Certificates in respect of principal on prior Payment Dates.
"Class AF-IO Certificates" means the Class AF-IO Certificates executed
and delivered by the Trustee and authenticated by the Certificate Registrar
substantially in the form set forth in Exhibit A and evidencing an interest
designated as a "regular interest" in the Master REMIC for purposes of the REMIC
Provisions.
"Class AF-IO Current Interest Amount" means, with respect to any
Payment Date, an amount equal to interest accrued during the related Accrual
Period at the Class AF-IO Interest Rate on the Class AF-IO Notional Amount.
1-7
"Class AF-IO Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AF-IO Certificateholder pursuant to
Sections 8.04 and 8.11 on such Payment Date.
"Class AF-IO Interest Rate" means a rate per annum equal to the lesser
of (a) 7.50% per annum and (b) the Group I Net WAC Cap Rate. For federal income
tax purposes, however, the Class AF-IO Certificates will not have a Class AF-IO
Pass-Through Rate, and the Class AF-IO Current Interest Amount for the Class
AF-IO Certificates and any Payment Date will be deemed to be 100% of the amount
distributed on the Class I-AF-IO Interest for such Payment Date.
"Class AF-IO Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class AF-IO Current Interest Amount for
such Payment Date over the amount actually paid on the Class AF-IO Certificates
in respect of the Class AF-IO Current Interest Amount on such Payment Date.
"Class AF-IO Notional Amount" means, with respect to each Payment Date,
the lesser of (a) the Group I Pool Scheduled Principal Balance, and (b) the
following amounts for the following time periods:
Payment Date
------------
From Through Notional Amount
---- ------- ---------------
Closing Date October 2002 $123,750,000
November 2002 January 2003 $103,125,000
February 2003 April 2003 $ 86,625,000
May 2003 July 2003 $ 72,875,000
August 2003 October 2003 $ 60,500,000
November 2003 January 2004 $ 50,875,000
February 2004 April 2004 $ 42,625,000
May 2004 July 2004 $ 35,750,000
August 2004 October 2004 $ 30,250,000
November 2004 January 2005 $ 24,750,000
February 2005 April 2005 $ 22,000,000
May 2005 July 2005 $ 17,875,000
August 2005 October 2005 $ 15,125,000
November 2005 any Payment Date thereafter $ 0
"Class AV Certificates" means the Class AV-1 Certificates.
"Class AV Current Interest Amount" means, for any Payment Date, an
amount equal to interest accrued during the related Accrual Period at the Class
AV-1 Interest Rate on the Class AV-1 Principal Balance.
"Class AV Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AV Principal Balance and
1-8
(b) (i) if the Payment Date is before the Stepdown Date for the
Group II Certificates or a Group II Trigger Event exists, the
Group II Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group II Certificates and no Group II Trigger Event exists,
the excess of the Class AV Principal Balance over
(A) 54.00% of the Group II Pool Scheduled Principal
Balance with respect to such Payment Date (after
giving effect to unscheduled principal collections
received during the related Due Period), and
(B) the Group II Pool Scheduled Principal Balance with
respect to such Payment Date (after giving effect to
unscheduled principal collections received during the
related Due Period), less the Group II OC Floor.
"Class AV Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class AV Current Interest Amount for
such Payment Date over the amount actually paid on the Class AV Certificates in
respect of the Class AV Current Interest Amount on such Payment Date.
"Class AV Principal Balance" means, for any Payment Date, the Class
AV-1 Principal Balance.
"Class AV-1 Basis Risk Carryover Shortfall" means, for any Payment
Date, the excess, if any, of
(a) the amount of interest that the Class AV-1 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the Class AV-1 Interest Rate
not been calculated based on the Adjusted Group I Net WAC Cap
Rate, over
(b) the amount of interest that the Class AV-1 Certificates
received on such Payment Date based on the Adjusted Group II
Net WAC Cap Rate.
"Class AV-1 Certificate" means any one of the Class AV-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AV-1 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AV-1 Certificateholders pursuant to
Sections 8.04, 8.09, 8.10 and 8.11 on such Payment Date.
"Class AV-1 Interest Rate" means a floating rate per annum equal to the
least of (a) LIBOR plus the Class AV-1 Margin, (b) the Adjusted Group II Net WAC
Cap Rate, and (c) 15.00% per annum.
1-9
"Class AV-1 Margin" means 0.45%.
"Class AV-1 Principal Balance" means, for any Payment Date, the
Original Class AV-1 Principal Balance less all amounts distributed to Holders of
Class AV-1 Certificates in respect of principal on prior Payment Dates.
"Class AV-IO Certificates" means the Class AV-IO Certificates executed
and delivered by the Trustee and authenticated by the Certificate Registrar
substantially in the form set forth in Exhibit A and evidencing an interest
designated as a "regular interest" in the Master REMIC for purposes of the REMIC
Provisions.
"Class AV-IO Current Interest Amount" means, with respect to any
Payment Date, an amount equal to interest accrued during the related Accrual
Period at the Class AV-IO Interest Rate on the Class AV-IO Notional Amount.
"Class AV-IO Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class AV-IO Certificateholder pursuant to
Sections 8.04 and 8.11 on such Payment Date.
"Class AV-IO Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class AV-IO Current Interest Amount for
such Payment Date over the amount actually paid on the Class AV-IO Certificates
in respect of the Class AV-IO Current Interest Amount on such Payment Date.
"Class AV-IO Interest Rate" means a rate per annum equal to the lesser
of (a) 7.50% per annum and (b) the Group II Net WAC Cap Rate. For federal income
tax purposes, however, the Class AV-IO Certificates will not have a Class AV-IO
Pass-Through Rate, and the Class AV-IO Current Interest Amount for the Class
AV-IO Certificates and any Payment Date will be deemed to be 100% of the amount
distributed on the Class I-AV-IO Interest for such Payment Date.
"Class AV-IO Notional Amount" means, with respect to each Payment Date,
the lesser of (a) the Group II Pool Scheduled Principal Balance, and (b) the
following amounts for the following time periods:
Payment Dates
-------------
From Through Notional Amount
---- ------- ---------------
Closing Date October 2002 $89,600,000
November 2002 January 2003 $76,800,000
February 2003 April 2003 $64,000,000
May 2003 July 2003 $52,800,000
August 2003 October 2003 $44,800,000
November 2003 January 2004 $38,400,000
February 2004 April 2004 $32,000,000
May 2004 July 2004 $27,200,000
August 2004 October 2004 $22,400,000
November 2004 January 2005 $19,200,000
February 2005 April 2005 $16,000,000
May 2005 July 2005 $12,800,000
August 2005 October 2005 $11,200,000
November 2005 any Payment Date thereafter $ 0
1-10
"Class B-3I Certificate" means any one of the Class B-3I Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit I hereto and evidencing
an interest designated as a "regular interest" in the Master REMIC for purposes
of the REMIC Provisions.
"Class B-3I Distribution Amount" means, as to any Payment Date, an
amount equal to the lesser of (i) the Class B-3I Formula Distribution Amount for
such Payment Date and (ii) the Remaining Excess Cashflow for such Payment Date.
"Class B-3I Formula Distribution Amount" means, as to any Payment Date,
an amount equal to the sum of (A) the product of (i) the Class B-3I Interest
Rate for such Payment Date and (ii) the Class B-3I Notional Amount and (B) the
amount, if any, by which the Class B-3I Formula Distribution Amount on the
preceding Payment Date exceeded the Class B-3I Distribution Amount on such
preceding Payment Date.
"Class B-3I Interest Rate" means the Adjusted Net WAC Cap Rate over the
product of (A) two and (B) the weighted average Pass-Through Rate of the Class
I-F Accrual Interest, the Class I-V Accrual Interest and the Intermediate REMIC
Accretion Directed Interests, provided that, for this purpose the Pass-Through
Rate for the Class I-F Accrual Interest and the Class I-V Accrual Interest shall
be subject to a cap of zero and the Pass-Through Rate for each Intermediate
REMIC Accretion Directed Interest shall not exceed the Interest Rate on its
Corresponding Certificate Class.
"Class B-3I Notional Amount" means $475,000,000 for the first Payment
Date and, for any other Payment Date, the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount as of the immediately preceding Payment Date.
"Class BF Certificates" means the Class BF-1 and Class BF-2
Certificates, collectively.
"Class BF-1 Allocated Realized Loss Amount" means, for any Payment
Date, that portion, if any, of the Realized Loss Amount for such Payment Date
allocated to the Class BF-1 Certificates in accordance with Section 8.12(a).
"Class BF-1 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class BF-1 Interest Rate on the Unpaid Class BF-1 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(c)(viii)).
"Class BF-1 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class BF-1 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the
1-11
Class BF-1 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class BF-1 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class BF-1 Certificate" means any one of the Class BF-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class BF-1 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class BF-1 Interest Rate on the Class BF-1 Principal Balance.
"Class BF-1 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class BF-1 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class BF-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class BF-1 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date for the
Group I Certificates or a Group I Trigger Event exists, the
Group I Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AF,
Class MF-1 and Class MF-2 Formula Principal Distribution
Amounts; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group I Certificates and no Group I Trigger Event exists, the
excess of
(A) the aggregate Class AF, Class MF-1, Class MF-2 and
Class BF-1 Principal Balances, less distributions on
such Payment Date in respect of the Class AF, Class
MF-1 and Class MF-2 Formula Principal Distribution
Amounts, over
(B) the lesser of
(x) 88.50% of the Group I Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group I Pool Scheduled Principal Balance
with respect to such Payment Date (after
giving effect to unscheduled
1-12
principal collections received during the
related Due Period), less the Group I OC
Floor.
"Class BF-1 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class BF-1 Current Interest Amount for
such Payment Date over the amount actually paid on the Class BF-1 Certificates
in respect of the Class BF-1 Current Interest Amount on such Payment Date.
"Class BF-1 Interest Rate" means a floating rate per annum equal to the
lesser of (a) 8.000% per annum and (b) the Adjusted Group I Net WAC Cap Rate.
"Class BF-1 Principal Balance" means, as to any Payment Date, the
Original Class BF-1 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class BF-1 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class BF-1 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class BF-2 Allocated Realized Loss Amount" means, for any Payment
Date, that portion, if any, of the Realized Loss Amount for such Payment Date
allocated to the Class BF-2 Certificates in accordance with Section 8.12(a).
"Class BF-2 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class BF-2 Interest Rate on the Unpaid Class BF-2 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(c)(x)).
"Class BF-2 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of
(a) the amount of interest that the Class BF-2 Certificates would
have been entitled to receive on such Payment Date had the
Class BF-2 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class BF-2 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class BF-2 Certificate" means any one of the Class BF-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class BF-2 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class BF-2 Interest Rate on the Class BF-2 Principal Balance.
1-13
"Class BF-2 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class BF-2 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class BF-2 Extra Principal Distribution Amount" means, for any Payment
Date, the amount distributed to the Class BF-2 Certificates on such Payment Date
pursuant to Section 8.04(c)(xiii).
"Class BF-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class BF-2 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date for the
Group I Certificates or a Group I Trigger Event exists, the
Group I Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AF,
Class MF-1, Class MF-2 and Class BF-1 Formula Principal
Distribution Amounts; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group I Certificates and no Group I Trigger Event exists, the
excess of
(A) the aggregate Class AF, Class MF-1, Class MF-2, Class
BF-1 and Class BF-2 Principal Balances, less
distributions on such Payment Date in respect of the
Class AF, Class MF-1, Class MF-2 and Class BF-1
Formula Principal Distribution Amounts, over
(B) the lesser of
(x) 94.00% of the Group I Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group I Pool Scheduled Principal Balance
with respect to such Payment Date (after
giving effect to unscheduled principal
collections received during the related Due
Period), less the Group I OC Floor.
"Class BF-2 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class BF-2 Current Interest Amount for
such Payment Date over the amount actually paid on the Class BF-2 Certificates
in respect of the Class BF-2 Current Interest Amount on such Payment Date.
"Class BF-2 Interest Rate" means a rate equal to the lesser of (a)
8.00% per annum and (b) the Adjusted Group I Net WAC Cap Rate.
1-14
"Class BF-2 Principal Balance" means, as to any Payment Date, the
Original Class BF-2 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class BF-2 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class BF-2 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class BV Certificates" means the Class BV-1 and Class BV-2
Certificates, collectively.
"Class BV-1 Allocated Realized Loss Amount" means, for any Payment
Date, that portion, if any, of the Realized Loss Amount for such Payment Date
allocated to the Class BV-1 Certificates in accordance with Section 8.12(b).
"Class BV-1 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class BV-1 Interest Rate on the Unpaid Class BV-1 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(e)(viii)).
"Class BV-1 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class BV-1 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the Class BV-1 Interest Rate
not been calculated based on the Adjusted Group II Net WAC Cap
Rate, over
(b) the amount of interest that the Class BV-1 Certificates
received on such Payment Date based on the Adjusted Group II
Net WAC Cap Rate.
"Class BV-1 Certificate" means any one of the Class BV-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class BV-1 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class BV-1 Interest Rate on the Class BV-1 Principal Balance.
"Class BV-1 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class BV-1 Certificateholders pursuant to
Sections 8.04, 8.09, 8.10 and 8.11 on such Payment Date.
"Class BV-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class BV-1 Principal Balance and
1-15
(b) (i) if the Payment Date is before the Stepdown Date for the
Group II Certificates or a Group II Trigger Event exists, the
Group II Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AV,
Class MV-1 and Class MV-2 Formula Principal Distribution
Amounts; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group II Certificates and no Group II Trigger Event exists,
the excess of
(A) the aggregate Class AV, Class MV-1, Class MV-2 and
Class BV-1 Principal Balances, less distributions on
such Payment Date in respect of the Class AV, Class
MV-1 and Class MV-2 Formula Principal Distribution
Amounts, over
(B) the lesser of
(x) 89.50% of the Group II Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group II Pool Scheduled Principal
Balance with respect to such Payment Date
(after giving effect to unscheduled
principal collections received during the
related Due Period), less the Group II OC
Floor.
"Class BV-1 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class BV-1 Current Interest Amount for
such Payment Date over the amount actually paid on the Class BV-1 Certificates
in respect of the Class BV-1 Current Interest on such Payment Date.
"Class BV-1 Interest Rate" means a floating rate per annum equal to the
least of (a) LIBOR plus the Class BV-1 Margin, (b) the Adjusted Group II Net WAC
Cap Rate, and (c) 15.00% per annum.
"Class BV-1 Margin" means 3.00%.
"Class BV-1 Principal Balance" means, as to any Payment Date, the
Original Class BV-1 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class BV-1 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class BV-1 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class BV-2 Allocated Realized Loss Amount" means, for any Payment
Date, that portion, if any, of the Realized Loss Amount for such Payment Date
allocated to the Class BV-2 Certificates in accordance with Section 8.12(b).
1-16
"Class BV-2 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class BV-2 Interest Rate on the Unpaid Class BV-2 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(e)(x)).
"Class BV-2 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of
(a) the amount of interest that the Class BV-2 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the Class BV-2 Interest Rate
not been calculated based on the Adjusted Group II Net WAC Cap
Rate, over
(b) the amount of interest that the Class BV-2 Certificates
received on such Payment Date based on the Adjusted Group II
Net WAC Cap Rate.
"Class BV-2 Certificate" means any one of the Class BV-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class BV-2 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class BV-2 Interest Rate on the Class BV-2 Principal Balance.
"Class BV-2 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class BV-2 Certificateholders pursuant to
Sections 8.04, 8.09, 8.10 and 8.11 on such Payment Date.
"Class BV-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class BV-2 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date for the
Group II Certificates or a Group II Trigger Event exists, the
Group II Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AV,
Class MV-1, Class MV-2 and Class BV-1 Formula Principal
Distribution Amounts; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group II Certificates and no Group II Trigger Event exists,
the excess of
(A) the aggregate Class AV, Class MV-1, Class MV-2, Class
BV-1 and Class BV-2 Principal Balances, less
distributions on such Payment Date in respect of the
Class AV, Class MV-1, Class MV-2 and Class BV-1
Formula Principal Distribution Amounts, over
1-17
(B) the lesser of
(x) 95.50% of the Group II Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group II Pool Scheduled Principal
Balance with respect to such Payment Date
(after giving effect to unscheduled
principal collections received during the
related Due Period), less the Group II OC
Floor.
"Class BV-2 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class BV-2 Current Interest Amount for
such Payment Date over the amount actually paid on the Class BV-2 Certificates
in respect of the Class BV-2 Current Interest Amount on such Payment Date.
"Class BV-2 Interest Rate" means a rate equal to the least of (a) LIBOR
plus the Class BV-2 Margin, (b) the Adjusted Group II Net WAC Cap Rate, and (c)
15.00% per annum.
"Class BV-2 Margin" means 3.00%.
"Class BV-2 Principal Balance" means, as to any Payment Date, the
Original Class BV-2 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class BV-2 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class BV-2 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class I-AF-IO" means any one or more individual components of the
Class I-AF-IO Interest, as the case may be.
"Class I-AF-IO Interest" means the Class I-AF-IO(1), Class I-AF-IO(2),
Class I-AF-IO(3), Class I-AF-IO(4), Class I-AF-IO(5), Class I-AF-IO(6), Class
I-AF-IO(7), Class I-AF-IO(8), Class I-AF-IO(9), Class I-AF-IO(10), Class
I-AF-IO(11), Class I-AF-IO(12) and Class I-AF-IO(13) Interests, collectively.
"Class I-AF-IO Interest Rate" means the excess, if any, of (a) the
weighted average of the Pass-Through Rates of the Class S-1F and Class S-2F
Interests over (b) the excess, if any, of (i) the weighted average of the
Pass-Through Rates of the Class S-1F and Class S-2F Interests over (ii) 7.50%
per annum.
"Class I-AV-IO" means any one or more individual components of the
Class I-AV-IO Interest, as the case may be.
"Class I-AV-IO Interest" means the Class I-AV-IO(1), Class I-AV-IO(2),
Class I-AV-IO(3), Class I-AV-IO(4), Class I-AV-IO(5), Class I-AV-IO(6), Class
I-AV-IO(7),
1-18
Class I-AV-IO(8), Class I-AV-IO(9), Class I-AV-IO(10), Class I-AV-IO(11), Class
I-AV-IO(12) and Class I-AV-IO(13) Interests, collectively.
"Class I-AV-IO Interest Rate" means the excess, if any, of (a) the
weighted average of the Pass-Through Rates of the Class S-1V and Class S-2V
Interests over (b) the excess, if any, of (i) the weighted average of the
Pass-Through Rates of the Class S-1V and Class S-2V Interests over (ii) 7.50%
per annum.
"Class MF Certificates" means the Class MF-1 and Class MF-2
Certificates, collectively.
"Class MF-1 Allocated Realized Loss Amount" means, with respect to any
Payment Date, that portion, if any, of the Realized Loss Amount for such Payment
Date allocated to the Class MF-1 Certificates in accordance with Section
8.12(a).
"Class MF-1 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class MF-1 Interest Rate on the Unpaid Class MF-1 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(c)(iv)).
"Class MF-1 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of
(a) the amount of interest that the Class MF-1 Certificates would
have been entitled to receive on such Payment Date had the
Class MF-1 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class MF-1 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class MF-1 Certificate" means any one of the Class MF-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class MF-1 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class MF-1 Interest Rate on the Class MF-1 Principal Balance.
"Class MF-1 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class MF-1 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class MF-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MF-1 Principal Balance and
1-19
(b) (i) if the Payment Date is before the Stepdown Date for the
Group I Certificates or a Group I Trigger Event exists, the
Group I Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AF
Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group I Certificates and no Group I Trigger Event exists, the
excess of
(A) the aggregate Class AF and Class MF-1 Principal
Balances, less distributions on such Payment Date in
respect of the Class AF Formula Principal
Distribution Amounts, over
(B) the lesser of
(x) 66.50% of the Group I Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group I Pool Scheduled Principal Balance
with respect to such Payment Date (after
giving effect to unscheduled principal
collections received during the related Due
Period), less the Group I OC Floor.
"Class MF-1 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class MF-1 Current Interest Amount for
such Payment Date over the amount actually paid on the Class MF-1 Certificates
in respect of the Class MF-1 Current Interest Amount on such Payment Date.
"Class MF-1 Interest Rate" means a floating rate per annum equal to the
lesser of (a) 6.158% per annum and (b) the Adjusted Group I Net WAC Cap Rate.
"Class MF-1 Principal Balance" means, as to any Payment Date, the
Original Class MF-1 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class MF-1 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class MF-1 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class MF-2 Allocated Realized Loss Amount" means, with respect to any
Payment Date, that portion, if any, of the Realized Loss Amount for such Payment
Date allocated to the Class MF-2 Certificates in accordance with Section
8.12(a).
"Class MF-2 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class MF-2 Interest Rate on the Unpaid Class MF-2 Realized Loss Amount
for the immediately preceding Payment Date
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(after giving effect to any payment in reduction thereof on such Payment Date
pursuant to Section 8.04(c)(vi)).
"Class MF-2 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class MF-2 Certificates would
have been entitled to receive on such Payment Date had the
Class MF-2 Interest Rate not been calculated based on the
Adjusted Group I Net WAC Cap Rate, over
(b) the amount of interest that the Class MF-2 Certificates
received on such Payment Date based on the Adjusted Group I
Net WAC Cap Rate.
"Class MF-2 Certificate" means any one of the Class MF-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class MF-2 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class MF-2 Interest Rate on the Class MF-2 Principal Balance.
"Class MF-2 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class MF-2 Certificateholders pursuant to
Sections 8.04, 8.10 and 8.11 on such Payment Date.
"Class MF-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MF-2 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date for the
Group I Certificates or a Group I Trigger Event exists, the
Group I Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AF
and Class MF-1 Formula Principal Distribution Amounts; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group I Certificates and no Group I Trigger Event exists, the
excess of
(A) the aggregate Class AF, Class MF-1 and Class MF-2
Principal Balances, less distributions on such
Payment Date in respect of the Class AF and Class
MF-1 Formula Principal Distribution Amounts, over
1-21
(B) the lesser of
(x) 79.00% of the Group I Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group I Pool Scheduled Principal Balance
with respect to such Payment Date (after
giving effect to unscheduled principal
collections received during the related Due
Period), less the Group I OC Floor.
"Class MF-2 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class MF-2 Current Interest Amount for
such Payment Date over the amount actually paid on the Class MF-2 Certificates
in respect of the Class MF-2 Current Interest Amount on such Payment Date.
"Class MF-2 Interest Rate" means a floating rate per annum equal to the
lesser of (a) 6.981% per annum and (b) the Adjusted Group I Net WAC Cap Rate.
"Class MF-2 Principal Balance" means, as to any Payment Date, the
Original Class MF-2 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class MF-2 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class MF-2 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class MV Certificates" means the Class MV-1 and Class MV-2
Certificates, collectively.
"Class MV-1 Allocated Realized Loss Amount" means, with respect to any
Payment Date, that portion, if any, of the Realized Loss Amount for such Payment
Date allocated to the Class MV-1 Certificates in accordance with Section
8.12(b).
"Class MV-1 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class MV-1 Interest Rate on the Unpaid Class MV-1 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(e)(iv)).
"Class MV-1 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of
(a) the amount of interest that the Class MV-1 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the Class MV-1 Interest Rate
not been calculated based on the Adjusted Group II Net WAC Cap
Rate, over
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(b) the amount of interest that the Class MV-1 Certificates
received on such Payment Date based on the Adjusted Group II
Net WAC Cap Rate.
"Class MV-1 Certificate" means any one of the Class MV-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class MV-1 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class MV-1 Interest Rate on the Class MV-1 Principal Balance.
"Class MV-1 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class MV-1 Certificateholders pursuant to
Sections 8.04, 8.09, 8.10 and 8.11 on such Payment Date.
"Class MV-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MV-1 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date for the
Group II Certificates or a Group II Trigger Event exists, the
Group II Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AV
Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group II Certificates and no Group II Trigger Event exists,
the excess of
(A) the aggregate Class AV and Class MV-1 Principal
Balances, less distributions on such Payment Date in
respect of the Class AV Formula Principal
Distribution Amount, over
(B) the lesser of
(x) 68.50% of the Group II Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group II Pool Scheduled Principal
Balance with respect to such Payment Date
(after giving effect to unscheduled
principal collections received during the
related Due Period), less the Group II OC
Floor.
"Class MV-1 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class MV-1 Current Interest Amount for
such Payment Date over the
1-23
amount actually paid on the Class MV-1 Certificates in respect of the Class MV-1
Current Interest Amount on such Payment Date.
"Class MV-1 Interest Rate" means a floating rate per annum equal to the
least of (a) LIBOR plus the Class MV-1 Margin, (b) the Adjusted Group II Net WAC
Cap Rate and (c) 15% per annum.
"Class MV-1 Margin" means 1.50%.
"Class MV-1 Principal Balance" means, as to any Payment Date, the
Original Class MV-1 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class MV-1 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class MV-1 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class MV-2 Allocated Realized Loss Amount" means, with respect to any
Payment Date, that portion, if any, of the Realized Loss Amount for such Payment
Date allocated to the Class MV-2 Certificates in accordance with Section
8.12(b).
"Class MV-2 Allocated Realized Loss Interest Amount" means, with
respect to any Payment Date, interest accrued during the related Accrual Period
at the Class MV-2 Interest Rate on the Unpaid Class MV-2 Realized Loss Amount
for the immediately preceding Payment Date (after giving effect to any payment
in reduction thereof on such Payment Date pursuant to Section 8.04(e)(vi)).
"Class MV-2 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class MV-2 Certificates would
have been entitled to receive on such Payment Date (but not in
excess of 15.00% per annum) had the Class MV-2 Interest Rate
not been calculated based on the Adjusted Group II Net WAC Cap
Rate, over
(b) the amount of interest that the Class MV-2 Certificates
received on such Payment Date based on the Adjusted Group II
Net WAC Cap Rate.
"Class MV-2 Certificate" means any one of the Class MV-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class MV-2 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class MV-2 Interest Rate on the Class MV-2 Principal Balance.
1-24
"Class MV-2 Distribution Amount" means, for any Payment Date, the
amount to be distributed to the Class MV-2 Certificateholders pursuant to
Sections 8.04, 8.09, 8.10 and 8.11 on such Payment Date.
"Class MV-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MV-2 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date for the
Group II Certificates or a Group II Trigger Event exists, the
Group II Formula Principal Distribution Amount less
distributions on such Payment Date in respect of the Class AV
and Class MV-1 Formula Principal Distribution Amounts; and
(ii) if the Payment Date is on or after the Stepdown Date for the
Group II Certificates and no Group II Trigger Event exists,
the excess of
(A) the aggregate Class AV, Class MV-1 and Class MV-2
Principal Balances, less distributions on such
Payment Date in respect of the Class AV and Class
MV-1 Formula Principal Distribution Amounts, over
(B) the lesser of
(x) 80.50% of the Group II Pool Scheduled
Principal Balance with respect to such
Payment Date (after giving effect to
unscheduled principal collections received
during the related Due Period), and
(y) the Group II Pool Scheduled Principal
Balance with respect to such Payment Date
(after giving effect to unscheduled
principal collections received during the
related Due Period), less the Group II OC
Floor.
"Class MV-2 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class MV-2 Current Interest Amount for
such Payment Date over the amount actually paid on the Class MV-2 Certificates
in respect of the Class MV-2 Current Interest Amount on such Payment Date.
"Class MV-2 Interest Rate" means a floating rate per annum equal to the
least of (a) LIBOR plus the Class MV-2 Margin, (b) the Adjusted Group II Net WAC
Cap Rate and (c) 15.00% per annum.
"Class MV-2 Margin" means 2.15%.
"Class MV-2 Principal Balance" means, as to any Payment Date, the
Original Class MV-2 Principal Balance minus the sum of
1-25
(a) all amounts distributed to Holders of Class MV-2 Certificates
on prior Payment Dates on account of principal, plus
(b) all Class MV-2 Allocated Realized Loss Amounts prior to such
Payment Date.
"Class P Certificate" means the Class P Certificate, executed and
delivered by the Trustee and authenticated by the Certificate Registrar
substantially in the form set forth in Exhibit R and evidencing the aggregate of
the Class P(F) and Class P(V) Interests.
"Class P Certificate Pass-Through Rate" means a fixed rate of 0.00% per
annum.
"Class P Certificateholder" shall mean Green Tree Finance Corp.--Two.
"Class P Distribution Amount" means, for any Payment Date, that portion
of the Remaining Excess Cashflow eligible for distribution in respect of the
Class P Certificate in accordance with the priorities set forth in Section
8.04(f)(ii) and all Prepayment Charges distributed pursuant to Section 8.07(f).
"Class P(F) Interest" means an interest evidenced by the Class P
Certificate and designated a "regular interest" in the Subsidiary REMIC for
purposes of the REMIC Provisions.
"Class P(F) Principal Balance" means the Original Principal Balance of
the Class P(F) Interest less all amounts previously distributed to the Class P
Certificateholder in respect of the Class P(F) Interest pursuant to Section
8.04(f)(ii).
"Class P Principal Balance" means, for any Payment Date, the Original
Class P Principal Balance of the Class P Certificate less all amounts previously
distributed to the Class P Certificateholder pursuant to Section 8.04(f)(ii).
"Class Principal Balance" means any of the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class MF-1, Class MF-2, Class BF-1, Class BF-2, Class
AV-1, Class MV-1, Class MV-2, Class BV-1, Class BV-2 or Class P Principal
Balances, as appropriate.
"Class P(V) Interest" means an interest evidenced by the Class P
Certificate and designated a "regular interest" in the Subsidiary REMIC for
purposes of the REMIC Provisions.
"Class P(V) Principal Balance" means the Original Principal Balance of
the Class P(V) Interest less all amounts previously distributed to the Class P
Certificateholder in respect of the Class P(V) Interest pursuant to Section
8.04(f)(ii).
"Class R Certificate" means a Certificate for Home Equity Loans, Series
2002-C, bearing the designation "Class R," executed and delivered by the Trustee
and authenticated by the Certificate Registrar, substantially in the Form of
Exhibit Q, and evidencing the aggregate of the Class R-I, Class R-II and Class
R-III Interests designated as "residual interests" in the Subsidiary REMIC,
Intermediate REMIC and Master REMIC, respectively, for purposes of the REMIC
provisions.
1-26
"Class R Certificateholder" means the person in whose name a Class R
Certificate is registered on the Certificate Register.
"Class R-I Interest" means the uncertificated interest designated as
the "residual interest" in the Subsidiary REMIC for purposes of the REMIC
provisions.
"Class R-II Interest" means the uncertificated interest designated as
the "residual interest" in the Intermediate REMIC for purposes of the REMIC
Provisions.
"Class R-III Distribution Amount" means, for any Payment Date, that
portion of the Amount Available eligible for distribution in respect of the
Class R-III Interest in accordance with the priorities set forth in Sections
8.04(f)(iii) and 12.04(d)(iv).
"Class R-III Interest" means the uncertificated interest designated as
the "residual interest" in the Master REMIC for purposes of the REMIC
Provisions.
"Class S-1F Interest" and "Class S-1V Interest" means, respectively, a
regular interest in the Subsidiary REMIC, which is held as an asset of the
Intermediate REMIC, is entitled to monthly distributions as provided in Section
8.07(d) and (e), respectively, and has the Original Principal Balance and bears
interest at the Pass-Through Rate specified in Section 2.05(d).
"Class S-2F Interest" means, respectively, any one of the Class S-2F(1)
Interest, Class S-2F(2) Interest, Class S-3F(3) Interest, Class S-2F(4)
Interests, Class S-2F(5) Interests, Class S-2F(6) Interests, Class S-2F(7)
Interests, Class S-2F(8) Interests, Class S-2F(9) Interests, Class S-2F(10)
Interests, Class S-2F(11) Interests, Class S-2F(12) Interests, and Class
S-2F(13) Interests, each of which is a regular interest in the Subsidiary REMIC,
which is held as an asset of the Intermediate REMIC, is entitled to monthly
distributions as provided in Section 8.07(d), and has the Original Principal
Balance and bears interest at the Pass-Through Rate specified in Section
2.05(d)(i).
"Class S-2V Interest" means, respectively, any one of the Class S-2V(1)
Interest, Class S-2V(2) Interest, Class S-3V(3) Interest, Class S-2V(4)
Interests, Class S-2V(5) Interests, Class S-2V(6) Interests, Class S-2V(7)
Interests, Class S-2V(8) Interests, Class S-2V(9) Interests, Class S-2V(10)
Interests, Class S-2V(11) Interests, Class S-2V(12) Interests, and Class
S-2V(13) Interests, each of which is a regular interest in the Subsidiary REMIC,
which is held as an asset of the Intermediate REMIC, is entitled to monthly
distributions as provided in Section 8.07(e), and has the Original Principal
Balance and bears interest at the Pass-Through Rate specified in Section
2.05(d).
"CLEAR Advance Facility" has the meaning assigned in Section 5.11(f).
"CLEAR Advance Facility Notice" has the meaning assigned in Section
5.11(g).
"Closing Date" means July 9, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined LTV" means, with respect to any Loan, the percentage obtained
by dividing
1-27
(a) the sum of
(i) the current principal balance of such Loan, plus
(ii) the outstanding principal balance, as of the date of
origination of such Loan, of any loan secured by a
prior lien on the property which secures the Loan
(the "Collateral"), by
(b) the lesser of
(i) the appraised value of the Collateral based on an
appraisal made for the originator of the Loan by an
independent fee appraiser (or by an employee of the
Originator who is a licensed appraiser) at the time
of origination of the Loan, and
(ii) the sales price of the Collateral at the time of
origination of the Loan; provided, that, in the case
of a Loan the proceeds of which were used to
refinance an existing mortgage loan, the amount
described in clause (ii) shall be the amount to be
used for purposes of clause (ii).
"Computer Tape" means the computer tape generated by the Originator
which provides information relating to the Loans and which was used by the
Originator in selecting the Loans, and includes the master file and the history
file.
"Contributed Cash" means the sum of (a) the amount, if any, by which
the Group I Amount Available exceeds the amount payable to the Class S-1F and
Class S-2F Uncertificated Subsidiary Interests under Section 8.07(d) on each of
the first two Payment Dates and (b) the amount, if any, by which the Group II
Amount Available exceeds the amount payable to the Class S-1V and Class S-2V
Uncertificated Subsidiary Interests under Section 8.07(e) on each of the first
two Payment Dates.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Agreement is
located at the address set forth in Section 12.08.
1-28
"Corresponding Certificate Class" means, with respect to each Class of
Uncertificated Intermediate Interests other than Class I-F Accrual, I-AF-IO, I-V
Accrual and I-AV-IO Interests, as follows:
Uncertificated Intermediate Interest Corresponding Certificate Class
------------------------------------ -------------------------------
Class I-AF-1 Class AF-1
Class I-AF-2 Class AF-2
Class I-AF-3 Class AF-3
Class I-AF-4 Class AF-4
Class I-MF-1 Class MF-1
Class I-MF-2 Class MF-2
Class I-BF-1 Class BF-1
Class I-BF-2 Class BF-2
Class I-AV-1 Class AV-1
Class I-MV-1 Class MV-1
Class I-MV-2 Class MV-2
Class I-BV-1 Class BV-1
Class I-BV-2 Class BV-2
"Counsel for the Originator" means Xxxxxx and Xxxxxx, P.A., or other
legal counsel for the Originator.
"Counsel for the Seller" means Xxxxxx and Xxxxxx, P.A., or other legal
counsel for the Seller.
"Cumulative Realized Loss Ratio" means, for any Payment Date and
(a) the Group I Loans, a fraction, expressed as a percentage, the
numerator of which is the Cumulative Realized Losses for the
Group I Loans for that Payment Date and the denominator of
which is the sum of the Cut-off Date Group I Pool Principal
Balance plus the amount on deposit in the Pre-Funding Group I
Account immediately prior to the Post-Funding Payment Date;
and
(b) the Group II Loans, a fraction, expressed as a percentage, the
numerator of which is the Cumulative Realized Losses for the
Group II Loans for that Payment Date and the denominator of
which is the sum of the Cut-off Date Group II Pool Principal
Balance plus the amount on deposit in the Pre-Funding Group II
Account immediately prior to the Post-Funding Payment Date;
and
(c) the Loans, a fraction, expressed as a percentage, the
numerator of which is the Cumulative Realized Losses for the
Loans for that Payment Date and the denominator of which is
the sum of the Cut-off Date Group I Pool Principal Balance,
the Cut-off Date Group II Pool Principle Balance and plus the
amount on deposit in the Pre-Funding Account immediately prior
to the Post-Funding Payment Date.
1-29
"Cumulative Realized Losses" means, for any Payment Date and the Group
I Loans, the Group II Loans and the Loans, respectively, the sum of the Realized
Losses for such Loans for that Payment Date and each preceding Payment Date
since the Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied"
for any Payment Date, that the Cumulative Realized Loss Ratio for the Group I
and Group II Loans, respectively, for such Payment Date is less than or equal to
the percentage set forth below for the specified period:
Group I Group II
------- --------
Month Percentage Month Percentage
----- ---------- ----- ----------
37-48 4.00% 37-48 3.25%
49-60 5.25% 49-60 4.25%
61-72 6.00% 61-72 5.00%
73 and thereafter 6.25% 73 and thereafter 5.25%
"Custodian" means at any time an Eligible Institution, or a financial
institution organized under the laws of the United States or any State, which is
not an Affiliate of the Originator, which is subject to supervision and
examination by Federal or State authorities and whose commercial paper or
unsecured long-term debt (or, in the case of a member of a bank holding company
system, the commercial paper or unsecured long-term debt of such bank holding
company) has been rated, if rated by such rating company, A-1+ by S&P; or P-1 by
Xxxxx'x in the case of commercial paper, or, if rated by such rating company,
BBB+ or higher by S&P and Baa2 or higher by Xxxxx'x in the case of unsecured
long-term debt, as is acting at such time as Custodian of the Loan Files
pursuant to Section 4.01.
"Cut-off Date" means, with respect to each Initial Loan, May 31, 2002,
with respect to each Additional Loan, June 30, 2002 (or the date of origination,
if later); and with respect to each Subsequent Loan, the applicable Subsequent
Cut-off Date.
"Cut-off Date Group I Pool Principal Balance" means the aggregate of
the Cut-off Date Principal Balances of all Group I Loans.
Cut-off Date Group II Pool Principal Balance" means the aggregate of
the Cut-off Date Principal Balances of all Group II Loans.
"Cut-off Date Principal Balance" means, with respect to any Loan, the
Scheduled Principal Balance thereof on the related Cut-off Date.
"Data" has the meaning assigned in Section 5.12(d).
"Defaulted Loan" means a Loan with respect to which the Servicer
commenced foreclosure proceedings, made a sale of such Loan to a third party for
foreclosure or enforcement, or as to which there was a Delinquent Payment 180 or
more days past due.
"Definitive Certificates" has the meaning assigned in Section 9.02(e).
1-30
"Delinquent Payment" means, with respect to any Loan and any Due
Period, any payment or portion of a payment of principal or interest that was
scheduled to be made during such Due Period under such Loan (after giving effect
to any reduction in the principal amount deemed owed on such Loan by the
Obligor) and was not received or applied during such Due Period; provided,
however, that with respect to any Liquidated Loan, the payment scheduled to be
made in the Due Period in which such Loan became a Liquidated Loan shall not be
deemed a Delinquent Payment.
"Depository" means the initial Depository, The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of
(a) one Class AF-1 Certificate evidencing $107,938,000 in Original
Class AF-1 Principal Balance,
(b) one Class AF-2 Certificate evidencing $15,125,000 in Original
Class AF-2 Principal Balance,
(c) one Class AF-3 Certificate evidencing $52,937,000 in Original
Class AF-3 Principal Balance,
(d) one Class AF-4 Certificate evidencing $41,250,000 in Original
Class AF-4 Principal Balance,
(e) one Class AF-IO Certificate evidencing $123,750,000 in
Original Class AF-IO Notional Amount,
(f) one Class MF-1 Certificate evidencing $19,938,000 in Original
Class MF-1 Principal Balance,
(g) one Class MF-2 Certificate evidencing $17,187,000 in Original
Class MF-2 Principal Balance,
(h) one Class BF-1 Certificate evidencing $13,063,000 in Original
Class BF-1 Principal Balance,
(i) one Class AV-1 Certificate evidencing $158,500,000 in Original
Class AV-1 Principal Balance,
(j) one Class AV-IO Certificate evidencing $89,600,000 in Original
Class AV-IO Notional Amount,
(k) one Class MV-1 Certificate evidencing $14,500,000 in Original
Class MV-1 Principal Balance,
(l) one Class MV-2 Certificate evidencing $12,000,000 in Original
Class MV-2 Principal Balance,
1-31
(m) one Class BV-1 Certificate evidencing $9,000,000 in Original
Class BV-1 Principal Balance, and
(n) one Class BF-2 Certificate evidencing $7,562,000 in Original
Class BF-2 Principal Balance,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(5) of the Uniform Commercial
Code of the State of New York.
"Depository Participant" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date" means the second Business Day preceding each
Payment Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section
9.02(b)(3).
"Due Period" means, for any Payment Date, a calendar month during the
term of this Agreement.
"Electronic Ledger" means the electronic master record of promissory
notes of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following:
(a) an account maintained with an Eligible Institution;
(b) an account or accounts the deposits in which are fully insured
by either the Bank Insurance Fund or the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation;
(c) a trust account (which shall be a "segregated trust account")
maintained with the corporate trust department of a federal or
state chartered depository institution or trust company with
trust powers and acting in its fiduciary capacity for the
benefit of the Trustee hereunder, which depository institution
or trust company shall have capital and surplus of not less
than $50,000,000; or
(d) an account that will not cause any of the Rating Agencies to
downgrade or withdraw its then-current rating assigned to the
Certificates, as evidenced in writing by each of the Rating
Agencies.
"Eligible Institution" means any depository institution (which may be
the Trustee or an Affiliate of the Trustee) organized under the laws of the
United States or any State, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or State authorities and whose
short-term deposits have been rated, if rated by such rating company, A-1+ by
S&P and
1-32
P-1 by Xxxxx'x or whose unsecured long-term debt has been rated in one of the
two highest rating categories by S&P and Xxxxx'x.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Originator or any Person
(a) which is qualified to act as Servicer of the Loans under
applicable federal and state laws and regulations, and
(b) which services not less than an aggregate of $100,000,000 in
outstanding principal amount of home equity loans,
manufactured housing conditional sales contracts and
installment loan agreements.
"Eligible Substitute Loan" means, as to any Replaced Loan for which an
Eligible Substitute Loan is being substituted pursuant to Section 3.06(b), and
any Prepaid Loan for which an Eligible Substitute Loan is being substituted
pursuant to Section 2.06, a Loan that
(i) 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 made as of the date of its
substitution rather than as of the applicable Cut-off
Date or the Closing Date) in Sections 3.02 and 3.03
and does not cause any of the representations and
warranties in Sections 3.03, 3.04 and 3.05, after
giving effect to such substitution, to be incorrect,
(ii) after giving effect to the scheduled payment due in
the month of such substitution, has a Scheduled
Principal Balance that is not greater than the
Scheduled Principal Balance of such Replaced Loan or,
but for such Principal Prepayment in Full, the
Scheduled Principal Balance of such Prepaid Loan, as
the case may be,
(iii) has a Loan Interest Rate that is at least equal to
the Loan Interest Rate of such Replaced Loan or
Prepaid Loan, as the case may be,
(iv) has a remaining term to scheduled maturity that is
not greater than the remaining term to scheduled
maturity of the Replaced Loan or Prepaid Loan, as the
case may be,
(v) as of the date of its origination, was identified by
the Originator under its standard underwriting
criteria as the same credit grade as the Replaced
Loan or Prepaid Loan, as the case may be,
(vi) the mortgage securing such Loan is in a lien position
that is the same or better than the mortgage securing
the Replaced Loan or Prepaid Loan, as the case may
be,
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(vii) the Combined LTV of such Loan is not more than 100
basis points higher than the Combined LTV of the
Replaced Loan or Prepaid Loan, as the case may be,
and
(viii) has a fixed rate of interest if the Replaced Loan or
Prepaid Loan is a Group I Loan and a variable rate of
interest if the Replaced Loan or Prepaid Loan is a
Group II Loan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"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 5.09, all as such policy relates to Loans comprising a
portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Expense Reimbursement Amounts" has the meaning assigned in Section
5.11(f).
"Extra Principal Distribution Amount" means, for any Payment Date, an
amount equal to the lesser of:
(a) with respect to the Group I Certificates,
(i) the excess, if any, of (x) the Required
Overcollateralization Amount for the Group I
Certificates over (y) the Overcollateralization
Amount for the Group I Certificates minus the
aggregate amount of all prior payments of Class BF-2
Extra Principal Distribution Amount, and
(ii) the Group I Excess Cashflow for such Payment Date.
(b) with respect to the Group II Certificates,
(i) the excess, if any, of (x) the Required
Overcollateralization Amount for the Group II
Certificates over (y) the Overcollateralization
Amount for the Group II Certificates, and
(ii) the Group II Excess Cashflow for such Payment Date.
"Federal Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
"FHA-Insured Loan" means a home equity loan that has been or is being
reported to the Federal Housing Administration, or any successor thereto
("FHA"), as eligible for credit insurance provided by FHA pursuant to Title I of
the National Housing Act.
"FICO Score" means a credit score derived on the basis of a methodology
developed by Fair Xxxxx and Company.
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"Fidelity Bond" means the fidelity bond maintained by the Servicer or
any similar replacement bond, meeting the requirements of Section 5.09, as such
bond relates to Loans comprising a portion of the corpus of the Trust.
"FIFO" has the meaning assigned in Section 5.11(e).
"Final Payment Date" means the Payment Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
12.04.
"Fitch" means Fitch Ratings, or any successor thereto.
"GNMA" means the Government National Mortgage Association, or any
successor thereto.
"Group I Amount Available" means, for any Payment Date, an amount equal
to the sum of the following, in each case in respect of the Group I Loans:
(a) the sum of
(i) the amount on deposit in the Certificate Account as
of the close of business on the last day of the
related Due Period, plus
(ii) any Advances deposited in the Certificate Account
with respect to such Payment Date, plus
(iii) any amounts transferred to the Certificate Account
for the Single Interest Excess Sub-Account in respect
of Group I Loans pursuant to Section 8.02(c), or from
the Pre-Funding Group I Account pursuant to Section
8.08(b)(iii), that are on deposit in the Certificate
Account on such Payment Date, minus
(b) the sum of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from
the Certificate Account pursuant to clauses (i)
through (v) of Section 8.04(a), and
(iii) any amounts on deposit in the Certificate Account as
of the close of business on the last day of the
related Due Period representing collections in
respect of Principal Prepayments in Full (other than
any amounts referred to in Section 2.06(vii)) on
Loans for which a substitution has been made in
accordance with Section 2.06.
provided, that, solely for purposes of Section 8.07(d), (f)
and (g), this term shall be modified such that clause (b)(ii)
above shall also include amounts withdrawn pursuant to Section
8.04(b)(ii); provided, further, that solely for purposes of
Sections 8.07(a) and
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8.07(c), this term as defined above shall be modified to take into account, for
any Payment Date, all corresponding amounts distributed pursuant to Section
8.07(d).
"Group I Certificate" means a Certificate for Home Equity Loans, Series
2002-C, Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-IO, Class MF-1,
Class MF-2, Class BF-1, or Class BF-2 Certificate, all executed and delivered by
the Trustee substantially in the form of Exhibit A, B, or C, as applicable.
"Group I Excess Cashflow" means, for any Payment Date, the Group I
Amount Available less amounts distributed on such Payment Date pursuant to
Section 8.04(b).
"Group I Formula Principal Distribution Amount" means, for any Payment
Date, the sum of the following, in each case in respect of the Group I Loans:
(a) all scheduled payments of principal due on each outstanding
Loan during the prior Due Period as specified in the
amortization schedule at the time applicable thereto (after
adjustments for previous Partial Principal Prepayments and
after any adjustment to such amortization schedule by reason
of any bankruptcy of an Obligor or similar proceeding or any
moratorium or similar waiver or grace period); plus
(b) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with
respect to the Loans; plus
(c) the aggregate Scheduled Principal Balance of all Loans that
became Liquidated Loans during the prior Due Period plus the
amount of any reduction in principal balance of any Loan
during the prior Due Period pursuant to bankruptcy proceedings
involving the related Obligor; plus
(d) the aggregate Scheduled Principal Balance of all Loans
repurchased, and all amounts deposited in lieu of the
repurchase of any Loan, during the prior Due Period pursuant
to Section 3.06(a) or, in the event of a substitution of a
Loan in accordance with Section 3.06(b), any amount required
to be deposited by the Servicer in the Certificate Account
during the prior Due Period pursuant to Section 3.06(b)(vi);
plus
(e) any amount described in clauses (a) through (d) above that was
not previously distributed because of an insufficient amount
of funds available in the Certificate Account; plus
(f) on the Post-Funding Payment Date, any amount withdrawn from
the Pre-Funding Group I Account and deposited in the
Certificate Account.
"Group I Loan" means a Loan identified as such on the List of Loans.
"Group I Net WAC Cap Rate" means, with respect to a Payment Date,
(a) the Weighted Average Loan Rate of the Group I Loans, minus
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(b) the sum of
(i) the per annum rates at which the Servicing Fee and
the Backup Servicing Fee are paid;
(ii) a fraction, expressed as a percentage, the numerator
of which is all other amounts payable to the
Servicer, the Backup Servicer and the Trustee on such
Payment Date pursuant to Section 8.04(b)(i) and
Section 8.04(c)(xii) and the denominator of which is
the Group I Pool Scheduled Principal Balance on such
Payment Date.
For purposes of this definition and the first Payment Date, Group I Loans shall
include only those that are Initial Loans or Additional Loans.
"Group I OC Floor" means $1,375,000, which equals 0.50% of the sum of
(i) the Cut-off Date Group I Pool Principal Balance as of the
Closing Date plus
(ii) amounts deposited in the Pre-Funding Group I Account, if any,
on the Closing Date.
"Group I Pool Scheduled Principal Balance" means, for any Payment Date,
the aggregate Scheduled Principal Balance for such Payment Date of all Group I
Loans that were outstanding during the immediately preceding Due Period.
"Group I Subaccount" means the subaccount of the Basis Risk Reserve
Fund established and maintained in accordance with Section 8.10.
"Group I Trigger Event" exists for any Payment Date if
(a) the Average Sixty-Day Delinquency Ratio Test for the Group I
Loans is not satisfied or
(b) the Cumulative Realized Losses Test for the Group I Loans is
not satisfied.
"Group II Amount Available" means, for any Payment Date, an amount
equal to the sum of the following, in each case in respect of the Group II
Loans:
(a) the sum of
(i) the amount on deposit in the Certificate Account as
of the close of business on the last day of the
related Due Period, plus
(ii) any Advances deposited in the Certificate Account
with respect to such Payment Date, plus
(iii) any amounts transferred to the Certificate Account
for the Single Interest Excess Sub-Account in respect
of Group II Loans pursuant to Section
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8.02(c), or from the Pre-Funding Group II Account
pursuant to Section 8.08(b)(iii), that are on deposit
in the Certificate Account on such Payment Date,
minus
(b) the sum of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from
the Certificate Account pursuant to clauses (i)
through (v) of Section 8.04(a), and
(iii) any amounts on deposit in the Certificate Account as
of the close of business on the last day of the
related Due Period representing collections in
respect of Principal Prepayments in Full (other than
any amounts referred to in Section 2.06(vii)) on
Loans for which a substitution has been made in
accordance with Section 2.06.
provided, that, solely for purposes of Section 8.07(e), (f)
and (g), this term shall be modified such that clause (b)(ii)
above shall also include amounts withdrawn pursuant to Section
8.04(d)(ii); provided, further, that solely for purposes of
Sections 8.07(b) and 8.07(c), this term as defined above shall
be modified to take into account, for any Payment Date, all
corresponding amounts distributed pursuant to Section 8.07(e).
"Group II Certificate" means a Certificate for Home Equity Loans,
Series 2002-C, Class AV-1, Class AV-IO, Class MV-1, Class MV-2, Class BV-1, or
Class BV-2 Certificate, all executed and delivered by the Trustee substantially
in the form of Exhibit A, B or C, as applicable.
"Group II Excess Cashflow" means, for any Payment Date, the Group II
Amount Available less amounts distributed on such Payment Date pursuant to
Section 8.04(e).
"Group II Formula Principal Distribution Amount" means, for any Payment
Date, the sum of the following, in each case in respect of the Group II Loans:
(a) all scheduled payments of principal due on each outstanding
Loan during the prior Due Period as specified in the
amortization schedule at the time applicable thereto (after
adjustments for previous Partial Principal Prepayments and
after any adjustment to such amortization schedule by reason
of any bankruptcy of an Obligor or similar proceeding or any
moratorium or similar waiver or grace period); plus
(b) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with
respect to the Loans; plus
(c) the aggregate Scheduled Principal Balance of all Loans that
became Liquidated Loans during the prior Due Period plus the
amount of any reduction in principal balance of any Loan
during the prior Due Period pursuant to bankruptcy proceedings
involving the related Obligor; plus
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(d) the aggregate Scheduled Principal Balance of all Loans
repurchased, and all amounts deposited in lieu of the
repurchase of any Loan, during the prior Due Period pursuant
to Section 3.06(a) or, in the event of a substitution of a
Loan in accordance with Section 3.06(b), any amount required
to be deposited by the Servicer in the Certificate Account
during the prior Due Period pursuant to Section 3.06(b)(vi);
plus
(e) any amount described in clauses (a) through (d) above that was
not previously distributed because of an insufficient amount
of funds available in the Certificate Account; plus
(f) on the Post-Funding Payment Date, any amount withdrawn from
the Pre-Funding Group II Account and deposited in the
Certificate Account.
"Group II Loan" means a Loan identified as such on the List of Loans.
"Group II Net WAC Cap Rate" means, with respect to a Payment Date,
(a) the Weighted Average Loan Rate of the Group II Loans, minus
(b) the sum of
(i) the per annum rates at which the Servicing Fee and
the Backup Servicing Fee are paid;
(ii) a fraction, expressed as a percentage, the numerator
of which is all other amounts payable to the
Servicer, the Backup Servicer and the Trustee on such
Payment Date pursuant to Section 8.04(d)(i) and
Section 8.04(e)(xiii) and the denominator of which is
the Pool Scheduled Principal Balance of the Group II
Loans on such Payment Date.
For purposes of this definition and the first Payment Date, Group II Loans shall
include only those that are Initial or Additional Loans.
"Group II OC Floor" means $1,000,000, which equals 0.50% of the sum of
(i) the Cut-off Date Group II Pool Principal Balance as
of the Closing Date plus
(ii) amounts deposited in the Pre-Funding Group II
Account, if any, on the Closing Date.
"Group II Pool Scheduled Principal Balance" means, for any Payment
Date, the aggregate Scheduled Principal Balance for such Payment Date of all
Group II Loans that were outstanding during the immediately preceding Due
Period.
"Group II Subaccount" means the subaccount of the Basis Risk Reserve
Fund established and maintained in accordance with Section 8.10.
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"Group II Trigger Event" exists for any Payment Date if
(a) the Average Sixty-Day Delinquency Ratio Test for the Group II
Loans is not satisfied or
(b) the Cumulative Realized Losses Test for the Group II Loans is
not satisfied.
"Initial Loan" means a Loan identified as such on the List of Loans
attached hereto, the aggregate Cut-off Date Principal Balance of which is
$179,325,102 in Group I Loans and $89,806,555 in Group II Loans.
"Intermediate Adjusted Group I Net WAC Cap Rate" means, with respect to
a Payment Date, the Group I Net WAC Cap Rate minus a fraction, expressed as a
percentage, the numerator of which is the product of (x) the Class AF-IO
Interest Rate for such Payment Date times (y) (i) the sum of the Subsidiary
Interest Adjusted Principal balance of (1) for each Payment Date through October
2002, the Class S-2F(1) Interest, (2) for each Payment Date through January
2003, the Class S-2F(2) Interest, (3) for each Payment Date through April 2003,
the Class S-2F(3) Interest, (4) for each Payment Date through July 2003, the
Class S-2F(4) Interest, (5) for each Payment Date through October 2003, the
Class S-2F(5) Interest, (6) for each Payment Date through January 2004, the
Class S-2F(6) Interest, (7) for each Payment Date through April 2004, the Class
S-2F(7) Interest, (8) for each Payment Date through July 2004, the Class S-2F(8)
Interest, (9) for each Payment Date through October 2004, the Class S-2F(9)
Interest, (10) for each Payment Date through January 2005, the Class S-2F(10)
Interest, (11) for each Payment Date through April 2005, the Class S-2F(11)
Interest, (12) for each Payment Date through July 2005 Payment Date, the Class
S-2F(12) Interest, (13) for each Payment Date through October 2005, the Class
S-2F(13) Interest, (ii) 0 after the October 2005 Payment Date; and the
denominator of which is the sum of the Subsidiary Interest Adjusted Principal
Balances of the Class S-1F and Class S-2F Interests.
"Intermediate Adjusted Group II Net WAC Cap Rate" means, with respect
to a Payment Date, the Group II Net WAC Cap Rate minus a fraction, expressed as
a percentage, the numerator of which is the product of (x) the Class AV-IO
Interest Rate for such Payment Date times (y) (i) the sum of the Subsidiary
Interest Adjusted Principal Balance of (1) for each Payment Date through October
2002, the Class S-2V(1) Interest, (2) for each Payment Date through January
2003, the Class S-2V(2) Interest, (3) for each Payment Date through April 2003,
the Class S-2V(3) Interest, (4) for each Payment Date through July 2003, the
Class S-2V(4) Interest, (5) for each Payment Date through October 2003, the
Class S-2V(5) Interest, (6) for each Payment Date through January 2004, the
Class S-2V(6) Interest, (7) for each Payment Date through April 2004, the Class
S-2V(7) Interest, (8) for each Payment Date through July 2004, the Class S-2V(8)
Interest, (9) for each Payment Date through October 2004, the Class S-2V(9)
Interest, (10) for each Payment Date through January 2005, the Class S-2V(10)
Interest, (11) for each Payment Date through April 2005, the Class S-2V(11)
Interest, (12) for each Payment Date through July 2005, the Class S-2V(12)
Interest, (13) for each Payment Date through October 2005, the Class S-2V(13)
Interest, (ii) 0 after the October 2005 Payment Date; and the denominator of
which is the sum of the Subsidiary Interest Adjusted Principal Balances of the
Class S-1V and Class S-2V Interests.
1-40
"Intermediate Interest Principal Balance" means, with respect to each
Class of Intermediate REMIC Accretion Directed Interests, one-half the Principal
Balance of the Corresponding Certificate Class; with respect to the Class I-F
Accrual Interest, one-half the sum of the Group I Pool Scheduled Principal
Balance, the Pre-Funded Group I Amount and the Overcollateralization Amount for
the Group I Certificates; and with respect to the Class I-V Accrual Interest,
one-half the sum of the Group II Pool Scheduled Principal Balance, the
Pre-Funded Group II Amount and the Overcollateralization Amount for the Group II
Certificates.
"Intermediate REMIC" means the segregated pool of assets consisting of
the Uncertificated Subsidiary Interests, as to which assets a separate REMIC
election is to be made.
"Intermediate REMIC Accretion Directed Interests" means the
Uncertificated Intermediate Interests, other than the Class I-F Accrual
Interest, the Class I-AF-IO Interest, the Class I-V Accrual Interest and the
Class I-AV-IO Interest. In all cases, the principal balance of each Intermediate
REMIC Accretion Directed Interest shall maintain, including after giving effect
to any allocation of principal or loss, a direct and unvarying proportionality
to the principal balance of its Corresponding Certificate Class.
"Intermediate REMIC Group I Accretion Directed Interests" means the
Uncertificated Intermediate Group I Interests other than the Class I-F Accrual
Interest and the Class I-AF-IO Interest.
"Intermediate REMIC Group II Accretion Directed Interests" means the
Uncertificated Intermediate Group II Interests other than the Class I-V Accrual
Interest and the Class I-AV-IO Interest.
"LIBOR" means, with respect to any Accrual Period, the offered rate, as
established by the Trustee, for United States dollar deposits for one month that
appears on Telerate Page 3750 as of 11:00 A.M., London time, on the LIBOR Rate
Adjustment Date for such Accrual Period. If on any LIBOR Rate Adjustment Date
the offered rate does not appear on Telerate Page 3750, the Calculation Agent
will request each of the reference banks (which shall be major banks that are
engaged in transactions in the London interbank market selected by the
Calculation Agent) to provide the Trustee with its offered quotation for United
States dollar deposits for one month to prime banks in the London interbank
market as of 11:00 A.M., London time, on such date. If at least two reference
banks provide the Calculation Agent with such offered quotations, LIBOR on such
date will be the arithmetic mean, rounded upwards, if necessary, to the nearest
1/100,000 of 1% (.0000001), with five one-millionths of a percentage point
rounded upward, of all such quotations. If on such date fewer than two of the
reference banks provide the Calculation Agent with such offered quotations,
LIBOR on such date will be the arithmetic mean, rounded upwards, if necessary,
to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a
percentage point rounded upward, of the offered per annum rates that one or more
leading banks in the City of Minneapolis selected by the Calculation Agent are
quoting as of 11:00 A.M., Minnesota time, on such date to leading European banks
for United States dollar deposits for one month; provided, however, that if such
banks are not quoting as described above, LIBOR for such date will be LIBOR
applicable to the Accrual Period immediately preceding such Accrual Period; and
provided, further, that if the result of the foregoing would be for three
consecutive Payment Dates to base LIBOR on the rate applicable in the
immediately preceding Accrual
1-41
Period, for such third consecutive Payment Date the Calculation Agent shall
instead select an alternative comparable index (over which the Calculation Agent
has no control) used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent third
party.
"LIBOR Business Day" as used herein means a day that is both a Business
Day and a day on which banking institutions in the City of London, England are
not required or authorized by law to be closed.
"LIBOR Cap Counterparty" means HSBC Bank USA.
"LIBOR Rate Adjustment Date" means the second LIBOR Business Day prior
to the first day of the related Accrual Period.
"Liquidated Loan" means, with respect to any Due Period, either
(a) a Defaulted Loan as to which the Servicer has received from
the Obligor, or a third-party purchaser of the Loan, all
amounts which the Servicer reasonably and in good faith
expects to recover from or on account of such Loan, or
(b) a Loan
(i) upon which all or a portion of the first payment of
interest due by the Obligor was added to principal,
and
(ii) on which the Obligor failed to pay the full amount of
principal due on the Loan, as computed by the
Servicer;
provided, however, that any Loan which the Originator is obligated to repurchase
pursuant to Section 3.06, and did so repurchase or substitute therefor an
Eligible Substitute Loan in accordance with Section 3.06, shall be deemed not to
be a Liquidated Loan; and provided, further, that with respect to Due Periods
beginning on or after April 15, 2033, a Liquidated Loan also means any Loan as
to which the Servicer has commenced foreclosure proceedings, or made a sale of
the Loan to a third party for foreclosure or enforcement.
"Liquidation Expense" means any out-of-pocket expense (exclusive of any
overhead expense) which is incurred by the Servicer in connection with the
liquidation of any Defaulted Loan, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for pursuing claims in
bankruptcy proceedings of the related Obligor, 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 Loans, whether through
repossession, foreclosure sale or otherwise.
"List of Loans" means the lists identifying each Loan constituting part
of the Trust Fund and attached either to this Agreement as Exhibit L-1 or L-2 or
to a Subsequent Transfer Instrument, as such lists may be amended from time to
time pursuant to Section 2.06 or
1-42
Section 3.06(b) to add Eligible Substitute Loans and delete Replaced Loans or
Prepaid Loans, as the case may be. Each List of Loans shall set forth as to each
Loan identified on it
(a) the Cut-off Date Principal Balance,
(b) the amount of monthly payments due from the Obligor,
(c) the Loan Interest Rate, and
(d) the maturity date.
"Loan" means each closed-end home equity loan identified as such in the
List of Loans, which Loan is to be assigned and conveyed by the Seller to the
Trust, and includes, without limitation, all related mortgages, deeds of trust
and security deeds and any and all rights to receive payments due pursuant
thereto after the applicable Cut-off Date.
"Loan File" means, as to each Loan,
(a) the original promissory note (or executed lost note affidavit,
together with a copy of the note) duly endorsed in blank or in
the name of the Trustee for the benefit of the
Certificateholders,
(b) the original or a copy of the mortgage, deed of trust or
security deed or similar evidence of a lien on the related
improved property and evidence of due recording of such
mortgage, deed of trust or security deed, if available,
(c) if such Loan was originated by a lender other than the
Originator, the original or a copy of an assignment of the
mortgage, deed of trust or security deed by such lender to the
Originator,
(d) an assignment of the mortgage, deed of trust or security deed
in recordable form to the Trustee or in blank, and
(e) any extension, modification or waiver agreements.
"Loan Interest Rate" means, as to any Loan, the annual rate of interest
specified in the Loan.
"Master REMIC" means the segregated pool of assets consisting of the
Uncertificated Intermediate Interests and the Contributed Cash, as to which a
separate REMIC election is to be made.
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, for any Payment Date and (a) the Group I
Loans, one-twelfth of the product of 0.50% and the Group I Pool Scheduled
Principal Balance as of the preceding Payment Date (or, in the case of the first
Payment Date, as of the Closing Date) and (b) the Group II Loans, one-twelfth of
the product of 0.50% and the Group II Pool Scheduled
1-43
Principal Balance as of the preceding Payment Date (or, in the case of the first
Payment Date, as of the Closing Date).
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto; provided, that, if Moody's no longer has a rating outstanding on any
Class of Certificates, then references herein to "Xxxxx'x" shall be deemed to
refer to the NRSRO then rating any Class of the Certificates (or, if more than
one such NRSRO is then rating any Class of the Certificates, to such NRSRO as
may be designated by the Originator or the Trustee), and references herein to
ratings by or requirements of Xxxxx'x shall be deemed to have the equivalent
meanings with respect to ratings by or requirements of such NRSRO.
"Net Liquidation Loss" means, as to a Liquidated Loan, the difference
between
(a) the Repurchase Price of such Loan, and
(b) the Net Liquidation Proceeds with respect to such Liquidated
Loan, where such difference is a positive number.
"Net Liquidation Proceeds" means, as to a Liquidated Loan, the proceeds
received, or, for Loans which become Liquidated Loans pursuant to the last
proviso in the definition of "Liquidated Loan," the estimated proceeds to be
received, as of the last day of the Due Period in which such Loan became a
Liquidated Loan, from the Obligor, from a third-party purchaser of the Loan,
under insurance, or otherwise, net of Liquidation Expenses.
"Net Simple Interest Excess" means, for the Simple Interest Qualifying
Loans and any Due Period, the excess, if any, of the aggregate amount of Simple
Interest Excess (net of reimbursement to the Servicer for simple interest
advances on previous Payment Dates pursuant to Section 8.02(c) over the amount
of Simple Interest Shortfall.
"Net Simple Interest Shortfall" means, for the Simple Interest
Qualifying Loans and any Due Period, the excess, if any, of the aggregate Simple
Interest Shortfalls over the aggregate Simple Interest Excess (net of
reimbursement to the Servicer for simple interest advances on previous Payment
Dates pursuant to Section 8.02) for the related Due Period.
"Non-Recoverable Liquidation Expense" means, as to any Liquidation
Expense that has not yet been incurred by the Servicer, any portion of the
amount of such prospective Liquidation Expense which the Servicer reasonably
determines would, when combined with all Liquidation Expenses previously
incurred with respect to that Loan, exceed the Related Proceeds, and as to any
Liquidation Expense that has been incurred by the Server, any portion of the
amount of such Liquidation Expense that has subsequently been determined by the
Servicer to exceed the Related Proceeds, when combined with all Liquidation
Expenses previously incurred with respect to that Loan. In determining whether a
Liquidation Expense would be or has become a Non-Recoverable Liquidation
Expense, the Servicer may not take into account the possibility that it might
recover any amounts as the result of a deficiency judgment against the related
Obligor.
"NRSRO" means any nationally recognized statistical rating
organization.
1-44
"Obligor" means the person who owes payments under a Loan.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, President or any Vice President of the Originator or of the Seller
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may,
except as expressly provided herein, be salaried counsel for the Originator, the
Seller or the Servicer, as applicable, acceptable to the Trustee, the Originator
and the Seller.
"Original Aggregate Certificate Principal Balance" means $475,000,000.
"Original Aggregate Group I Certificate Principal Balance" means
$275,000,000.
"Original Aggregate Group II Certificate Principal Balance" means
$200,000,000.
"Original Class Notional Amount" means as to each of the Class AF-IO,
Class AV-IO, and Class B-3I Certificates, the amount set forth with respect to
such Class in Section 2.05(b).
"Original Class Principal Balance" means as to each Class of
Certificates (other than the Class AF-IO, Class AV-IO, Class B-3I and Class P
Certificates), the amount set forth with respect to such Class in Section
2.05(b).
"Original Principal Balance" means as to each Class of Uncertificated
Intermediate Interests (other than the Class I-AF-IO Interest and Class I-AV-IO
Interest) and Uncertificated Subsidiary Interests, Class P(F) Interest and Class
P(V) Interest, the respective amount set forth with respect to such Class in
Sections 2.05(c) and 2.05(d).
"Overcollateralization Amount" means, for any Payment Date and
(a) the Group I Certificates, the amount, if any, by which the
Group I Pool Scheduled Principal Balance on such Payment Date
exceeds the Aggregate Group I Certificate Principal Balance on
such Payment Date after giving effect to distributions in
respect of principal on the Group I Certificates on such
Payment Date, and
(b) the Group II Certificates, the amount, if any, by which the
Group II Pool Scheduled Principal Balance on such Payment Date
exceeds the Aggregate Group II Certificate Principal Balance
on such Payment Date, after giving effect to distributions in
respect of principal on the Group II Certificates on such
Payment Date.
"P&I Advance Facility" has the meaning assigned in Section 5.11(a).
"P&I Advance Facility Notice" has the meaning assigned in Section
5.11(b).
"P&I Reimbursement Amounts" has the meaning assigned in Section
5.11(a).
"Partial Principal Prepayment" means
1-45
(a) any Principal Prepayment other than a Principal Prepayment in
Full, and
(b) any cash amount deposited in the Certificate Account pursuant
to the proviso in Section 3.06(a) or pursuant to Section
3.06(b).
"Pass-Through Rate" means, with respect to each Class of Certificates,
the rate set forth for such Class in Section 2.05(b), with respect to each Class
of Uncertificated Intermediate Interests, the rate set forth in Section 2.05(c),
and with respect to each Class of Uncertificated Subsidiary Interests, the rate
set forth in Section 2.05(d).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Payment Date" means the fifteenth day of each calendar month during
the term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing in August 2002.
"Percentage Interest" means, as to any Certificate or the Class R
Certificate, the percentage interest evidenced thereby in distributions made on
the related Class, such percentage interest being equal to:
(a) as to any Certificate other than the Class B-3I and Class P
Certificates, the percentage (carried to eight places)
obtained from dividing the denomination of such Certificate by
the Original Class Principal Balance of the related Class, and
(b) as to the Class B-3I, Class P and Class R Certificates, the
percentage specified on the face of such Certificate.
The aggregate Percentage Interests for each Class of Certificates and the Class
R Certificate shall equal 100%, respectively.
"Permitted Transferee" means, in the case of a transfer of the Class R
Certificate, a Person that is not a Plan or a Disqualified Organization, except
as permitted by Sections 9.02(b)(2) and (3), respectively.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Pool Factor" means, at any time, the percentage derived from a
fraction, the numerator of which is the Aggregate Certificate Principal Balance
at such time and the denominator of which is the Original Aggregate Certificate
Principal Balance.
"Pool Scheduled Principal Balance" means, for any Payment Date, the sum
of the Group I Pool Scheduled Principal Balance and the Group II Pool Scheduled
Principal Balance.
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"Post-Funding Payment Date" means the Payment Date on, or the first
Payment Date after, the last day of the Pre-Funding Period.
"Pre-Funded Amount" means, with respect to any date of determination,
the sum of the Pre-Funded Group I Amount and the Pre-Funded Group II Amount.
"Pre-Funded Group I Amount" means, with respect to any date of
determination, the amount then on deposit in the Pre-Funding Group I Account,
after giving effect to any sale of Subsequent Loans to the Trust on such date.
"Pre-Funded Group II Amount" means, with respect to any date of
determination, the amount then on deposit in the Pre-Funding Group II Account,
after giving effect to any sale of Subsequent Loans to the Trust on such date.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.08.
"Pre-Funding Group I Account" means the subaccount of the Pre-Funding
Account so designated, established and maintained pursuant to Section 8.08.
"Pre-Funding Group II Account" means the subaccount of the Pre-Funding
Account so designated, established and maintained pursuant to Section 8.08.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of
(a) the date on which the amount on deposit in the Pre-Funding
Account is less than $10,000.00, or
(b) the close of business on August 14, 2002, or
(c) the date on which an Event of Termination occurs.
"Prepaid Loan" has the meaning assigned in Section 2.06.
"Prepayment Charges" means all prepayment premiums, penalties and
similar charges paid by any Obligor in connection with, and as a condition to,
prepayment in part or in full of a Loan.
"Principal Prepayment" means a payment or other recovery of principal
on a Loan (exclusive of Liquidation Proceeds) which is received in advance of
its scheduled due date and applied upon receipt (or, in the case of a partial
prepayment, upon the next scheduled payment date on such Loan) to reduce the
outstanding principal amount due on such Loan prior to the date or dates on
which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the
entire principal balance of a Loan.
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"Rating Agencies" means S&P and Xxxxx'x.
"Realized Loss Amount" means, as to any Payment Date, and
(a) the Group I Certificates, the excess, if any, of the Aggregate
Group I Certificate Principal Balance, less distributions in
respect of principal on the Group I Certificates on such
Payment Date, but prior to any reduction in Class Principal
Balances of Group I Certificates as a result of any Realized
Loss Amount for such Payment Date, over the Group I Pool
Scheduled Principal Balance with respect to such Payment Date;
and
(b) the Group II Certificates, the excess, if any, of the
Aggregate Group II Certificate Principal Balance, less
distributions in respect of principal on the Group II
Certificates on such Payment Date, but prior to any reduction
in Class Principal Balances of Group II Certificates as a
result of any Realized Loss Amount for such Payment Date, over
the Group II Pool Scheduled Principal Balance with respect to
such Payment Date.
"Realized Losses" means, for any Payment Date and the Group I Loans,
the Group II Loans and the Loans, respectively, the aggregate Net Liquidation
Losses for all such Loans that became Liquidated Loans during the related Due
Period.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date.
"Regular Certificates" means a Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-IO, Class MF-1, Class MF-2, Class BF-1, Class BF-2, Class
AV-1, Class AV-IO, Class MV-1, Class MV-2, Class BV-1, Class BV-2 or Class B-3I
Certificate.
"Related Proceeds" means, with respect to any Liquidation Expense paid
by the Servicer in connection with the servicing of a Loan, collections from the
related Obligor or in respect of Liquidation Proceeds or a Repurchase Price
recovered by the Servicer in respect of such Loan or any real estate securing
such Loan.
"Remaining Excess Cashflow" means, for any Payment Date, the sum of the
Group I Excess Cashflow and Group II Excess Cashflow, less amounts distributed
on that Payment Date under Sections 8.04(c) and 8.04(e).
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
"REMIC Provisions" means the provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and any temporary, proposed or final regulations promulgated
thereunder, as the foregoing may be in effect from time to time.
"REO" means Loans as to which the real estate collateral has been
foreclosed upon and is owned by the Trust.
1-48
"Replaced Loan" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Loan to be repurchased
pursuant to Section 3.06 or which becomes a Liquidated Loan, an amount equal to
(a) the remaining principal amount outstanding on such Loan
(without giving effect to any Advances paid by the Servicer or
the Trustee, as applicable, with respect to such Loan pursuant
to Section 8.02), plus
(b) interest at the weighted average pass-through rate on such
Loan from the end of the Due Period with respect to which the
Obligor last made a scheduled payment (without giving effect
to any Advances paid by the Servicer or the Trustee, as
applicable, with respect to such Loan pursuant to Section
8.02) through the date of such repurchase or liquidation, plus
(c) without duplication, the amount necessary to reimburse all
Advances in respect of such Loan on the date of repurchase.
"Required Overcollateralization Amount" means, for any Payment Date and
(a) the Group I Certificates,
(i) prior to the Group I Stepdown Date, an amount equal
to 3.00% of the Cut-off Date Group I Principal
Balance as of the Closing Date plus the Pre-Funded
Group I Amount, if any, on the Closing Date; and
(ii) on or after the Group I Stepdown Date, an amount
equal to 6.00% of the Group I Pool Scheduled
Principal Balance on such Payment Date, but in no
event (x) less than the Group I OC Floor in each
case, or (y) greater than the Group I Pool Scheduled
Principal Balance on such Payment Date.
(b) the Group II Certificates,
(i) prior to the Group II Stepdown Date, an amount equal
to 2.25% of the Cut-off Date Group II Principal
Balance as of the Closing Date plus the Pre-Funded
Group II Amount, if any, on the Closing Date; or
(ii) on or after the Group II Stepdown Date, an amount
equal to 4.50% of the Group II Pool Scheduled
Principal Balance on such Payment Date, but in no
event (x) less than the Group II OC Floor in each
case, or (y) greater than the Group II Pool Scheduled
Principal Balance on such Payment Date.
"Residual Interests" means the Class R-I, Class R-II and Class R-III
Interests, each one evidencing the sole class of "residual interests" in the
Subsidiary REMIC, Intermediate REMIC and Master REMIC, respectively, and
represented in the aggregate by the Class R Certificate.
1-49
"Responsible Officer" means, with respect to the Trustee, the chairman
and any vice chairman of the board of directors, the president, the chairman and
vice chairman of any executive committee of the board of directors, every vice
president, assistant vice president, the secretary, every assistant secretary,
cashier or any assistant cashier, controller or assistant controller, the
treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto; provided, that, if S&P no
longer has a rating outstanding on any Class of the Certificates, then
references herein to "S&P" shall be deemed to refer to the NRSRO then rating any
Class of the Certificates (or, if more than one such NRSRO is then rating any
Class of the Certificates, to such NRSRO as may be designated by the Originator
or the Trustee), and references herein to ratings by or requirements of S&P
shall be deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
"Scheduled Principal Balance" means, with respect to any Loan and any
Payment Date or Cut-off Date, the principal balance of such Loan as of the due
date in the Due Period immediately preceding such Payment Date or Cut-off Date,
as the case may be, as specified in the amortization schedule at the time
relating thereto (before any adjustment to such amortization schedule by reason
of any bankruptcy of an Obligor or similar proceeding or any moratorium or
similar waiver or grace period) after giving effect to any previous Partial
Principal Prepayments received during such Due Period and all prior Due Periods
and to the payment of principal due on such due date and irrespective of any
delinquency in payment by, or extension granted to, the related Obligor. If for
any Loan the Cut-off Date is the date of origination of the Loan, its Scheduled
Principal Balance as of the Cut-off Date is the principal balance of the Loan on
its date of origination. If for any Loan the Cut-off Date is the last day of a
Due Period, its Scheduled Principal Balance is the principal balance of the Loan
determined in accordance with the first sentence of this definition as of the
due date in the Due Period ending on the Cut-off Date.
"Senior Enhancement Percentage" means, for any Payment Date and
(a) the Group I Certificates or Group I Loans, a fraction,
expressed as a percentage, obtained by dividing:
(i) the excess of
(A) the Group I Pool Scheduled Principal Balance
on the prior Payment Date, over
(B) the Class AF Principal Balance by
(ii) the Group I Pool Scheduled Principal Balance on the
prior Payment Date; and
1-50
(b) the Group II Certificates or Group II Loans, a fraction,
expressed as a percentage, obtained by dividing:
(i) the excess of
(A) the Group II Pool Scheduled Principal
Balance on the prior Payment Date, over
(B) the Class AV-1 Principal Balance by
(ii) the Group II Pool Scheduled Principal Balance on the
prior Payment Date; and
(c) the Certificates or the Loans, a fraction, expressed as a
percentage, obtained by dividing:
(i) the excess of
(A) the Pool Scheduled Principal Balance on the
prior Payment Date, over
(B) the sum of the Class AF and Class AV-1
Principal Balance by
(ii) the Pool Scheduled Principal Balance on the prior
Payment Date.
"Service Transfer" has the meaning assigned in Section 7.02.
"Service Transfer Date" has the meaning assigned in Section 7.02.
"Service Transfer Notice" has the meaning assigned in Section 7.02.
"Service Transfer Notice Date" has the meaning assigned in Section
7.02.
"Servicer" means the Originator until any Service Transfer hereunder
and thereafter means the new servicer appointed pursuant to Article VII.
"Servicer Expense Advance" has the meaning assigned in Section 5.11(f).
"Servicer Termination Cumulative Loss Test" means, to be considered
"satisfied" for any Payment Date, that the Cumulative Realized Loss Ratio for
the Loans for such Payment Date is less than or equal to the percentage set
forth below for the specified period:
Month Percentage
----- ----------
37-48 7.25%
49-60 8.25%
61-72 8.75%
73 and thereafter 9.00%
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"Servicer Termination Delinquency Test" means, to be considered
"satisfied" for any Payment Date, that the three month rolling average of the
Loans that are 60 days or more delinquent as of such Payment Date (including
REO) does not exceed 42.25% of the related Senior Enhancement Percentage.
"Servicer's Assignee" has the meaning assigned in Section 5.11(a) and
Section 5.11(f), as applicable.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Loans whose name appears on
a list of servicing officers appearing in an Officer's Certificate furnished to
the Trustee by the Servicer, as the same may be amended from time to time.
"Simple Interest Excess" means, as of any Determination Date for each
Simple Interest Qualifying Loan, the excess, if any, of (i) the portion of the
scheduled payment received from the Obligor for such Loan allocable to interest
with respect to the related Due Period, over (ii) 30 days' interest on the
principal balance of such Loan at the Loan Interest Rate.
"Simple Interest Excess Sub-Account" means a sub-account of the
collection account established and maintained by the Servicer.
"Simple Interest Qualifying Loan" means, as of any Determination Date,
any simple interest mortgage loan that was neither prepaid in full during the
related Due Period, nor delinquent with respect to a payment that became due
during the related Due Period as of the close of business on the Determination
Date following such Due Period.
"Simple Interest Shortfall" means as of any Determination Date for each
Simple Interest Qualifying Loan, the excess, if any, of (i) 30 days' interest on
the principal balance of such Loan at the Loan Interest Rate, over (ii) the
portion of the scheduled payment received from the Obligor for such Loan
Interest allocable to interest with respect to the related Due Period.
"Sixty-Day Delinquency Ratio" means, for any Payment Date and
(a) the Group I Loans, a fraction, expressed as a percentage, the
numerator of which is the aggregate of the outstanding
balances of all Group I Loans that were delinquent 60 days or
more as of the end of the related Due Period (including such
Loans in foreclosure, as to which the Obligor is in bankruptcy
proceedings, or which are REO), and the denominator of which
is the Group I Pool Scheduled Principal Balance for such
Payment Date.
(b) the Group II Loans, a fraction, expressed as a percentage, the
numerator of which is the aggregate of the outstanding
balances of all Group II Loans that were delinquent 60 days or
more as of the end of the related Due Period (including such
Loans in foreclosure, as to which the Obligor is in bankruptcy
proceedings,
1-52
or which are REO), and the denominator of which is the Group
II Pool Scheduled Principal Balance for such Payment Date.
"SPV" has the meaning assigned in Section 5.11(a).
"Stepdown Date" means
(a) with respect to the Group I Certificates, the earlier of (a)
the later of (i) the Payment Date in August 2005 and (ii) the
first Payment Date on which the Class AF Principal Balance is
less than or equal to 52.00% of the Group I Pool Scheduled
Principal Balance on such Payment Date and (b) the Payment
Date on which the Class AF Principal Balance has been reduced
to zero.
(b) with respect to the Group II Certificates, the earlier of (a)
the later of (i) the Payment Date in August 2005 and (ii) the
first Payment Date on which the Class AV Principal Balance is
less than or equal to 54.00% of the Group II Pool Scheduled
Principal Balance on such Payment Date and (b) the Payment
Date on which the Class AV Principal Balance has been reduced
to zero.
"Subsequent Cut-off Date" means, with respect to a Subsequent Loan, the
last day of the month in which the Subsequent Transfer Date occurs or the last
day of the preceding month, as specified by the Seller in the related loan
schedule.
"Subsequent Loan" means a Group I or Group II Loan, as applicable, sold
by the Seller to the Trust pursuant to Section 2.03, such Loan being identified
as such in the Subsequent Transfer Instrument.
"Subsequent Transfer Date" means, with respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Loans are sold to
the Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument dated as of a Subsequent Transfer Date executed by the Seller
substantially in the form of Exhibit O, by which the Seller sells Subsequent
Loans to the Trust.
"Subsidiary Interest Adjusted Principal Balance" means, as to any
Payment Date and each Class of Uncertificated Subsidiary Interests, the
Subsidiary Interest Principal Balance of such Class less its allocable share of
the amount, if any, as of the preceding Payment Date, by which (a) the aggregate
Subsidiary Interest Principal Balance of the Class S-1F and Class S-2F Interests
exceeded the sum of the Group I Pool Scheduled Principal Balance plus the
Pre-Funded Group I Amount, such excess to be allocated in accordance with the
priorities described in Section 8.07(d)(iii) and (b) the aggregate Subsidiary
Interest Principal Balance of the Class S-1V and Class S-2V Interests exceeded
the sum of the Group II Pool Scheduled Principal Balance plus the Pre-Funded
Group II Amount, such excess to be allocated in accordance with the priorities
described in Section 8.07(e)(iii).
"Subsidiary Interest Principal Balance" means, as to any Payment Date
and each Class of Uncertificated Subsidiary Interests, the Original Principal
Balance of such Class less all amounts
1-53
distributed on prior Payment Dates under Section 8.07(b) in
respect of such Class on account of principal.
"Subsidiary REMIC" means the segregated pool of assets consisting of
the following, as to which a separate REMIC election is to be made:
(a) all the rights, benefits and obligations arising from and in
connection with the Loans, including without limitation all
related mortgages, deeds of trust and security deeds and any
and all rights to receive payments on or with respect to the
Loans due after the applicable Cut-off Date, excluding the
Contributed Cash,
(b) all rights under any hazard, flood or other individual
insurance policy on the real estate securing a Loan for the
benefit of the creditor of such Loan,
(c) all rights of the Seller under the Transfer Agreement and any
Subsequent Transfer Agreement (as defined in the Transfer
Agreement),
(d) all rights the Originator may have against the originating
lender with respect to Loans originated by a lender other than
the Originator,
(e) all rights under the Errors and Omissions Protection Policy
and the Fidelity Bond as such policy and bond relate to the
Loans,
(f) all rights under any title insurance policies, if applicable,
on any of the properties securing Loans,
(g) all documents contained in the Loan Files,
(h) amounts in the Certificate Account, including all proceeds of
investments, and
(i) all proceeds and products of the foregoing.
"Transfer Agreement" means that Transfer Agreement between Conseco
Finance Securitizations Corp., as purchaser, and Conseco Finance Corp., as
seller, dated as of July 1, 2002.
"Trust" means Conseco Finance Home Equity Loan Trust 2002-C.
"Trust Fund" means the corpus of the Trust created by this Agreement
which consists of
(a) all the rights, benefits and obligations arising from and in
connection with the Loans, including without limitation all
related mortgages, deeds of trust and security deeds and any
and all rights to receive payments on or with respect to the
Loans due after the applicable Cut-off Date,
(b) all rights under any hazard, flood or other individual
insurance policy on the real estate securing a Loan for the
benefit of the creditor of such Loan,
1-54
(c) all rights of the Seller under the Transfer Agreement and any
Subsequent Transfer Agreement (as defined in the Transfer
Agreement),
(d) all rights the Originator may have against the originating
lender with respect to Loans originated by a lender other than
the Originator,
(e) all rights under the Errors and Omissions Protection Policy
and the Fidelity Bond as such policy and bond relate to the
Loans,
(f) all rights under any title insurance policies, if applicable,
on any of the properties securing Loans,
(g) all documents contained in the Loan Files,
(h) all rights under the Yield Maintenance Agreement,
(i) amounts in the Certificate Account, the Capitalized Interest
Account, the Pre-Funding Account, the Basis Risk Reserve Fund,
and the Yield Maintenance Reserve Fund (including all proceeds
of investments of funds in the Certificate Account), and
(j) all proceeds and products of the foregoing.
"Trustee Advance" has the meaning assigned in Section 11.15.
"Trustee Fee" means the fees payable to the Trustee under its agreement
with Conseco Finance Corp. dated November 8, 1995, including its reasonable and
customary fees as custodian, and the reasonable and customary fees of any
Custodian appointed by the Trustee, including those payable under the contract
dated August 15, 1997 between Conseco Finance Corp. and Xxxxx Fargo Bank
Minnesota, National Association, but in all cases only if and to the extent such
fees are not paid by Conseco Finance Corp. as and when due under such
agreements, which nonpayment continues for 30 days; and the reasonable and
customary fees of any successor Trustee.
"Uncertificated Intermediate Group I Interests" means the Class I-AF-1,
Class I-AF-2, Class I-AF-3, Class I-AF-4, Class I-AF-IO(1), Class I-AF-IO(2),
Class I-AF-IO(3), Class I-AF-IO(4), Class I-AF-IO(5), Class I-AF-IO(6), Class
I-AF-IO(7), Class I-AF-IO(8), Class I-AF-IO(9), Class I-AF-IO(10), Class I-AF-IO
(11), Class I-AF-IO (12), Class I-AF-IO(13), Class I-MF-1, Class I-MF-2, Class
I-BF-1, Class I-BF-2, and Class I-F Accrual Interests, collectively.
"Uncertificated Intermediate Group II Interests" means the Class
I-AV-1, Class I-AV-IO(1), Class I-AV-IO(2), Class I-AV-IO(3), Class I-AV-IO(4),
Class I-AV-IO(5), Class I-AV-IO(6), Class I-AV-IO(7), Class I-AV-IO(8), Class
I-AV-IO(9), Class I-AV-IO(10), Class I-AV-IO (11), Class I-AV-IO (12), Class
I-AV-IO(13), Class I-MV-1, Class I-MV-2, Class I-BV-1, Class I-BV-2 and Class
I-V Accrual Interests, collectively.
1-55
"Uncertificated Intermediate Interests" means the uncertificated
Intermediate Group I and Group II Interests, collectively.
"Uncertificated Subsidiary Interests" means the Class S-1F, Class S-2F,
Class S-1V and Class S-2V Interests, collectively.
"Underwriters" means Xxxxxx Brother Inc., Credit Suisse First Boston
Corporation, Deutsche Bank Securities Inc., and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related
Terms Agreement, each dated July 2, 2002, among the Originator, the Seller and
the Underwriters.
"Unpaid Class AF Basis Risk Carryover Shortfall" means, as to any
Payment Date, the sum of the Unpaid Class AF-1, Class AF-2, Class AF-3 and Class
AF-4 Basis Risk Carryover Shortfalls.
"Unpaid Class AF Interest Carry Forward Amount" means, as to any
Payment Date and each Class of Class AF Certificates, the excess of
(a) the aggregate amount of all Class AF Interest Carry Forward
Amounts in respect of such Class, over
(b) the sum of all payments in reduction of the Unpaid Class AF
Interest Carry Forward Amount of such Class on all previous
Payment Dates pursuant to Section 8.04(c)(ii),
plus interest (to the extent payment thereof is legally permissible) at the
related Pass-Through Rate for such Payment Date on the Unpaid Class AF Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(c)(ii)), accrued during the related Accrual Period.
"Unpaid Class AF-1 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AF-1 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class AF-1
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class AF-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class AF-1 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
"Unpaid Class AF-2 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
1-56
(a) the aggregate amount of all Class AF-2 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class AF-2
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class AF-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class AF-2 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
"Unpaid Class AF-3 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AF-3 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class AF-3
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class AF-3 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class AF-3 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
"Unpaid Class AF-4 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AF-4 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class AF-4
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class AF-4 Interest Rate for such Payment Date (calculated without giving effect
to the Group I Net WAC Cap Rate) on the Unpaid Class AF-4 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Section
8.10), accrued during the related Accrual Period.
"Unpaid Class AF-IO Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AF-IO Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of the Unpaid Class AF-IO
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(c)(ii),
1-57
plus interest (to the extent payment thereof is legally permissible) at the
Class AF-IO Interest Rate for such Payment Date on the Unpaid Class AF-IO
Interest Carry Forward Amount for the immediately preceding Payment Date (after
giving effect to any payment made in reduction thereof on such Payment Date
pursuant to Section 8.04(c)(ii)), accrued during the related Accrual Period.
"Unpaid Class AV Basis Risk Carryover Shortfall" means, as to any
Payment Date, the Unpaid Class AV-1 Basis Risk Carryover Shortfall.
"Unpaid Class AV Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AV Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of the Unpaid Class AV
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(e)(ii),
plus interest (to the extent payment thereof is legally permissible) at the
Class AV Interest Rate for such Payment Date on the Unpaid Class AV Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(ii)), accrued during the related Accrual Period.
"Unpaid Class AV-1 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AV-1 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class AV-1
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class AV-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group II Net WAC Cap Rate) on the Unpaid Class AV-1 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
"Unpaid Class AV-IO Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class AV-IO Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class AV-IO
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(e)(ii),
plus interest (to the extent payment thereof is legally permissible) at the
Class AV-IO Interest Rate for such Payment Date on the Unpaid Class AV-IO
Interest Carry Forward Amount for the immediately preceding Payment Date (after
giving effect to any payment made in reduction
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thereof on such Payment Date pursuant to Section 8.04(e)(ii)), accrued during
the related Accrual Period.
"Unpaid Class BF-1 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BF-1 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class BF-1
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class BF-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class BF-1 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
"Unpaid Class BF-1 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BF-1 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class BF-1
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(c)(vii),
plus interest (to the extent payment thereof is legally permissible) at the
Class BF-1 Interest Rate for such Payment Date on the Unpaid Class BF-1 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(c)(vii)), accrued during the related Accrual Period.
"Unpaid Class BF-1 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class BF-1 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BF-1 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(c)(viii).
"Unpaid Class BF-1 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class BF-1 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BF-1 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(c)(viii).
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"Unpaid Class BF-2 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BF-2 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class BF-2
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Section 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class BF-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class BF-2 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
"Unpaid Class BF-2 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BF-2 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class BF-2
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(c)(ix),
plus interest (to the extent payment thereof is legally permissible) at the
Class BF-2 Interest Rate for such Payment Date on the Unpaid Class BF-2 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(c)(ix)), accrued during the related Accrual Period.
"Unpaid Class BF-2 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class BF-2 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BF-2 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(c)(x).
"Unpaid Class BF-2 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class BF-2 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BF-2 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(c)(x).
"Unpaid Class BV-1 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BV-1 Basis Risk Carryover
Shortfalls, over
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(b) the sum of all payments in reduction of Unpaid Class BV-1
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Sections 8.09 and 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class BV-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group II Net WAC Cap Rate) on the Unpaid Class BV-1 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Sections 8.09 and 8.10), accrued during the related Accrual Period.
"Unpaid Class BV-1 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BV-1 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class BV-1
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(e)(vii),
plus interest (to the extent payment thereof is legally permissible) at the
Class BV-1 Interest Rate for such Payment Date on the Unpaid Class BV-1 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(vii)), accrued during the related Accrual Period.
"Unpaid Class BV-1 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class BV-1 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BV-1 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(e)(viii).
"Unpaid Class BV-1 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class BV-1 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BV-1 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(e)(viii).
"Unpaid Class BV-2 Basis Risk Carryover Shortfall" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BV-2 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Unpaid Class BV-2
Basis Risk Carryover Shortfalls on all previous Payment Dates
pursuant to Sections 8.09 and 8.10,
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plus interest (to the extent payment thereof is legally permissible) at the
Class BV-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group II Net WAC Cap Rate) on the Unpaid Class BV-2 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Sections 8.09 and 8.10), accrued during the related Accrual Period.
"Unpaid Class BV-2 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class BV-2 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class BV-2
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(e)(ix),
plus interest (to the extent payment thereof is legally permissible) at the
Class BV-2 Interest Rate for such Payment Date on the Unpaid Class BV-2 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(ix)), accrued during the related Accrual Period.
"Unpaid Class BV-2 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class BV-2 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BV-2 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(e)(x).
"Unpaid Class BV-2 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class BV-2 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class BV-2 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(e)(x).
"Unpaid Class MF-1 Basis Risk Carryover Shortfall" means, with respect
to the Class MF-1 Certificates and as to any Payment Date, the excess of
(a) the aggregate amount of all Class MF-1 Basis Risk Carryover
Shortfalls over
(b) the sum of all payments in reduction of Class MF-1 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Section 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class MF-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class MF-1 Basis Risk
Carryover Shortfall for the immediately preceding
1-62
Payment Date (after giving effect to any payment made in reduction thereof on
such Payment Date pursuant to Section 8.10), accrued during the related Accrual
Period.
"Unpaid Class MF-1 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class MF-1 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class MF-1
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(c)(iii),
plus interest (to the extent payment thereof is legally permissible) at the
Class MF-1 Interest Rate for such Payment Date on the Unpaid Class MF-1 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(c)(iii)), accrued during the related Accrual Period.
"Unpaid Class MF-1 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class MF-1 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MF-1 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(c)(iv).
"Unpaid Class MF-1 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class MF-1 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MF-1 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(c)(iv).
"Unpaid Class MF-2 Basis Risk Carryover Shortfall" means, with respect
to the Class MF-2 Certificates and as to any Payment Date, the excess of
(a) the aggregate amount of all Class MF-2 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Class MF-2 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Section 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class MF-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group I Net WAC Cap Rate) on the Unpaid Class MF-2 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment in reduction thereof on such Payment Date pursuant to
Section 8.10), accrued during the related Accrual Period.
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"Unpaid Class MF-2 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class MF-2 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class MF-2
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(c)(v),
plus interest (to the extent payment thereof is legally permissible) at the
Class MF-2 Interest Rate for such Payment Date on the Unpaid Class MF-2 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment in reduction thereof on such Payment Date pursuant to
Section 8.04(c)(v)), accrued during the related Accrual Period.
"Unpaid Class MF-2 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class MF-2 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MF-2 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(c)(vi).
"Unpaid Class MF-2 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class MF-2 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MF-2 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(c)(vi).
"Unpaid Class MV-1 Basis Risk Carryover Shortfall" means, with respect
to the Class MV-1 Certificates and as to any Payment Date, the excess of
(a) the aggregate amount of all Class MV-1 Basis Risk Carryover
Shortfalls over
(b) the sum of all payments in reduction of Class MV-1 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Sections 8.09 and 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class MV-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group II Net WAC Cap Rate) on the Unpaid Class MV-1 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Sections 8.09 and 8.10), accrued during the related Accrual Period.
"Unpaid Class MV-1 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class MV-1 Interest Carry Forward
Amounts, over
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(b) the sum of all payments in reduction of Unpaid Class MV-1
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(e)(iii),
plus interest (to the extent payment thereof is legally permissible) at the
Class MV-1 Interest Rate for such Payment Date on the Unpaid Class MV-1 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(iii)), accrued during the related Accrual Period.
"Unpaid Class MV-1 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class MV-1 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MV-1 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(e)(iv).
"Unpaid Class MV-1 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class MV-1 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MV-1 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(e)(iv).
"Unpaid Class MV-2 Basis Risk Carryover Shortfall" means, with respect
to the Class MV-2 Certificates and as to any Payment Date, the excess of
(a) the aggregate amount of all Class MV-2 Basis Risk Carryover
Shortfalls, over
(b) the sum of all payments in reduction of Class MV-2 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Sections 8.09 and 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class MV-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Group II Net WAC Cap Rate) on the Unpaid Class MV-2 Basis Risk
Carryover Shortfall for the immediately preceding Payment Date (after giving
effect to any payment in reduction thereof on such Payment Date pursuant to
Sections 8.09 and 8.10), accrued during the related Accrual Period.
"Unpaid Class MV-2 Interest Carry Forward Amount" means, as to any
Payment Date, the excess of
(a) the aggregate amount of all Class MV-2 Interest Carry Forward
Amounts, over
(b) the sum of all payments in reduction of Unpaid Class MV-2
Interest Carry Forward Amount on all previous Payment Dates
pursuant to Section 8.04(e)(v),
1-65
plus interest (to the extent payment thereof is legally permissible) at the
Class MV-2 Interest Rate for such Payment Date on the Unpaid Class MV-2 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(v)), accrued during the related Accrual Period.
"Unpaid Class MV-2 Realized Loss Amount" means, with respect to any
Payment Date,
(a) the sum of all Class MV-2 Allocated Realized Loss Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MV-2 Realized Loss Amount on all previous Payment Dates
pursuant to Section 8.04(e)(vi).
"Unpaid Class MV-2 Realized Loss Interest Amount" means, with respect
to any Payment Date,
(a) the sum of all Class MV-2 Allocated Realized Loss Interest
Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid
Class MV-2 Realized Loss Interest Amount on all previous
Payment Dates pursuant to Section 8.04(e)(vi).
"Unpaid Intermediate Interest Shortfall" means, with respect to each
Class of Uncertificated Intermediate Interests and any Payment Date, the amount,
if any, by which the amount distributed on such Class on such Payment Date
pursuant to Section 8.07(a)(i) or 8.07(b)(i), as applicable, less than the
amount specified in such Section.
"Unpaid Subsidiary Interest Shortfall" means, with respect to each
Class of Uncertificated Subsidiary Interests and any Payment Date, the amount,
if any, by which the amount distributed on such Class on such Payment Date
pursuant to Section 8.07(d)(ii) or Section 8.07 (e)(ii), as applicable, is less
than the amount specified in such Section.
"Weighted Average Debt Consolidation Percentage" means the weighted
average, by Scheduled Principal Balance, of Loans the proceeds of which were
used by the related Obligors for the purpose of debt consolidation.
"Weighted Average Loan Rate" means, for any Payment Date and the Loans,
the Group I Loans or the Group II Loans, as applicable, the weighted average
(determined by Scheduled Principal Balance as of the preceding Payment Date, or,
if no preceding Payment Date, the Closing Date) of the Loan Interest Rates for
all such Loans that were outstanding during the immediately preceding month.
"Weighted Average Pass-Through Rate" means, for any Payment Date and:
(a) the Group I Certificates, the sum of the weighted average
(expressed as a percentage and rounded to four decimal places)
of the Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class
AF-IO, Class MF-1, Class MF-2, Class BF-1 and Class BF-2
Pass-Through Rates, weighted on the basis of the respective
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-IO,
Class MF-1, Class
1-66
MF-2, Class BF-1 and Class BF-2 Principal Balances or Notional
Amount, as applicable, for such Payment Date; and
(b) the Group II Certificates, the sum of the weighted average
(expressed as a percentage and rounded to four decimal places )
of the Class AV-1, Class AV-IO, Class MV-1, Class MV-2, Class
BV-1 and Class BV-2 Pass-Through Rates, weighted on the basis
of the respective Class AV-1, Class AV-IO, Class MV-1, Class
MV-2, Class BV-1 and Class BV-2 Principal Balances or Notional
Amount, as applicable, for such Payment Date.
"Yield Maintenance Agreement" means the Yield Maintenance Agreement,
effective as of July 3, 2002, between the Trust and the LIBOR Cap Counterparty,
relating to the Class AV-1, Class MV-1, Class MV-2, Class BV-1 and Class BV-2
Certificates.
"Yield Maintenance Reserve Fund" means the trust account created and
maintained pursuant to Section 8.09 in the name of the Trust in an Eligible
Institution.
SECTION 1.03 Calculations. Except as otherwise provided in this
Agreement,
(a) interest payable on the Class AF-2, Class AF-3, Class AF-4,
Class AF-IO, Class MF-1, Class MF-2, Class BF-1, Class BF-2
and Class AV-IO Certificates for each Accrual Period shall be
calculated on the basis of a 360-day year comprised of twelve
30-day months, and
(b) interest payable on the Class AF-1, Class AV-1, Class MV-1,
Class MV-2, Class BV-1 and Class BV-2 Certificates for each
Accrual Period shall be calculated on the basis of actual days
in a 360-day years.
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ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF LOANS
SECTION 2.01 Closing.
(a) There is hereby created, by the Seller as settlor, a separate trust
which shall be known as Conseco Finance Home Equity Loan Trust 2002-C. The Trust
shall be administered pursuant to the provisions of this Agreement for the
benefit of the Certificateholders and the Class R Certificateholder.
(b) The Seller hereby transfers, assigns, sets over and otherwise
conveys to the Trustee on behalf of the Trust, by execution and delivery of an
assignment substantially in the form of Exhibit D hereto, all the right, title
and interest of the Seller in and to the Initial Loans and Additional Loans,
including all rights to receive payments on or with respect to the Initial Loans
and Additional Loans due after the applicable Cut-off Date, all rights of the
Seller under the Transfer Agreement and all other assets now or hereafter
included in the Trust Fund. Each such transfer and assignment is intended by the
Seller to be a sale of such assets for all purposes, including, without
limitation, the Federal Bankruptcy Code, to the end that all such assets will
hereafter cease to be the property of the Seller and would not be includable in
the estate of the Seller or the Originator for purposes of Section 541 of the
Federal Bankruptcy Code.
(c) Although the parties intend that each conveyance pursuant to this
Agreement of the Seller's right, title and interest in and to the Loans
(including the Subsequent Loans) shall constitute a purchase and sale and not a
loan, if such conveyances are deemed to be loans, the parties intend that the
rights and obligations of the parties to such loans shall be established
pursuant to the terms of this Agreement. If the conveyances are deemed to be
loans, the parties further intend and agree that the Originator and the Seller
shall be deemed to have granted to the Trustee and the Originator and the Seller
do hereby grant to the Trustee, a perfected first-priority security interest in
the Trust Fund and that this Agreement shall constitute a security agreement
under applicable law. If the trust created by this Agreement terminates prior to
the satisfaction of the claims of any Person under any Certificate or Class R
Certificate, the security interest created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
SECTION 2.02 Conditions to the Closing. On or before the Closing Date,
the Seller shall deliver or cause to be delivered the following documents to the
Trustee:
(a) The List of Loans attached to this Agreement as Exhibits L-1 and
L-2, certified by the Chairman of the Board, President or any Vice President of
the Seller.
(b) A certificate of an officer of the Originator substantially in the
form of Exhibit E hereto on behalf of the Seller and the Originator.
(c) An Opinion of Counsel for the Seller substantially in the form of
Exhibit F hereto.
2-1
(d) A letter, acceptable to the Underwriters, from
PricewaterhouseCoopers LLP or another nationally recognized accounting firm,
stating that such firm has reviewed the Initial Loans on a statistical sampling
basis and setting forth the results of such review.
(e) 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 and the transactions
contemplated hereunder, certified in each case by the secretary or an assistant
secretary of the Seller.
(f) Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota and of the
Originator under the laws of the State of Delaware.
(g) An Officer's Certificate listing the Servicer's Servicing Officers.
(h) Officer's Certificate relating to coverage of the Servicer under
the Errors and Omissions Protection Policy.
(i) Evidence of deposit in the Certificate Account of all funds
received with respect to the Loans from the Cut-off Date to the Closing Date,
other than principal due on or before the Cut-off Date, together with an
Officer's Certificate to the effect that such amount is correct.
(j) The Loan Files for the Initial Loans and Additional Loans and an
Officer's Certificate confirming that the Originator has reviewed the original
or a copy of each related promissory note and each related Loan File, that each
such Loan and Loan File conforms in all material respects with the List of Loans
and that each such Loan File is complete in accordance with the definition
thereof and has been delivered to the Trustee (or its custodian).
(k) An executed copy of the Transfer Agreement.
(l) Evidence of the deposit of $43,808,665 in the Pre-Funding Group I
Account and of $31,962,084 in the Pre-Funding Group II Account.
(m) Evidence of the deposit of $173,994 in the Capitalized Interest
Account ($113,739 for the Group I Certificates and $59,354 for the Group II
Certificates).
(n) Letters from each of the Rating Agencies evidencing the following
ratings for the Certificates:
Class S&P Rating Xxxxx'x Rating
------------------------------- --------------------- ---------------------
AF-1 AAA Aaa
AF-2 AAA Aaa
AF-3 AAA Aaa
AF-4 AAA Aaa
AF-IO AAA Aaa
MF-1 AA Aa2
2-2
MF-2 A A2
BF-1 BBB Baa2
BF-2 BB Ba2
AV-1 AAA Aaa
AV-IO AAA Aaa
MV-1 AA Aa2
MV-2 A A2
BV-1 BBB Baa2
(o) Evidence of the deposit of $5,000 in the Basis Risk Reserve Fund
($2500 in each of the Group I Subaccount and Group II Subaccount).
(p) An executed copy of the Yield Maintenance Agreement.
SECTION 2.03 Conveyance of the Subsequent Loans.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Loans identified on the List of Loans
attached to the Subsequent Transfer Instrument, including all rights to receive
payments on or with respect to the Subsequent Loans due after the related
Subsequent Cut-off Date, and all items with respect to such Subsequent Loans in
the related Loan Files. The transfer to the Trustee by the Seller of the
Subsequent Loans shall be absolute and is intended by the Seller, the Trustee,
the Certificateholders and the Class R Certificateholder to constitute and to be
treated as a sale of the Subsequent Loans by the Seller or the Originator to the
Trust. Such transfer and assignment is intended by the Seller to be a sale of
such assets for all purposes, including, without limitation, the Federal
Bankruptcy Code, to the end that all such assets will hereafter cease to be the
property of the Seller and would not be includable in the estate of the Seller
for purposes of Section 541 of the Federal Bankruptcy Code.
The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Loans. The purchase price of Subsequent Loans shall be paid solely with amounts
in the Pre-Funding Account. This Agreement shall constitute a fixed price
contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.
(b) The Seller shall transfer to the Trustee the Subsequent Loans, and
the Trustee shall release funds from the Pre-Funding Group I Account or the
Pre-Funding Group II Account, as applicable, only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:
2-3
(i) the Seller shall have provided the Trustee with an
Addition Notice at least five Business Days prior to
the Subsequent Transfer Date and shall have provided
any information reasonably requested by the Trustee
with respect to the Subsequent Loans;
(ii) the Seller shall have delivered the related Loan File
for each Subsequent Loan to the Trustee at least two
Business Days prior to the Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument substantially
in the form of Exhibit O, which shall include a List
of Loans identifying the related Subsequent Loans and
shall specify a Subsequent Cut-off Date of no later
than July 31, 2002;
(iv) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the
Seller shall not be insolvent nor shall it have been
made insolvent by such transfer nor shall it be aware
of any pending insolvency;
(v) such sale and transfer shall not result in a material
adverse tax consequence to the Trust (including the
Master REMIC, Intermediate REMIC, or Subsidiary
REMIC) or the Certificateholders or Class R
Certificateholder;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an
Officer's Certificate, substantially in the form
attached hereto as Exhibit P, and a copy of an
executed Subsequent Transfer Agreement, in the form
of Exhibit A to the Transfer Agreement, between the
Originator, as seller, and the Seller, as buyer,
dated as of the Subsequent Transfer Date, and all
conditions precedent described in Section 6 of the
Subsequent Transfer Agreement shall have been
satisfied;
(viii) the Seller and the Originator shall have delivered to
the Trustee Opinions of Counsel addressed to S&P,
Xxxxx'x and the Trustee with respect to the transfer
of the Subsequent Loans substantially in the form of
the Opinions of Counsel delivered to the Trustee on
the Closing Date regarding certain bankruptcy,
corporate and tax matters; and
(ix) no Subsequent Loan will have a Combined LTV greater
than 100%.
(c) On or before the last day of the Pre-Funding Period, the Seller
shall deliver to the Trustee:
(i) A letter from PricewaterhouseCoopers LLC or another
nationally recognized accounting firm retained by the
Seller (with copies provided to S&P, Xxxxx'x, the
Underwriters and the Trustee) that is in form,
2-4
substance and methodology the same as that delivered
under Section 2.02(d) of this Agreement, except that
it shall address the Subsequent Loans and their
conformity in all material respects to the
characteristics described in Sections 2.03(b)(ix) and
3.04(b) of this Agreement.
(ii) Evidence that, as a result of the purchase by the
Trust of the Subsequent Loans, none of the ratings
assigned to the Certificates as of the Closing Date
by S&P or Xxxxx'x will be reduced, withdrawn or
qualified.
(iii) Evidence that the aggregate Cut-off Date Principal
Balances of the Subsequent Loans, not specifically
identified as Subsequent Loans as of the Closing
Date, do not exceed 25% of the Original Aggregate
Certificate Principal Balance.
SECTION 2.04 Acceptance by Trustee.
(a) On the Closing Date and each Subsequent Transfer Date, if the
conditions set forth in Section 2.02 and 2.03, respectively, have been
satisfied, the Trustee shall deliver a certificate to the Seller substantially
in the form of Exhibit G hereto (an "Acknowledgment") acknowledging conveyance
of the Loans identified on the applicable List of Loans and the related Loan
Files to the Trustee and declaring that the Trustee, directly or through a
Custodian, will hold all Loans that have been delivered in trust, upon the
trusts herein set forth, for the use and benefit of all Certificateholders and
the Class R Certificateholder.
(b) The Trustee or a Custodian shall review each Loan File, as
described in Exhibit G, within 60 days of the Closing Date or later receipt by
it of the Loan File. If, in its review of the Loan Files, as described in
Exhibit G, the Trustee or a Custodian discovers a breach of the representations
or warranties set forth in Sections 2.03, 3.02, 3.03, 3.04 or 3.05 of this
Agreement, or in the Officer's Certificates delivered pursuant to Section
2.02(j) or 2.03(b)(vii) of this Agreement, the Trustee or Custodian, as the case
may be, shall notify the Seller and the Originator shall cure such breach or
repurchase or replace such Loan pursuant to Section 3.06.
SECTION 2.05 REMIC Provisions.
(a) The Originator, as Servicer, and each holder of the Class R-I
Interest, the Class R-II Interest and the Class R-III Interest, by acceptance
thereof, each agree that, in accordance with the requirements of Section
860D(b)(1) of the Code, the federal tax return of the Subsidiary REMIC, the
Intermediate REMIC and the Master REMIC for its first taxable year shall provide
an election for the Subsidiary REMIC, the Intermediate REMIC or the Master
REMIC, as the case may be (excluding the Pre-Funding Account and the Basis Risk
Reserve Fund), to be treated as a REMIC under the Code for such taxable year and
all subsequent taxable years, and the Trustee shall sign such return. In
furtherance of the foregoing, the Trustee (at the direction of the Originator,
the Seller or the Servicer), the Originator, the Seller and the Servicer shall
take, or refrain from taking, all such action as is necessary to maintain the
status of the Subsidiary REMIC, the Intermediate REMIC and the Master REMIC as a
REMIC under the
2-5
REMIC Provisions of the Code, including, but not limited to, the taking of such
action as is necessary to cure any inadvertent termination of REMIC status.
2-6
(b) The Regular Certificates are being issued in sixteen classes and
are hereby designated by the Seller as the "regular interests" in the Master
REMIC for the purposes of Section 860G(a)(1) of the Code. The following terms of
the Regular Certificates are irrevocably established as of the Closing Date:
Original Class
Principal Balance
Interest Rate Xxx Xxxxx (or Notional Assumed Final
Class (Pass-Through Rate) Amount) Maturity Date(1)
----------------------- ------------------------------------------ ----------------------- --------------------
Class AF-1 A floating rate equal to the least of
one month LIBOR plus .20% per year, the
Adjusted Group I Net WAC Cap Rate,
and 15.00% per year $ 107,938,000 August 15, 2033
Class AF-2 The lesser of 3.827% per year or the
Adjusted Group I Net WAC Cap Rate $ 15,125,000 August 15, 2033
Class AF-3 The lesser of 4.580% per year of the
Adjusted Group I Net WAC Cap Rate $ 52,937,000 August 15, 2033
Class AF-4 The lesser of 5.972% per year or the
Adjusted Group I Net WAC Cap Rate $ 41,250,000 August 15, 2033
Class AF-IO The lesser of 7.50% per year or the
Group I Net WAC Cap Rate (2) $ 123,750,000 August 15, 2033
Class MF-1 The lesser of 6.158% per year of the
Adjusted Group I Net WAC Cap Rate $ 19,938,000 August 15, 2033
Class MF-2 The lesser of 6.981% per year of the
Adjusted Group I Net WAC Cap Rate $ 17,187,000 August 15, 2033
Class BF-1 The lesser of 8.00% per year of the
Adjusted Group I Net WAC Cap Rate $ 13,063,000 August 15, 2033
Class BF-2 The lesser of 8.00% per year or the
Adjusted Group I Net WAC Cap Rate $ 7,562,000 August 15, 2033
Class AV-1 A floating rate equal to the least of
one month LIBOR plus .45% per year,
the Adjusted Group II Net WAC Cap, and
15.00% per year $ 158,500,000 August 15, 2033
Class AV-IO The lesser of 7.50% per year or the
Group II Net WAC Cap Rate (3) $ 89,600,000 August 15, 2033
Class MV-1 A floating rate equal to the least of
one month LIBOR plus 1.50% per year,
the Adjusted Group II Net WAC Cap, and
15.00% per year $ 14,500,000 August 15, 2033
Class MV-2 A floating rate equal to the least of
one month LIBOR plus 2.15% per year,
the Adjusted Group II Net WAC Cap, and
15.00% per year $ 12,000,000 August 15, 2033
Class BV-1 A floating rate equal to the least of
one month LIBOR plus 3.00% per year,
the Adjusted Group II Net WAC Cap, and
15.00% per year $ 9,000,000 August 15, 2033
2-7
Class BV-2 A floating rate equal to the least of
one month LIBOR plus 3.00% per year,
the Adjusted Group II Net WAC Cap, and
15.00% per year $ 6,000,000 August 15, 2033
Class B-3I (4) (4) August 15, 2033
-----------------
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Payment Date in the month approximately 12 months following the month
of the maturity date for the Loan with the latest maturity date has
been designated as the "latest possible maturity date" for each class
of Certificates that represents one or more of the "regular interests"
in the Master REMIC.
(2) Collectively, the Class AF-IO Certificates will be entitled to receive
on each Payment Date interest accrued at the Class AF-IO Pass-Through
Rate on the Class AF-IO Notional Amount. For federal tax purposes, the
Class AF-IO Certificates, collectively, will be entitled to 100% of the
interest payable on the Class I-AF-IO Interest.
(3) Collectively, the Class AV-IO Certificates will be entitled to receive
on each Payment Date interest accrued at the Class AV-IO Pass-Through
Rate on the Class AV-IO Notional Amount. For federal tax purposes, the
Class AV-IO Certificates, collectively, will be entitled to 100% of the
interest payable on the Class I-AV-IO Interest.
(4) The Class B-3I Certificate is a REMIC regular interest for federal
income tax purposes, entitled to the payment of the Class B-3I
Distribution Amount and bearing interest at a rate and upon an amount
described in the definition of Class B-3I Formula Principal
Distribution Amount.
The Seller does not represent that any regular interest in the Master
REMIC will, in fact, mature on any given date, except that each regular interest
of the Master REMIC will absolutely mature by the Assumed Final Maturity Date as
indicated above. Solely for federal income tax purposes, the Master REMIC will
issue a Class R-III Interest, which is hereby designated by the Seller as
constituting the sole class of "residual interests" in the Master REMIC for
purposes of Section 860G(a)(2) of the Code. For purposes of certification, a
Class R Certificate will represent the Class R-III Interest, as well as the
Class R-I and Class R-II Interests described in Section 2.05(c) and Section
2.05(d).
(c) The Uncertificated Intermediate Interests are being issued in
forty-one classes and are hereby designated by the Seller as constituting the
"regular interests" in the Intermediate REMIC for the purposes of Section
860G(a)(1) of the Code. The following terms of the Uncertificated Intermediate
Interests are irrevocably established as of the Closing Date:
Assumed
Original Class Principal Final
Interest Rate Per Annum Balance (or Notional Maturity Date
Class (Pass-Through Rate) Amount ) (1)
-------------------- ------------------------------------------ -------------------------- --------------------
Class I-AF-1 Intermediate Adjusted Group I Net WAC $ 53,969,000 August 15, 2033
Cap Rate
Class I-AF-2 Intermediate Adjusted Group I Net WAC $ 7,562,500 August 15, 2033
Cap Rate
Class I-AF-3 Intermediate Adjusted Group I Net WAC $ 26,468,500 August 15, 2033
Cap Rate
Class I-AF-4 Intermediate Adjusted Group I Net WAC $ 20,625,000 August 15, 2033
Cap Rate
Class I-AF-IO(1) Class I-AF-IO Interest Rate $ 20,625,000 August 15, 2033
2-8
Class I-AF-IO(2) Class I-AF-IO Interest Rate $ 16,500,000 August 15, 2033
Class I-AF-IO(3) Class I-AF-IO Interest Rate $ 13,750,000 August 15, 2033
Class I-AF-IO(4) Class I-AF-IO Interest Rate $ 12,375,000 August 15, 2033
Class I-AF-IO(5) Class I-AF-IO Interest Rate $ 9,625,000 August 15, 2033
Class I-AF-IO(6) Class I-AF-IO Interest Rate $ 8,250,000 August 15, 2033
Class I-AF-IO(7) Class I-AF-IO Interest Rate $ 6,875,000 August 15, 2033
Class I-AF-IO(8) Class I-AF-IO Interest Rate $ 5,500,000 August 15, 2033
Class I-AF-IO(9) Class I-AF-IO Interest Rate $ 5,500,000 August 15, 2033
Class I-AF-IO(10) Class I-AF-IO Interest Rate $ 2,750,000 August 15, 2033
Class I-AF-IO(11) Class I-AF-IO Interest Rate $ 4,125,000 August 15, 2033
Class I-AF-IO(12) Class I-AF-IO Interest Rate $ 2,750,000 August 15, 2033
Class I-AF-IO(13) Class I-AF-IO Interest Rate $ 15,125,000 August 15, 2033
Class I-MF-1 Intermediate Adjusted Group I Net WAC $ 9,969,000 August 15, 2033
Cap Rate
Class I-MF-2 Intermediate Adjusted Group I Net WAC $ 8,593,500 August 15, 2033
Cap Rate
Class I-BF-1 Intermediate Adjusted Group I Net WAC $ 6,531,500 August 15, 2033
Cap Rate
Class I-BF-2 Intermediate Adjusted Group I Net WAC $ 3,781,000 August 15, 2033
Cap Rate
Class I-Accrual Intermediate Adjusted Group I Net WAC $ 74,594,000 August 15, 2033
Cap Rate
Class I-AV-1 Intermediate Adjusted Group II Net WAC $ 79,250,000 August 15, 2033
Cap Rate
Class I-AV-IO(1) Class I-AV-IO Interest Rate $ 12,800,000 August 15, 2033
Class I-AV-IO(2) Class I-AV-IO Interest Rate $ 12,800,000 August 15, 2033
Class I-AV-IO(3) Class I-AV-IO Interest Rate $ 11,200,000 August 15, 2033
Class I-AV-IO(4) Class I-AV-IO Interest Rate $ 8,000,000 August 15, 2033
Class I-AV-IO(5) Class I-AV-IO Interest Rate $ 6,400,000 August 15, 2033
Class I-AV-IO(6) Class I-AV-IO Interest Rate $ 6,400,000 August 15, 2033
Class I-AV-IO(7) Class I-AV-IO Interest Rate $ 4,800,000 August 15, 2033
Class I-AV-IO(8) Class I-AV-IO Interest Rate $ 4,800,000 August 15, 2033
Class I-AV-IO(9) Class I-AV-IO Interest Rate $ 3,200,000 August 15, 2033
Class I-AV-IO(10) Class I-AV-IO Interest Rate $ 3,200,000 August 15, 2033
Class I-AV-IO(11) Class I-AV-IO Interest Rate $ 3,200,000 August 15, 2033
Class I-AV-IO(12) Class I-AV-IO Interest Rate $ 1,600,000 August 15, 2033
Class I-AV-IO(13) Class I-AV-IO Interest Rate $ 11,200,000 August 15, 2033
Class I-MV-1 Intermediate Adjusted Group II Net WAC $ 7,250,000 August 15, 2033
Cap Rate
Class I-MV-2 Intermediate Adjusted Group II Net WAC $ 6,000,000 August 15, 2033
Cap Rate
2-9
Class I-BV-1 Intermediate Adjusted Group II Net WAC $ 4,500,000 August 15, 2033
Cap Rate
Class I-BV-2 Intermediate Adjusted Group II Net WAC $ 3,000,000 August 15, 2033
Cap Rate
Class II - Accrual Intermediate Adjusted Group II Net WAC $ 54,075,000 August 15, 2003
Cap Rate
-------------------
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Payment Date in the month approximately 12 months following the month
of the maturity date for the Loan with the latest maturity date has
been designated as the "latest possible maturity date" for each class
of interests that represents one or more of the "regular interests" in
the Intermediate REMIC.
The Seller does not represent that any Class of Uncertificated
Intermediate Interests will, in fact, mature on any given date, except that each
regular interest of the Intermediate REMIC will absolutely mature by the Assumed
Final Maturity Date as indicated above. Solely for federal income tax purposes,
the Intermediate REMIC will issue a Class R-II Interest, which is hereby
designated by the Seller as constituting the sole class of "residual interests"
in the Intermediate REMIC for purposes of Section 860G(a)(2) of the Code.
(d) The Uncertificated Subsidiary Interests and Class P(F) and
Class P(V) Interests are being issued in thirty classes and are hereby
designated by the Seller as constituting the "regular interests" in the
Subsidiary REMIC for the purposes of Section 860G(a)(1) of the Code. The
following terms of the Uncertificated Subsidiary Interests and Class P(F) and
Class P(V) Interests are irrevocably established as of the Closing Date:
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Interest Original Assumed Final
Rate Xxx Xxxxx Principal Balance Maturity Date
Class (Pass-Through Rate) or Notional Amount (1)
-------------------- ---------------------------------- -------------------------- -------------------
Class S-1F Group I Net WAC Cap Rate $ 149,188,000 August 15, 2033
Class S-2F(1) Group I Net WAC Cap Rate $ 20,625,000 August 15, 2033
Class S-2F(2) Group I Net WAC Cap Rate $ 16,500,000 August 15, 2033
Class S-2F(3) Group I Net WAC Cap Rate $ 13,750,000 August 15, 2033
Class S-2F(4) Group I Net WAC Cap Rate $ 12,375,000 August 15, 2033
Class S-2F(5) Group I Net WAC Cap Rate $ 9,625,000 August 15, 2033
Class S-2F(6) Group I Net WAC Cap Rate $ 8,250,000 August 15, 2033
Class S-2F(7) Group I Net WAC Cap Rate $ 6,875,000 August 15, 2033
Class S-2F(8) Group I Net WAC Cap Rate $ 5,500,000 August 15, 2033
Class S-2F(9) Group I Net WAC Cap Rate $ 5,500,000 August 15, 2033
Class S-2F(10) Group I Net WAC Cap Rate $ 2,750,000 August 15, 2033
Class S-2F(11) Group I Net WAC Cap Rate $ 4,125,000 August 15, 2033
Class S-2F(12) Group I Net WAC Cap Rate $ 2,750,000 August 15, 2033
Class S-2F(13) Group I Net WAC Cap Rate $ 15,125,000 August 15, 2033
Class P(F) 0 60 August 15, 2033
Class S-1V Group II Net WAC Cap Rate $ 108,150,000 August 15, 2033
Class S-2V(1) Group II Net WAC Cap Rate $ 12,800,000 August 15, 2033
Class S-2V(2) Group II Net WAC Cap Rate $ 12,800,000 August 15, 2033
Class S-2V(3) Group II Net WAC Cap Rate $ 11,200,000 August 15, 2033
Class S-2V(4) Group II Net WAC Cap Rate $ 8,000,000 August 15, 2033
Class S-2V(5) Group II Net WAC Cap Rate $ 6,400,000 August 15, 2033
Class S-2V(6) Group II Net WAC Cap Rate $ 6,400,000 August 15, 2033
Class S-2V(7) Group II Net WAC Cap Rate $ 4,800,000 August 15, 2033
Class S-2V(8) Group II Net WAC Cap Rate $ 4,800,000 August 15, 2033
Class S-2V(9) Group II Net WAC Cap Rate $ 3,200,000 August 15, 2033
Class S-2V(10) Group II Net WAC Cap Rate $ 3,200,000 August 15, 2033
Class S-2V(11) Group II Net WAC Cap Rate $ 3,200,000 August 15, 2033
Class S-2V(12) Group II Net WAC Cap Rate $ 1,600,000 August 15, 2033
Class S-2V(13) Group II Net WAC Cap Rate $ 11,200,000 August 15, 2033
Class P(V) 0 40 August 15, 2033
----------------------
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Payment Date in the month approximately 12 months following the month
of the maturity date for the Loan with the latest maturity date has
been designated as the "latest possible maturity date" for each class
of interests that represents one or more of the "regular interests" in
the Subsidiary REMIC.
The Seller does not represent that any Class of Uncertificated
Subsidiary Interests or Class P(F) or Class P(V) Interest will, in fact, mature
on any given date, except that each regular
2-11
interest of the Subsidiary REMIC will absolutely mature by the Assumed Final
Maturity Date as indicated above. Solely for federal income tax purposes, the
Subsidiary REMIC will issue a Class R-I Interest, which is hereby designated by
the Seller as the sole class of "residual interests" in the Subsidiary REMIC for
purposes of Section 860G(a)(2) of the Code.
(e) For any purpose for which the Group I Net WAC Cap Rate and the
Adjusted Group II Net WAC Cap Rate are calculated, the interest rate on the
Loans shall be appropriately adjusted to account for the difference between the
monthly day count convention of the Loans (simple interest which is the same as
an actual/actual convention) and the month day count convention of the regular
interest issued by each REMIC created hereunder. For purposes of calculating the
Net WAC Cap Rate and Adjusted Net WAC Cap Rate, for each of the interests issued
by the Subsidiary REMIC, the Intermediate REMIC and the Master REMIC, such rates
shall be adjusted to equal a month day count convention based on the actual
number of days in the preceding Due Period and a 360 day year so that the Loans
and all regular interests created hereunder will be using the same monthly day
count convention.
(f) The Closing Date, which is the day on which each of the Subsidiary
REMIC, the Intermediate REMIC and the Master REMIC will issue all of its regular
and residual interests, is hereby designated as the "startup day" of each of the
Subsidiary REMIC, the Intermediate REMIC and the Master REMIC within the meaning
of Section 860G(a)(9) of the Code.
(g) After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall:
(i) accept any contribution of assets to the Subsidiary
REMIC, the Intermediate REMIC or the Master REMIC,
(ii) dispose of any portion of the Subsidiary REMIC, the
Intermediate REMIC or the Master REMIC, other than as
provided in Sections 3.06, 3.08 and 8.06,
(iii) engage in any transaction that results in a tax
described in Sections 860F(a)(2) and (5) of the Code,
except as may be contemplated by Section 3.07,
(iv) accept any contribution after the Closing Date that
is subject to the tax imposed by Section 860G(d) of
the Code or
(v) engage in any activity or enter into any agreement
that would result in the receipt by the Subsidiary
REMIC, the Intermediate REMIC or the Master REMIC of
any "net income from foreclosure property" as defined
in Section 860G(c)(2) of the Code, unless, prior to
any such action set forth in clauses (i), (ii),
(iii), (iv) or (v) the Trustee shall have received an
unqualified Opinion of Counsel, which opinion shall
not be an expense of the Trust, stating that such
action will not, directly or indirectly,
(A) adversely affect the status of the
Subsidiary REMIC, the Intermediate REMIC or
the Master REMIC as a REMIC or the
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status of the Uncertificated Subsidiary
Interests or Class P Certificate as "regular
interests" in the Subsidiary REMIC, the
status of the Class R-I Interest as the sole
class of "residual interests" in the
Subsidiary REMIC, the status of the
Uncertificated Intermediate Interests as
"regular interests" in the Intermediate
REMIC, the status of the Class R-II Interest
as the sole class of "residual interests" in
the Intermediate REMIC, the status of the
Regular Certificates and the Uncertificated
Master Interest as "regular interests" in
the Master REMIC, or the status of the Class
R-III Interest as the sole class of
"residual interests" in the Master REMIC,
(B) affect the distributions payable hereunder
to the Certificateholders, or
(C) result in the imposition of any lien, charge
or encumbrance upon the Subsidiary REMIC,
the Intermediate REMIC or the Master REMIC.
(h) Upon the acquisition of any real property (including interests in
real property), or any personal property incident thereto, in connection with
the default of a Loan, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Subsidiary REMIC, the Intermediate REMIC or the Master REMIC of such property
subsequent to the period then permitted by the Code will not result in the
imposition of any taxes on "prohibited transactions" of the Subsidiary REMIC,
the Intermediate REMIC or the Master REMIC, as defined in Section 860F of the
Code, or cause the Subsidiary REMIC, the Intermediate REMIC or the Master REMIC
to fail to qualify as a REMIC at any time that the Uncertificated Subsidiary
Interests, Class P Certificate, Class R Certificate, Uncertificated Intermediate
Interests, Regular Certificates or Uncertificated Master Interest are
outstanding. The Servicer shall manage, conserve, protect and operate such real
property, or any personal property incident thereto, so that such property will
not fail to qualify as "foreclosure property," as defined in Section 860G(a)(8)
of the Code, and that the management, conservation, protection and operation of
such property will not result in the receipt by the Subsidiary REMIC, the
Intermediate REMIC or the Master REMIC of any "income from nonpermitted assets,"
within the meaning of Section 860F(a)(2)(B) of the Code.
SECTION 2.06 Seller Option to Substitute for Prepaid Loans. The Seller
may, at its option, substitute new loans for Loans as to which a Principal
Prepayment in Full has been received by the Servicer prior to October 1, 2002
("Prepaid Loans"), up to a maximum of 5% of the Cut-off Date Pool Principal
Balance, upon satisfaction of the following conditions:
(i) the Seller shall have conveyed to the Trustee the
Loan to be substituted for the Prepaid Loan and the
Loan File related to such Loan and the Seller shall
have marked the Electronic Ledger indicating that
such Loan constitutes part of the Trust;
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(ii) the Loan to be substituted is an Eligible Substitute
Loan and the Seller delivers an Officers'
Certificate, substantially in the form of Exhibit J-3
hereto, to the Trustee certifying that such Loan is
an Eligible Substitute Loan;
(iii) the Seller shall have delivered to the Trustee
evidence of filing of a UCC-1 financing statement
executed by the Seller as debtor, naming the Trustee
as secured party and filed in Minnesota, listing such
Loan to be substituted as collateral;
(iv) the Seller shall have delivered to the Trustee an
executed assignment to the Trustee on behalf of the
Trust in recordable form for the mortgage securing
such Loan to be substituted;
(v) such substitution shall be accomplished prior to the
Determination Date immediately following the calendar
month in which the Principal Prepayment in Full was
received by the Servicer, and no such substitution
shall take place after September 14, 2002.
(vi) the Seller shall have delivered to the Trustee an
Opinion of Counsel
(A) to the effect that the substitution of such
Loan for such Prepaid Loan will not cause
the Master, Intermediate or Subsidiary REMIC
to fail to qualify as a REMIC at any time
under then applicable REMIC Provisions or
cause any "prohibited transaction" that will
result in the imposition of a tax under such
REMIC Provisions, and
(B) to the effect of paragraph 9 of Exhibit F
hereto; and
(vii) if the Principal Prepayment received in respect of
such Prepaid Loan is greater than the Scheduled
Principal Balance of the Loan to be substituted, such
excess shall be distributed to Certificateholders on
the related Payment Date as a prepayment of
principal.
Upon satisfaction of such conditions, the Trustee shall add such Loan
to be substituted to the List of Loans.
Any substitutions pursuant to this Section 2.06 may be accomplished on
a loan-by-loan basis or on an aggregate basis as to all Prepaid Loans with
respect to a given calendar month.
SECTION 2.07 Conveyance of Uncertificated Subsidiary Interests and
Uncertificated Intermediate Interests.
(a) The Seller, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Seller in and
to the Uncertificated Subsidiary Interests for the benefit of the Holders of the
Uncertificated Intermediate Interests and the Holder of the Class R-II Interest.
The Trustee acknowledges receipt of the Uncertificated Subsidiary Interests
(each of which is uncertificated) and declares that it holds and will hold the
same in trust for the exclusive
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use and benefit of the Holders of the Uncertificated Intermediate Interests and
Holder of the Class R-II Interest. The Class R-II Interest, together with the
Uncertificated Intermediate Interests, constitute the entire beneficial
ownership interest in the Intermediate REMIC.
(b) The Seller, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Seller in and
to the Uncertificated Intermediate Interests for the benefit of the holders of
the Regular Certificates and the Class R-III Interest. The Trustee acknowledges
receipt of the Uncertificated Intermediate Interests (which are uncertificated)
and declares that it holds and will hold the same in trust for the exclusive use
and benefit of the holders of the Regular Certificates and the Class R-III
Interest. The Class R-III Interest, together with the Regular Certificates,
constitute the entire beneficial ownership interest in the Master REMIC.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Seller and the Originator make the following representations and
warranties. The Trustee will rely on the representations and warranties in
accepting the Loans in trust and issuing the Certificates and the Class R
Certificate on behalf of the Trust. The repurchase or substitution and
indemnification obligations of the Originator set forth in Section 3.06
constitute the sole remedies available to the Trust, the Certificateholders or
the Class R Certificateholder for a breach of a representation or warranty of
the Originator set forth in Sections 2.03, 3.02, 3.03, 3.04 or 3.05 of this
Agreement, or in the Officer's Certificates delivered pursuant to Sections
2.02(j) or 2.03(b)(vii) of this Agreement.
SECTION 3.01 Representations and Warranties Regarding the Seller. The
Seller represents and warrants to the Certificateholders and the Class R
Certificateholder, effective on the Closing Date and each Subsequent Transfer
Date, that:
(a) Organization and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Seller is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Seller.
(b) Authorization; Binding Obligations. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and to create the Trust and
cause it to make, execute, deliver and perform its obligations under this
Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and to cause the Trust to
be created. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Seller enforceable in accordance with
its terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.
(c) No Consent Required. The Seller is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.
(d) No Violations. The execution, delivery and performance of this
Agreement by the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of the Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Seller is a party
or by which the Seller may be bound.
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(e) Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its properties
or with respect to this Agreement, the Certificates or the Class R Certificate
which, if adversely determined, would in the opinion of the Seller have a
material adverse effect on the transactions contemplated by this Agreement.
(f) Licensing. The Seller is duly licensed in each state in which Loans
were originated to the extent the Seller is required to be licensed by
applicable law in connection with the origination and servicing of the Loans.
(g) Chief Executive Office. The chief executive office of the Seller is
at 300 Landmark Towers, 000 Xx. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000.
The Seller is a corporation organized and existing under the laws of the State
of Minnesota.
(h) No Default. The Seller is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default would materially and adversely
affect is condition (financial or other) or operations or its properties or the
consequences of which would materially and adversely affect its performance
hereunder. The Seller is not in default under any agreement involving financial
obligations or on any outstanding obligation which would materially adversely
impact its financial condition or operations or legal documents associated with
the transaction contemplated by this Agreement.
(i) Lawful Assignment. The Seller has duly executed a valid blanket
assignment of the Loans transferred to the Trust, and has transferred all its
right, title and interest in such Loans. The Assignment, any and all documents
executed and delivered by the Seller pursuant to Section 2.01(a), and this
Agreement each constitutes the legal, valid and binding obligation of the Seller
enforceable in accordance with its respective terms.
(j) Good Title. The Seller is the sole owner of the Loans and has the
authority to sell, transfer and assign such Loans to the Trust under the terms
of this Agreement. There has been no assignment, sale or hypothecation of the
Loans by the Seller, other than a hypothecation which terminates upon sale of
the Loans to the Trust. The Seller has good and marketable title to the Loans,
free and clear of any encumbrance, equity, loan, pledge, charge, claim or
security interest of any type and has full right to transfer the Loans to the
Trust.
SECTION 3.02 Representations and Warranties Regarding Each Loan. The
Originator has made the following representations and warranties to the Seller
in the Transfer Agreement, which representations and warranties the Seller has
assigned to the Trustee for the benefit of the Certificateholders and the Class
R Certificateholder, as of the Closing Date with respect to each Loan identified
on the List of Loans attached to this Agreement as Exhibits L-1 and L-2 and as
of each Subsequent Transfer Date with respect to each Subsequent Loan identified
on the List of Loans attached to the related Subsequent Transfer Instrument:
(a) List of Loans. The information set forth in the List of Loans is
true and correct as of its date.
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(b) Payments. No scheduled payment due under any Initial or Additional
Loan was delinquent over 59 days as of the Cut-off Date and no scheduled payment
due under any Subsequent Loan was delinquent over 29 days as of the Cut-off
Date.
(c) Costs Paid and No Waivers. The terms of the Loan have not been
waived, altered or modified in any respect, except by instruments or documents
identified in the Loan File. All costs, fees and expenses incurred in making,
closing and perfecting the lien of the Loan have been paid. The subject real
property has not been released from the lien of such Loan.
(d) Binding Obligation. The Loan 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.
(e) No Defenses. The Loan 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 Loan or the exercise of any right
thereunder will not render the Loan 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 Originator has been named as an additional
insured party under any hazard insurance on the property described in the Loan,
to the extent required by the Originator's underwriting guidelines. If upon
origination of the Loan, the property securing the Loan was in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards (and if flood insurance was required by federal
regulation and such flood insurance has been made available in the locale where
the property is located), the property is covered by a flood insurance policy of
the nature and in an amount which is consistent with the servicing standard set
forth in Section 5.02.
(g) Combined LTV. As of the Cut-off Date and as of the date that each
Loan is transferred to the Trust, the Combined LTV for each Loan is not greater
than 100%.
(h) Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Loan under this Agreement or pursuant to transfers of the Certificates or
Class R Certificate unlawful or render the Loan unenforceable. The Originator
has duly executed a valid blanket assignment of the Loans transferred to the
Seller, and has transferred all its right, title and interest in such Loans,
including all rights the Originator may have against the originating lender with
respect to Loans originated by a lender other than the Originator, to the
Seller. The blanket assignment, any and all documents executed and delivered by
the Originator pursuant to Sections 2.01(b) and 2.03(b), and this Agreement each
constitutes the legal, valid and binding obligation of the Originator
enforceable in accordance with its respective terms.
(i) Compliance with Law. At the date of origination of the Loan, all
requirements of any federal and state laws, rules and regulations applicable to
the Loan, including, without limitation, usury and truth in lending laws, have
been complied with and the Originator shall for at least the period of this
Agreement, maintain in its possession, available for the Trustee's
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inspection, and shall deliver to the Trustee upon demand, evidence of compliance
with all such requirements.
(j) Loan in Force. The Loan has not been satisfied or subordinated in
whole or in part or rescinded, and the real estate securing such Loan has not
been released from the lien of such Loan in whole or in part.
(k) Valid Lien. The contract and/or promissory note, and the mortgage,
deed of trust, security deed or other evidence of a lien on the related real
property, which evidence the Loan has been duly executed and delivered by the
Obligor, and the lien created thereby has been duly recorded, or has been
delivered to the appropriate governmental authority for recording and will be
duly recorded within 180 days, and constitutes a valid and perfected first,
second or third priority lien, as the case may be, on the real estate described
in such Loan.
(l) Capacity of Parties. The signature(s) of the Obligor(s) on the
contract and/or promissory note, and the mortgage, deed of trust, security deed
or other evidence of a lien on the related real property, which evidence the
Loan are genuine and all parties to the Loan had full legal capacity to execute
such documents.
(m) Good Title. The Originator is the sole owner of the Loan and has
the authority to sell, transfer and assign such Loan to the Seller under the
terms of the Transfer Agreement. There has been no assignment, sale or
hypothecation of the Loan by the Originator except the usual past hypothecation
of the Loan in connection with the Originator's normal banking transactions in
the conduct of its business, which hypothecation terminates upon sale of the
Loan to the Seller. The Originator has good and marketable title to the Loan,
free and clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Loan to the Seller.
(n) No Defaults. As of the applicable Cut-off Date, there was no
default, breach, violation or event permitting acceleration existing under the
Loan 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 Loan (except payment delinquencies permitted by clause
(b) or (c) above). The Originator has not waived any such default, breach,
violation or event permitting acceleration except payment delinquencies
permitted by clause (b) above.
(o) Equal Installments. The Loan provides for monthly payments (except,
in the case of a Balloon Loan, for the final monthly payment of such Loan) which
fully amortize the Loan over its term.
(p) Enforceability. Each Loan 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 lien
provided thereby.
(q) One Original. There is only one original executed promissory note,
which promissory note has been delivered to the Trustee or its Custodian on or
before the Closing Date or Subsequent Transfer Date, if a Subsequent Loan,
except for 26 Group I Loans with an aggregate Scheduled Principal Balance of
$1,119,138.79 and 10 Group II Loans with an
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aggregate Scheduled Principal Balance of $1,033,244.63 as to which the original
promissory note is missing. As to each missing note the Originator has delivered
to the Trustee or its Custodian a copy of the note and a lost note affidavit.
The Custodian has acknowledged that it holds the loan solely as the Trustee's
agent.
(r) Genuine Documents. All documents submitted are genuine, and all
other representations as to each Loan, including the List of Loans, are true and
correct. Any copies of documents provided by the Originator are accurate and
complete (except that, with respect to each Loan that was originated by a lender
other than the Originator, the Originator makes such representation and warranty
only to the best of the Originator's knowledge).
(s) Origination. Each Loan was originated by a home equity lender in
the ordinary course of such lender's business or was originated by the
Originator directly.
(t) Underwriting Guidelines. The Loan was originated or purchased in
accordance with the Originator's then-current underwriting guidelines, and such
underwriting guidelines required an appraisal acceptable to Xxxxxx Xxx or
Freddie Mac.
(u) Good Repair. The property described in the Loan is, to the best of
the Originator's knowledge, free of damage and in good repair. (
v) Qualified Mortgage. The Loan is a "qualified mortgage" within the
meaning of the REMIC Provisions. The Originator represents and warrants that,
either as of (i) the date of origination (within the meaning of the REMIC
Provisions) or (ii) the Closing Date or, if a Subsequent Loan, the Subsequent
Transfer Date, the fair market value of the interest in real property securing
each Loan was not less than 80% of the "adjusted issue price" (in each case
within the meaning of the REMIC Provisions) of such Loan.
(w) Prepayment Term. No Prepayment Charges are payable under the Loan
after the 60th month following the origination date of the Loan.
(x) Certain Disclosure Statements. If a Group I Loan, the Obligor has
executed a statement to the effect that it has received all disclosure materials
required by applicable law with respect to the making of fixed-rate mortgage
loans, and such statement will be retained in the Loan File.
(y) Interest Rate and Payment Amount Adjustments. If the Loan does not
provide for a fixed interest rate over the life of the Loan, the Loan Interest
Rate and monthly payment have been adjusted in accordance with the terms of the
Loan. All required notices of interest rate and payment amount adjustments have
been sent to the Obligor on a timely basis and the computations of such
adjustments were properly calculated. All Loan Interest Rate adjustments have
been made in strict compliance with state and federal law and the terms of the
related Loan.
(z) Section 32. Other than 320 Group I Loans with an aggregate
Scheduled Principal Balance of $10,806,091.00, or 4.67% of the Group I principal
balance on the Closing Date, no Initial or Additional Loan is subject to the
Home Ownership and Equity Protection Act of 1994, Regulation Z ("Section 32"),
or any similar state law or regulation including those relating to "high cost
mortgages" and "high LTV mortgages."
3-5
(aa) Single Premium Insurance. Of the Group I Initial and Additional
Loans, 26 Loans, with an aggregate Scheduled Principal Balance of $2,697,168.72,
or 1.17% of the Group I Pool Scheduled Principal Balance, are Loans in
connection with which the Obligor purchased single premium credit insurance. Of
the Group II Initial and Additional Loans, 62 Loans, with an aggregate Scheduled
Principal Balance of $7,269,523.04, or 4.33% of the Group II Pool Scheduled
Principal Balance, are Loans in connection with which the Obligor purchased
single premium credit insurance. In connection with each such Loan, the Obligor
received a written disclosure of the cost of the insurance, the term of the
insurance and that its purchase was not required, and after receiving the
disclosure the Obligor signed or initialed a written request for the insurance,
all in compliance with Regulation Z, 12 C.F.R. 226.4(d).
(bb) First Payment Date. If a Subsequent Loan, its first payment is due
in or before the month of August 2002.
SECTION 3.03 Additional Representations and Warranties. The Seller
hereby represents and warrants to the Trustee for the benefit of the
Certificateholders and the Class R Certificateholder, as of the Closing Date
with respect to each Loan identified on the List of Loans attached to this
Agreement as Exhibits L-1 and L-2 and as of each Subsequent Transfer Date with
respect to each Subsequent Loan identified on the List of Loans attached to the
related Subsequent Transfer Instrument:
(a) Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Loan under this Agreement or pursuant to transfers of the Certificates or
Class R Certificate unlawful or render the Loan unenforceable. The Seller has
duly executed a valid blanket assignment of the Loans transferred to the Trust,
and has transferred all its right, title and interest in such Loans. The blanket
assignment, any and all documents executed and delivered by the Seller pursuant
to Sections 2.01(b) and 2.03(b), and this Agreement each constitutes the legal,
valid and binding obligation of the Seller enforceable in accordance with its
respective terms.
(b) Good Title. The Seller is the sole owner of the Loan and has the
authority to sell, transfer and assign such Loan to the Trust under the terms of
this Agreement. There has been no assignment, sale or hypothecation of the Loan
by the Seller. The Seller has good and marketable title to the Loan, free and
clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Loan to the Trust.
SECTION 3.04 Representations and Warranties Regarding the Loans in the
Aggregate. The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders and the Class R
Certificateholder, as of the Closing Date with respect to the Initial Loans and
Additional Loans, and as of each Subsequent Transfer Date with respect to the
related Subsequent Loans, that:
(a) Amounts. As of the Closing Date, the sum of the Cut-off Date Pool
Principal Balance, plus the Pre-Funded Amount, equals at least the Original
Aggregate Certificate Principal Balance. By Cut-off Date Principal Balance, the
Initial Loans and Additional Loans
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plus the Subsequent Loans specifically identified as of the Closing Date
represent at least 75% of the Original Aggregate Certificate Principal Balance.
(b) Characteristics.
(i) Group I Loans. The Group I Loans have the following
characteristics:
A. Loan Type. Each Group I Loan is a fixed rate
loan.
B. Secured. Each is secured by a mortgage, deed
of trust or security deed creating a first,
second or third lien on the related real
estate.
C. Term. None has a remaining maturity of more
than 360 months; no Initial Group I Loan has
a final scheduled payment date later than
June 16, 2032, no Additional Group I Loan
has a final scheduled payment date later
than July 5, 2032 and no Subsequent Group I
Loan has a final scheduled payment date
later than September 30, 2032.
D. Principal Balance. No Group I Loan had a
principal balance at origination of more
than $650,000.
E. Combined LTV. The weighted average (by
Scheduled Principal Balance) Combined LTV of
the Group I Loans as of the Post-Funding
Payment Date is not more than 100 basis
points more than such ratio with respect to
the Initial Group I Loans.
F. Loan Interest Rate; WAC. No Initial Group I
Loan has a Loan Interest Rate less than
3.98%. No Additional or Subsequent Group I
Loan has a Loan Interest Rate less than
5.00%. The weighted average (by Scheduled
Principal Balance) of the Loan Interest
Rates of the Group I Loans as of the Cut-off
Date will be greater than 12.00% and as of
the Post-Funding Payment Date, will not be
more than 25 basis points less than the
weighted average of the Loan Interest Rates
of the Initial Group I Loans.
G. Debt Consolidation. The percentage (by
Scheduled Principal Balance) of the Group I
Loans which are identified by the Originator
as debt consolidation loans is not more than
12%.
H. Debt-to-Income. The weighted average (by
Scheduled Principal Balance) of the
debt-to-income ratios of the Obligors on the
Group I Loans is not more than 44.50%.
I. Collateral Type. The percentage (by
Scheduled Principal Balance) of the Group I
Loans secured by owner-occupied dwellings is
at least 96% and by single-family dwellings
is at least 92% as of the Post-Funding Date.
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J. Underwriting Criteria. The percentage (by
Scheduled Principal Balance) of the Group I
Loans as of the Post-Funding Payment Date
which are identified by the Originator under
its standard underwriting criteria as "B,"
"C," and "D" credits will not be more than
100 basis points, 100 basis points, and 0
basis points, respectively, more than the
percentage of Initial Group I Loans
identified as "B," "C," and "D" credits.
X. Xxxx Priority. By Scheduled Principal
Balance, not more than 21.75% of the Group I
Loans are secured by a second priority lien
and not more than 0.25% of the Group I Loans
are secured by a third priority lien as of
the Post-Funding Date.
L. FHA-Insured. No Group I Loan is an
FHA-Insured Loan.
(ii) Group II Loans. The Group II Loans have the following
characteristics:
A. Loan Type. Each Group II Loan is an
adjustable rate loan.
B. Security. Each is secured by a mortgage,
deed of trust or security deed creating a
first lien on the related real estate.
C. Term. None has a remaining maturity of more
than 360 months; no Initial Group II Loan
has a final scheduled payment date later
than May 20, 2032, no Additional Group II
Loan has a final scheduled payment date
later than June 30, 2032 and no Subsequent
Group II Loan has a final scheduled payment
date later than September 30, 2032.
D. Principal Balance. No Group II Loan had a
principal balance at origination of more
than $650,000.
E. LTV. The weighted average (by Scheduled
Principal Balance) LTV of the Group II Loans
as of the Post-Funding Payment Date is not
more than 100 basis points more than such
ratio with respect to the Initial Group II
Loans.
F. Loan Interest Rate; WAC. No Initial or
Additional Group II Loan has a Loan Interest
Rate less than 6.00%. No Subsequent Group II
Loan has a Loan Interest Rate less than
6.00%. The weighted average (by Scheduled
Principal Balance) of the Loan Interest
Rates of the Group II Loans as of the
Post-Funding Payment Date is not more than
25 basis points less than the weighted
average of the Loan Interest Rates of the
Initial Group II Loans.
G. Debt Consolidation. The percentage (by
Scheduled Principal Balance) of the Group II
Loans which are identified by the Originator
as debt consolidation loans is not more than
3%.
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H. Debt-to-Income. The weighted average (by
Scheduled Principal Balance) of the
debt-to-income ratios of the Obligors on the
Group II Loans is not more than 43.50% as of
the Post-Funding Payment Date.
I. Collateral Type. The percentage (by
Scheduled Principal Balance) of the Group II
Loans as of the Post-Funding Payment Date
secured by owner-occupied dwellings is at
least 97% and by single-family dwellings is
at least 92% as of the Post-Funding Date.
J. Underwriting Criteria. The percentage (by
Scheduled Principal Balance) of the Group II
Loans as of the Post-Funding Payment Date
which are identified by the Originator under
its standard underwriting criteria as "B,"
"C," and "D" credits will not be more than
200 basis points, 100 basis points, and 0
basis points, respectively, more than the
percentage of Initial Group II Loans
identified as "B," "C," and "D" credits.
K. FHA-Insured. No Additional or Subsequent
Group II Loan is an FHA-Insured Loan.
c. Geographic Concentrations.
(i) Group I Loans. By Cut-off Date Principal Balance,
10.82% of the Initial and Additional Group I Loans
are secured by property located in California, 10.16%
in Texas, 7.89% in Florida, 5.93% in New York and
5.20% in Michigan. No other state represents more
than 5% of the aggregate Cut-off Date Principal
Balances of the Initial and Additional Group I Loans.
No more than 1% of the Group I Loans by Cut-off Date
Principal Balance are secured by property located in
an area with the same five-digit zip code.
(ii) Group II Loans. By Cut-off Date Principal Balance,
12.24% of the Initial and Additional Group II Loans
are secured by property located in Texas, 9.15% in
Florida, 7.88% in California and 7.02% in Georgia. No
other state represents more than 5% of the aggregate
Cut-off Date Principal Balances of the Initial and
Additional Group II Loans. No more than 1% of the
Group II Loans by Cut-off Date Principal Balance are
secured by property located in an area with the same
five-digit zip code.
(d) Marking Records. The Originator has caused the portions of the
Electronic Ledger relating to the Loans to be clearly and unambiguously marked
to indicate that such Loans constitute part of the Trust and are owned by the
Trust in accordance with the terms of the Trust created hereunder.
(e) No Adverse Selection. No adverse selection procedures have been
employed in selecting the Loans.
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(f) Lender Concentration. No more than 5% of the Group I Loans, by
Cut-off Date Principal Balance, and not more than 15% of the Group II Loans, by
Cut-off Date Principal Balance, were originated by any one lender (other than
the Originator).
(g) Home Ownership and Equity Protection Act. With respect to any Loan
subject to the Home Ownership and Equity Protection Act of 1994, each such Loan
has been originated and serviced in compliance with the provisions thereof.
(h) Computer Tape. The Computer Tape made available by the Originator
was complete and accurate as of its date and includes a description of the same
Loans that are described in the List of Loans.
SECTION 3.05 Representations and Warranties Regarding the Loan Files.
The Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders and the Class R
Certificateholder that:
(a) Possession. On the Closing Date, the Trustee or a Custodian will
have possession of each original Initial Loan and Additional Loan and the
related Loan File, except for the missing notes described in Section 3.02(q) as
to which the Originator has delivered to the Trustee or its Custodian a copy of
the lost notes and lost note affidavits. On each Subsequent Transfer Date, the
Originator will have possession of each original Subsequent Loan being
transferred to the Trust on that Subsequent Transfer Date and the related Loan
File. There are and there will be no custodial agreements or servicing contracts
in effect materially and adversely affecting the rights of the Originator to
make, or cause to be made, any delivery required hereunder or under the Transfer
Agreement.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Loans and the Loan Files by the Originator pursuant to the Transfer Agreement is
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction.
SECTION 3.06 Repurchases of Loans for Breach of Representations and
Warranties.
(a) Subject to Section 3.07, the Originator shall repurchase a Loan, at
its Repurchase Price, not later than 90 days after the day on which the
Originator, the Servicer, the Seller or the Trustee first discovers or should
have discovered a breach of a representation or warranty set forth in Sections
2.03, 3.02, 3.03, 3.04 or 3.05, or in the Officer's Certificates delivered
pursuant to Sections 2.02(j) or 2.03(b)(vii), that materially and adversely
affects the Trust's, the Certificateholders' or the Class R Certificateholder's
interest in such Loan and which breach has not been cured within such time;
provided, however, that
(i) in the event that a party other than the Originator
first becomes aware of such breach, such discovering
party shall notify the Originator in writing within
five Business Days of the date of such discovery and
(ii) with respect to any Loan incorrectly described on the
List of Loans with respect to Cut-off Date Principal
Balance, which the Originator would otherwise be
required to repurchase pursuant to this Section, the
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Originator may, in lieu of repurchasing such Loan,
deliver to the Seller for deposit in the Certificate
Account within 90 days from the date of such
discovery cash in an amount sufficient to cure such
deficiency or discrepancy. Any such cash so deposited
shall be distributed to Certificateholders and the
Class R Certificateholder on the immediately
following Payment Date as a collection of principal
or interest on such Loan, according to the nature of
the deficiency or discrepancy. Notwithstanding any
other provision of this Agreement, the obligation of
the Originator under this Section shall not terminate
upon a Service Transfer pursuant to Article VII.
(b) On or prior to the date that is the second anniversary of the
Closing Date, the Originator may, at its election, substitute an Eligible
Substitute Loan for a Loan that it is obligated to repurchase pursuant to
Section 3.06(a) (such Loan being referred to as the "Replaced Loan") upon
satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the
Loan to be substituted for the Replaced Loan and the
Loan File related to such Loan and the Originator
shall have marked the Electronic Ledger indicating
that such Loan constitutes part of the Trust;
(ii) the Loan to be substituted is an Eligible Substitute
Loan and the Originator delivers an Officers'
Certificate, substantially in the form of Exhibit J-2
hereto, to the Trustee certifying that such Loan is
an Eligible Substitute Loan;
(iii) the Originator shall have delivered to the Trustee
evidence of filing of a UCC-1 financing statement
identifying the Originator as debtor, naming the
Seller as secured party and filed in Delaware,
listing such Loan to be substituted as collateral;
(iv) the Originator shall have delivered to the Trustee an
executed assignment to the Seller and to the Trustee
on behalf of the Trust in recordable form for the
mortgage securing such Loan to be substituted;
(v) the Originator shall have delivered to the Trustee an
Opinion of Counsel
(A) to the effect that the substitution of such
Loan for such Replaced Loan will not cause
any applicable portion of the Trust to fail
to qualify as a REMIC at any time under then
applicable REMIC Provisions or cause any
"prohibited transaction" that will result in
the imposition of a tax under such REMIC
Provisions and
(B) to the effect of paragraph 9 of Exhibit F
hereto; and
(vi) if the Scheduled Principal Balance of such Replaced
Loan is greater than the Scheduled Principal Balance
of the Loan to be substituted, the Originator shall
have delivered to the Seller for deposit in the
Certificate
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Account the amount of such excess and shall have
included in the Officers' Certificate required by
clause (ii) above a certification that such deposit
has been made.
Upon satisfaction of such conditions, the Trustee shall add such Loan
to be substituted to, and delete such Replaced Loan from, the List of Loans.
Such substitution shall be effected prior to the first Determination Date that
occurs more than 90 days after the Originator becomes aware, or should have
become aware, or receives written notice from the Trustee, of the breach
referred to in Section 3.06(a). Promptly after any such substitution of a Loan,
the Originator shall give written notice of such substitution to S&P and
Xxxxx'x.
(c) If the Originator is required to repurchase a Loan under Section
3.06(a) or has elected to substitute an Eligible Substitute Loan for a Loan
under Section 3.06(b), and if the reason for such repurchase or substitution is
that the Originator has failed to deliver to the Trustee the Loan File for the
Loan to be repurchased or substituted for (except in the case of a failure to
deliver evidence of the lien on the related improved property and evidence of
due recording of such mortgage, deed of trust or security deed, if available),
then, notwithstanding the time periods set out in Sections 3.06(a) and 3.06(b),
the Originator shall either
(i) repurchase such Loan, at its respective Repurchase
Price, within 30 days of the Closing Date, or
(ii) substitute an Eligible Substitute Loan for the Loan
within 90 days of the Closing Date.
(d) The Originator shall defend and indemnify the Seller, the Trustee,
the Certificateholders, and the Class R Certificateholder against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, 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 such
representation and warranty.
SECTION 3.07 No Repurchase Under Certain Circumstances. Notwithstanding
any provision of this Agreement to the contrary, no repurchase or substitution
pursuant to Section 3.06 shall be made unless the Originator (at its own
expense) obtains for the Trustee an Opinion of Counsel addressed to the Trustee
that any such repurchase or substitution would not, under the REMIC Provisions,
(i) cause the Master REMIC, Intermediate REMIC, or
Subsidiary REMIC to fail to qualify as a REMIC while
any regular interest in such REMIC is outstanding,
(ii) result in a tax on prohibited transactions within the
meaning of Section 860F(a)(2) of the Code, or
(iii) constitute a contribution after the startup day
subject to tax under Section 860G(d) of the Code.
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The Originator shall diligently attempt to obtain such Opinion of Counsel. In
the case of a repurchase or deposit pursuant to Section 3.06(a) or (b), the
Originator shall, notwithstanding the absence of such opinion as to the
imposition of any tax as the result of such purchase or deposit, repurchase such
Loan or make such deposit and shall guarantee the payment of such tax by paying
to the Trustee the amount of such tax not later than five Business Days before
such tax shall be due and payable to the extent that amounts previously paid
over to and then held by the Trustee pursuant to Section 6.06 are insufficient
to pay such tax and all other taxes chargeable under Section 6.06. Pursuant to
Section 6.06, the Servicer is hereby directed to withhold, and shall withhold
and pay over to the Trustee, an amount sufficient to pay such tax and any other
taxes imposed on "prohibited transactions" under Section 860F(a)(i) of the Code
or imposed on "contributions after startup date" under Section 860G(d) of the
Code from amounts otherwise distributable to the Class R Certificateholder. The
Servicer shall give notice to the Trustee at the time of such repurchase of the
amounts due from the Originator pursuant to the guarantee of the Originator
described above and give notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant
to this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
In the event any tax that is guaranteed by the Originator pursuant to
this Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
SECTION 3.08 Certain Representations and Warranties Regarding
Perfection of the Loans. The Seller represents that:
(a) This Agreement creates a valid and continuing security interest (as
defined in the UCC) in the Loans in favor of the Trustee, which security
interest is prior to all other Liens, and is enforceable as such as against
creditors of and purchasers from the Seller.
(b) The Loans constitute "instruments," "tangible chattel paper,"
"promissory notes," "payment intangibles" or "accounts" within the meaning of
the applicable UCC.
(c) Seller owns and has good and marketable title to the Loans free and
clear of any Lien, claim or encumbrance of any Person.
(d) The Seller has received all consents and approvals required by the
terms of the Loans to the sale of the Loans hereunder to the Trust.
(e) The Seller has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Loans granted to the Trust hereunder.
(f) Other than the security interest granted to the Trust pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed
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any of the Loans. 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 Loans other than any financing statement relating to the
security interest granted to the Trust hereunder or that has been terminated.
The Seller is not aware of any judgment or tax lien filings against the Seller.
(g) The Seller has in its possession all original copies of the
mortgage notes and promissory notes that constitute or evidence the Loans. With
respect to any Loan bearing a stamp indicating that such Loan has been sold to
another party, such other party's interest in such Loan has been released. All
financing statements filed or to be filed against the Seller in favor of the
Trust in connection herewith describing the Loans contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Secured
Party."
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ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01 Transfer of Loans.
(a) On or prior to the Closing Date or the related Subsequent Transfer
Date in the case of Subsequent Loans, the Originator shall deliver the Loan
Files to the Trustee. The Trustee shall maintain the Loan Files at its office or
with a duly appointed Xxxxxxxxx, who shall act as the agent of the Trustee on
behalf of the Certificateholders. The Trustee may release a Loan File to the
Servicer pursuant to Section 5.07. The Originator has filed a form UCC-1
financing statement regarding the sale of the Loans to the Seller, and shall
file continuation statements in respect of such UCC-1 financing statement as if
such financing statement were necessary to perfect the security interest granted
pursuant to Section 2.01(c). The Originator shall take any other actions
necessary to maintain the perfection of such security interest.
(b) The Originator shall file promptly in the appropriate recording
offices the assignments to the Trustee on behalf of the Trust of the mortgage,
deed of trust or security deed securing each Loan relating to real estate
located in Maryland, and shall deliver to the Trustee an Opinion of Counsel to
the effect that the recordation of assignments of the mortgages, deeds of trust
and security deeds, securing Loans relating to real estate located in any State
other than Maryland, is not necessary to effect the assignment to the Trustee of
the Originator's lien on the real property securing such Loans.
SECTION 4.02 Costs and Expenses. The Originator agrees to pay all
reasonable costs and disbursements in connection with the vesting (including the
perfection and the maintenance of perfection, as against all third parties) in
the Trust of all right, title and interest in and to the Loans (including,
without limitation, the mortgage or deed of trust on the related real estate
granted thereby).
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ARTICLE V
SERVICING OF LOANS
SECTION 5.01 Responsibility for Loan Administration. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Loans and perform or cause to be performed all contractual and customary
undertakings of the holder of the Loans to the Obligor. Conseco Finance Corp. if
it is the Servicer, may delegate some or all of its servicing duties to a wholly
owned subsidiary of Conseco Finance Corp., for so long as such subsidiary
remains, directly or indirectly, a wholly owned subsidiary of Conseco Finance
Corp. Notwithstanding any such delegation Conseco Finance Corp. shall retain all
of the rights and obligations of the Servicer hereunder. The Trustee, at the
request of a Servicing Officer, shall furnish the Servicer with any powers of
attorney or other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder. Conseco Finance
Corp. is hereby appointed the Servicer until such time as any Service Transfer
shall be effected under Article VII.
SECTION 5.02 Standard of Care. In managing, administering, servicing
and making collections on the Loans pursuant to this Agreement, the Servicer
will exercise that degree of skill and care consistent with the highest degree
of skill and care that the Servicer exercises with respect to similar loans
(including manufactured housing contracts) serviced by the Servicer; provided,
however, that such degree of skill and care shall be at least as favorable as
the degree of skill and care generally applied by prudent servicers of home
equity loans for prudent institutional investors.
SECTION 5.03 Records. The Servicer shall, during the period it is
servicer hereunder, maintain such books of account and other records as will
enable the Trustee to determine the status of each Loan.
SECTION 5.04 Inspection.
(a) At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Loans, which have not previously been
provided to the Trust, and will cause its personnel to assist in any examination
of such records by the Trustee. The examination referred to in this Section 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 the Trustee may make, the
Trustee may, using generally accepted audit procedures, verify the status of
each Loan and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article VI and compliance
with the standards represented to exist as to each Loan in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Loans at its principal executive office for
inspection by Certificateholders.
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(c) A Certificateholder holding Certificates representing in the
aggregate at least 5% of the Aggregate Certificate Principal Balance shall have
the rights of inspection afforded to the Trustee pursuant to this Section 5.04.
SECTION 5.05 Certificate Account.
(a) On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which shall be an Eligible Account.
The Servicer shall pay into the Certificate Account as promptly as practicable
(but not later than the next Business Day) following receipt thereof, all
amounts received with respect to the Loans, including Prepayment Charges and all
Liquidation Proceeds, other than extension fees and assumption fees, which fees
shall be retained by the Servicer as compensation for servicing the Loans. The
Trustee shall hold all amounts paid into the Certificate Account under this
Agreement in trust for the Trustee, the Certificateholders and the Class R
Certificateholder until payment of any such amounts is authorized under this
Agreement. Only the Trustee may withdraw funds from the Certificate Account.
(b) If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as such,
invest the amounts in the Certificate Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Payment
Date. Any investment of funds in the Certificate Account shall be made in
Eligible Investments held by a financial institution in accordance with the
following requirements:
(i) all Eligible Investments shall be held in an account
with such financial institution in the name of the
Trustee, and the agreement governing such account
shall be governed by the laws of the State of
Minnesota,
(ii) with respect to securities held in such account, such
securities shall be
(A) certificated securities (as such term is
used in N.Y. X.X.X.xx. 8-102(4)(i)),
securities deemed to be certificated
securities under applicable regulations of
the United States government, or
uncertificated securities issued by an
issuer organized under the laws of the State
of New York or the State of Delaware,
(B) either
(1) in the possession of such
institution,
(2) in the possession of a clearing
corporation (as such term is used
in Minn. Stat. ss. 8-102(5)) in the
State of New York, registered in
the name of such clearing
corporation or its nominee, not
endorsed for collection or
surrender or any other purpose not
involving transfer, not containing
any evidence of a right or interest
inconsistent with the Trustee's
security interest therein, and held
by such clearing corporation in an
account of such institution,
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(3) held in an account of such
institution with the Federal
Reserve Bank of New York or the
Federal Reserve Bank of
Minneapolis, or
(4) in the case of uncertificated
securities, issued in the name of
such institution, and
(C) identified, by book entry or otherwise, as
held for the account of, or pledged to, the
Trustee on the records of such institution,
and such institution shall have sent the
Trustee a confirmation thereof, and
(iii) with respect to repurchase obligations held in such
account, such repurchase obligations shall be
identified by such institution, by book entry or
otherwise, as held for the account of, or pledged to,
the Trustee on the records of such institution, and
the related securities shall be held in accordance
with the requirements of clause (ii) above.
Once such funds are invested, such institution shall not change the investment
of such funds. All income and gain from such investments shall be added to the
Certificate Account and distributed on such Payment Date pursuant to Section
8.04. Any losses from such investments will be deducted from other investment
earnings or from other funds in the Certificate Account. An amount equal to any
net loss on such investments shall be deposited in the Certificate Account by
the Seller out of its own funds immediately as realized. The Servicer and the
Trustee shall in no way be liable for losses on amounts invested in accordance
with the provisions hereof. Funds in the Certificate Account not so invested
must be insured to the extent permitted by law by the Federal Deposit Insurance
Corporation. "Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully
guaranteed by, the United States of America, or any
agency or instrumentality of the United States of
America the obligations of which are backed by the
full faith and credit of the United States of
America;
(ii)
(A) demand and time deposits in, certificates of
deposit of, bankers' acceptances issued by,
or federal funds sold by any depository
institution or trust company (including the
Trustee or any Affiliate of the Trustee,
acting in its commercial capacity)
incorporated under the laws of the United
States of America or any state thereof and
subject to supervision and examination by
federal and/or state authorities, so long
as, at the time of such investment or
contractual commitment providing for such
investment, the commercial paper or other
short-term debt obligations of such
depository institution or trust company are
rated, if rated by such rating company, at
least A-1+ by S&P and P-1 by Xxxxx'x, and
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(B) any other demand or time deposit or
certificate of deposit which is fully
insured by the Federal Deposit Insurance
Corporation;
(iii) shares of an investment company registered under the
Investment Company Act of 1940, whose shares are
registered under the Securities Act of 1933 and have
a rating of AAA by S&P and Aaa by Xxxxx'x, and whose
only investments are in securities described in
clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any
security described in clause (i) above or (B) any
other security issued or guaranteed by an agency or
instrumentality of the United States of America, in
either case entered into with a depository
institution or trust company (acting as principal)
described in clause (ii)(A) above;
(v) securities that have been rated, if rated by such
rating company, at least A-1+ by S&P and P-1 from
Xxxxx'x, and bearing interest or sold at a discount
issued by any corporation incorporated under the laws
of the United States of America or any State thereof
which have a credit rating, if rated by such rating
company, of at least AA from S&P and Aa2 from
Xxxxx'x; provided, however, that securities issued by
any particular corporation will not be Eligible
Investments to the extent that investment therein
will cause the then outstanding principal amount of
securities issued by such corporation and held as
part of the corpus of the Trust to exceed 10% of
amounts held in the Certificate Account;
(vi) commercial paper having a rating, if rated by such
rating company, of at least A-1+ from S&P and P-1
from Xxxxx'x at the time of such investment;
(vii) money market funds rated at least AAAm or AAAm-G by
S&P ; and
(viii) other obligations or securities that are acceptable
to each of the Rating Agencies as an Eligible
Investment hereunder and will not reduce the rating
assigned to any Class of Certificates by each of the
Rating Agencies below the lower of the then-current
rating or the rating assigned to such Certificates as
of the Closing Date by each of the Rating Agencies,
as evidenced in writing;
provided, that, any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
The Trustee may trade with itself or an Affiliate in the purchase or
sale of such Eligible Investments. The Servicer acknowledges that to the extent
that regulations of the Comptroller of the Currency or other applicable
regulatory agency grant the Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Servicer specifically
waives receipt of such confirmations; provided, that, such confirmations shall
begin to be provided to the Backup Servicer upon its replacement of the
Servicer.
5-4
(c) If at any time the Trustee receives notice (from any of the Rating
Agencies, the Servicer or otherwise) that the Certificate Account has ceased to
be an Eligible Account, the Trustee shall, as soon as practicable but in no
event later than five Business Days of the Trustee's receipt of such notice,
transfer the Certificate Account and all funds and Eligible Investments therein
to an Eligible Account. Following any such transfer, the Trustee shall notify
each of the Rating Agencies, the Backup Servicer and the Servicer of the
location of the Certificate Account.
SECTION 5.06 Enforcement.
(a) The Servicer shall, consistent with customary servicing procedures,
act with respect to the Loans in such manner as will in the Servicer's
reasonable judgment maximize the receipt of principal and interest on such Loans
and Liquidation Proceeds with respect to Liquidated Loans. The Servicer shall
exercise its discretion, consistent with customary servicing procedures and the
terms of this Agreement, with respect to the enforcement of defaulted Loans in
such manner as will maximize the receipt of principal and interest with respect
thereto, including but not limited to the sale of such Loan to a third party,
the modification of such Loan, or foreclosure upon the related real property and
disposition thereof.
(b) In accordance with the standard of care specified in Section 5.02,
the Servicer may, in its own name, if possible, or as agent for the Trust,
commence proceedings for the foreclosure of any subject real estate, or may take
such other steps that in the Servicer's reasonable judgment will maximize
Liquidation Proceeds with respect to the Loan, including, for example, the sale
of the Loan to a third party for foreclosure or enforcement and, in the case of
any default on a related prior mortgage loan, the advancing of funds to correct
such default and the advancing of funds to pay off a related prior mortgage
loan, which advances are Liquidation Expenses that will be reimbursed to the
Servicer out of related Liquidation Proceeds before the related Net Liquidation
Proceeds are paid to Certificateholders and the Class R Certificateholder. The
Servicer shall also deposit in the Certificate Account any Net Liquidation
Proceeds received in connection with any Loan which became a Liquidated Loan in
a prior Due Period.
(c) The Servicer may sue to enforce or collect upon Loans, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to commence
a legal proceeding to enforce a Loan, the act of commencement shall be deemed to
be an automatic assignment of the Loan to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Loan on the ground that it is not a
real party in interest or a holder entitled to enforce the Loan, the Trustee on
behalf of the Trust shall, at the Servicer's expense for which it will be
reimbursed by the Trust, take such steps as the Servicer deems necessary to
enforce the Loan, including bringing suit in its name or the names of the
Certificateholders and the Class R Certificateholder.
(d) The Servicer may grant to the Obligor on any Loan any rebate,
refund or adjustment out of the Certificate Account that the Servicer in good
faith believes is required because of the Principal Prepayment in Full of the
Loan. The Servicer will not permit any rescission or cancellation of any Loan.
(e) The Servicer shall enforce any due-on-sale clause in a Loan if such
enforcement is called for under its then current servicing policies for
obligations similar to the Loans,
5-5
provided, that, such enforcement is permitted by applicable law and will not
adversely affect any applicable insurance policy. If an assumption of a Loan is
permitted by the Servicer, upon conveyance of the related property the Servicer
shall use its best efforts to obtain an assumption agreement in connection
therewith.
(f) Any provision of this Agreement to the contrary notwithstanding,
the Servicer shall not agree to the modification or waiver of any provision of a
Loan at a time when such Loan is not in default or such default is not
reasonably foreseeable, if such modification or waiver would both (i) be treated
as a taxable exchange under Section 1001 of the Code or any proposed, temporary
or final Treasury Regulations promulgated thereunder and (ii) cause the Master
REMIC, Intermediate REMIC or Subsidiary REMIC to fail to qualify as a REMIC or
cause the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.
SECTION 5.07 Trustee to Cooperate.
(a) Upon payment in full on any Loan, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the Servicer)
on the next succeeding Payment Date by 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 Certificate Account pursuant to Section 5.05 have been so deposited and may
be in substantially the form of Exhibit J-4 hereto) and shall request delivery
of the Loan and Loan File to the Servicer. Upon receipt of such delivery and
request, the Trustee shall promptly release or cause to be released such Loan
and Loan File to the Servicer. Upon receipt of such Loan and Loan File, each of
Conseco Finance Corp. (if different from the Servicer) and the Servicer is
authorized to execute an instrument in satisfaction of such Loan and to do such
other acts and execute such other documents as the Servicer deems necessary to
discharge the Obligor thereunder and eliminate any lien on the related real
estate. The Servicer shall determine when a Loan has been paid in full;
provided, that, to the extent that insufficient payments are received on a Loan
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, without any right of
reimbursement therefor (except from additional amounts recovered from the
related Obligor or otherwise in respect of such Loan), and deposited in the
Certificate Account.
(b) From time to time as appropriate for servicing and foreclosing in
connection with a Loan, the Trustee shall, upon written request of a Servicing
Officer (which may be substantially in the form of Exhibit J-4 hereto) and
delivery to the Trustee of a receipt signed by such Servicing Officer, cause the
original Loan and the related Loan File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such Loan to
be released to the Servicer with a notation that the Loan has been assigned to
the Trustee. Upon request of a Servicing Officer, the Trustee shall perform such
other acts as reasonably requested by the Servicer and otherwise cooperate with
the Servicer in enforcement of the Certificateholders' and Class R
Certificateholder's rights and remedies with respect to Loans.
(c) The Servicer's receipt of a Loan and/or Loan File shall obligate
the Servicer to return the original Loan and the related Loan File to the
Trustee when its need by the Servicer
5-6
has ceased unless the Loan shall be liquidated or repurchased or replaced as
described in Section 3.06 or Section 8.06.
SECTION 5.08 Costs and Expenses. All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, including payment of all fees and
expenses incurred in connection with the enforcement of Loans, foreclosure upon
real estate securing any such Loans and all other fees and expenses not
expressly stated hereunder to be for the account of the Trust or the Originator,
and, while the Originator or a subsidiary or affiliate of the Originator is the
Servicer, payment of the Trustee's fees pursuant to Section 8.06 and fees and
expenses of accountants, shall be paid by the Servicer and the Servicer shall
not be entitled to reimbursement hereunder, except as provided in this Section
and except that the Servicer shall be reimbursed for any Liquidation Expense not
in excess of the Related Proceeds pursuant to Section 8.04(a)(ii). The Servicer
shall not incur any Liquidation Expense unless it determines in its good faith
business judgment that (i) incurring such expense will increase the Net
Liquidation Proceeds on the related Loan, and (ii) that the Liquidation Expense,
if incurred, would not constitute a Non-Recoverable Liquidation Expense. Any
Liquidation Expense previously incurred by the Servicer that is determined by
the Servicer to have become a Non-Recoverable Liquidation Expense shall be
reported on the related Monthly Report. The Trustee shall not be responsible for
determining whether any such determination was reasonable. In the case of
Conseco Finance, but not the Backup Servicer or any successor Servicer,
reimbursement for Liquidation Expenses incurred in connection with filing claims
in bankruptcy proceedings for those Loans for which no Liquidation Proceeds are
ultimately received shall not exceed $500 per loan or $50,000 in the aggregate.
So long as the Servicer is not the Originator or a subsidiary or Affiliate of
the Originator, the Servicer shall be reimbursed from the Trust for any
third-party costs incurred by it pursuant to Sections 5.12, 6.06, 7.02 or 11.06.
The Backup Servicer shall also be reimbursed from the Trust for all
extraordinary costs and expenses and all reimbursed costs and expenses shall be
paid to the Backup Servicer under Section 8.04(b)(i).
SECTION 5.09 Maintenance of Insurance. The Servicer shall at all times
keep in force a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement, and a fidelity
bond. Such policy or policies and such fidelity bond shall be in such form and
amount as is generally customary among persons who service a portfolio of home
equity loans having an aggregate principal amount of $10,000,000 or more, and
which are generally regarded as servicers acceptable to institutional investors.
The Servicer shall cause to be maintained with respect to the real property
securing a Loan hazard insurance (excluding flood insurance coverage) if such
Loan is secured by a first priority mortgage, deed of trust or security deed or
the initial principal balance of such Loan exceeds $20,000.
SECTION 5.10 Merger or Consolidation of Servicer. Any Person into which
the Servicer may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Servicer shall be a party shall be the successor of the Servicer hereunder,
provided, however, that such Person shall be an Eligible Servicer, 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 Servicer
shall promptly notify each of the Rating Agencies and the Backup Servicer in the
event it is a party to any merger, conversion or consolidation.
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SECTION 5.11 Advance Facility.
(a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, a "P&I Advance Facility"), the
documentation for which complies with Section 5.11(e) below, under which (1) the
Servicer assigns or pledges its rights under this Agreement to be reimbursed for
any or all Advances to a special-purpose bankruptcy-remote entity (an "SPV"),
which in turn, directly or through other assignees and/or pledges, assigns or
pledges such rights to a Person, which may include a trustee acting on behalf of
holders of debt instruments (any such Person, an "Advance Financing Person"),
and/or (2) an Advance Financing Person agrees to fund some or all Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party is required before the
Servicer may enter into a P&I Advance Facility. Notwithstanding the existence of
any P&I Advance Facility under which an Advance Financing Person agrees to fund
Advances on the Servicer's behalf, the Servicer shall remain obligated pursuant
to this Agreement to make Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such P&I
Advance Facility. If the Servicer enters into a P&I Advance Facility, and for so
long as an Advance Financing Person remains entitled to receive reimbursement
for any Advances outstanding and previously unreimbursed pursuant to this
Agreement, then the Servicer shall not be permitted to reimburse itself for
Advances, pursuant to Section 8.04(b)(ii) of this Agreement, but instead the
Servicer's assignee and designee (the "Servicer's Assignee") shall have the
right to receive from the Trustee from amounts in the Certificate Account
collections that the Servicer would otherwise have the right to receive from the
Certificate Account, pursuant to Section 8.04(b)(ii) of this Agreement, amounts
available to reimburse previously unreimbursed Advances ("P&I Reimbursement
Amounts").
(b) If the Servicer enters into a P&I Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee a written
notice of the existence of such P&I Advance Facility (a "P&I Advance Facility
Notice"), stating the identity of the Advance Financing Person and the related
Servicer's Assignee, and specifying what Advances are covered by the P&I Advance
Facility. A P&I Advance Facility may only be terminated by the joint written
direction of the applicable Servicer and the related Advance Financing Person.
(c) P&I Reimbursement Amounts shall consist solely of amounts in
respect of Advances made with respect to the Delinquent Payments for which the
Servicer would be permitted to reimbursement in accordance with Section
8.04(b)(ii) hereof, assuming the Servicer had made the related Advance(s).
(d) An Advance Financing Person who receives an assignment or pledge of
rights to receive P&I Reimbursement Amounts and/or whose obligations hereunder
are limited to the funding of Advances shall not be required to meet the
criteria for qualification as an Eligible Servicer.
(e) The documentation establishing any P&I Advance Facility shall
require that P&I Reimbursement Amounts be allocated to outstanding unreimbursed
Advances on a "first-in, first out" ("FIFO") basis. In the event that, as a
result of this FIFO allocation, some or all of a P&I Reimbursement Amount
related to Advances that were made by a Person other than Conseco
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Finance Corp. or the Advance Financing Person, then the Servicer's Assignee
shall be required to remit any portion of such P&I Reimbursement Amount to each
person entitled to such portion of such P&I Reimbursement Amount. At any time
when the Advance Financing Person shall have ceased funding Advances, including
without limitation a servicing transfer pursuant to Article VII, and the
Servicer's Assignee shall have received from the Certificate Account P&I
Reimbursement Amounts sufficient to reimburse all Advances, the right to
reimbursement for which were assigned to the Servicer's Assignee, then the
Servicer's Assignee and the Advance Financing Person and the Servicer shall
deliver a written notice to the Trustee terminating the P&I Advance Facility,
whereupon the applicable Servicer shall again be entitled to receive from the
Trustee the related P&I Reimbursement Amounts from the Certificate Account
pursuant to Section 8.04(b)(ii). Without limiting the generality of the
foregoing, the Servicer shall remain entitled to be reimbursed by the Advance
Financing Person for all Advances funded by the Servicer to the extent the
related P&I Reimbursement Amount(s) have not been assigned or pledged to an
Advance Financing Person or related Servicer's Assignee. By way of illustration,
and not by way of limiting the generality of the foregoing, if a Servicer who is
a party to a P&I Advance Facility resigns or is terminated, and is replaced by a
successor Servicer, and the successor Servicer directly funds Advances and does
not assign or pledge the related P&I Reimbursement Amounts to an Advance
Financing Person, then after all P&I Reimbursement Amounts that are owed to the
predecessor Servicer and the related Advance Financing Person, which were made
prior to any advances made by the successor Servicer, have been reimbursed in
full, then the successor Servicer shall be entitled to receive all P&I
Reimbursement Amounts collected with respect to the Loans.
(f) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, a "CLEAR Advance Facility"), the
documentation for which complies with Section 5.11(j) below, under which (1) the
Servicer assigns or pledges its rights under this Agreement to be reimbursed for
any or all Liquidation Expenses incurred by it as to which it is entitled to
reimbursement pursuant to Section 8.04(a)(ii) (a "Servicer Expense Advance") to
an SPV, which in turn, directly or through other assignees and/or pledges,
assigns or pledges such rights to an Advance Financing Person, and/or (2) an
Advance Financing Person agrees to fund some or all Servicer Expense Advances
required to be incurred by the Servicer pursuant to this Agreement. No consent
of the Trustee, Certificateholders or any other party is required before the
Servicer may enter into a CLEAR Advance Facility. Notwithstanding the existence
of any CLEAR Advance Facility under which an Advance Financing Person agrees to
fund Servicer Expense Advances on the Servicer's behalf, the Servicer shall
remain obligated pursuant to this Agreement to incur Liquidation Expenses
pursuant to and as required by this Agreement, and shall not be relieved of such
obligations by virtue of such Advance Facility. If the Servicer enters into a
CLEAR Advance Facility, and for so long as a CLEAR Advance Financing Person
remains entitled to receive reimbursement for any Servicer Expense Advances
incurred and previously unreimbursed pursuant to this Agreement, then the
Trustee shall not reimburse the Servicer for Servicer Expense Advances pursuant
to Section 8.04(a)(ii) of this Agreement, but instead the SPV, as the Servicer's
assignee and designee (the "Servicer's Assignee"), and the Advance Financing
Person, as the pledgee and assignee of the Servicer's Assignee, shall have the
right to receive out of the Certificate Account collections that the Servicer
would otherwise have the right to receive from the Certificate Account, pursuant
to Section 8.04(a)(ii) of this Agreement, amounts available to reimburse
previously unreimbursed Servicer Expense Advances ("Expense Reimbursement
Amounts").
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(g) If the Servicer enters into a CLEAR Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee a written
notice of the existence of such Advance Facility (a "CLEAR Advance Facility
Notice"), stating the identity of the Advance Financing Person and the related
Servicer's Assignee, and specifying what Servicer Expense Advances are owned by
the CLEAR Advance Facility. A CLEAR Advance Facility may only be terminated by
the joint written direction of the applicable Servicer and the related Advance
Financing Person. Once a CLEAR Advance Facility Notice has been delivered to the
Trustee, and until a joint written direction that the Advance Facility has been
terminated is delivered to the Trustee, no amendment to this Agreement may be
made without the prior written consent of the Advance Financing Person unless a
transfer of servicing has occurred pursuant to Article VII and the Advance
Financing Person has received all Expense Reimbursement Amounts.
(h) Expense Reimbursement Amounts shall consist solely of amounts in
respect of Servicer Expense Advances incurred in connection with the liquidation
of Loans for which the Servicer would be permitted to be reimbursed in
accordance with Section 8.04(a)(ii) hereof, assuming the Servicer had incurred
the related Servicer Expense Advances.
(i) An Advance Financing Person who receives an assignment or pledge of
rights to receive Expense Reimbursement Amounts and/or whose obligations
hereunder are limited to the funding of Servicer Expense Advances shall not be
required to meet the criteria for qualification as an Eligible Servicer.
(j) The documentation establishing any CLEAR Advance Facility shall
require that Expense Reimbursement Amounts be allocated to outstanding
unreimbursed Servicer Expense Advances on a FIFO basis. In the event that, as a
result of this FIFO allocation, some or all of an Expense Reimbursement Amount
related to Servicer Expense Advances made by a Person other than Conseco Finance
Corp. or the Advance Financing Person, then the Servicer's Assignee shall be
required to remit any portion of such Expense Reimbursement Amount to each
person entitled to such portion of such Expense Reimbursement Amount. At any
time when the Advance Financing Person shall have ceased funding Servicer
Expense Advances, including without limitation upon a servicing transfer
pursuant to Article VII, and the Trustee shall have withdrawn from the
Certificate Account, and remitted to the Advance Financing Person, Expense
Reimbursement Amounts sufficient to reimburse all Servicer Expense Advances, the
right to reimbursement for which were assigned to the Servicer's Assignee and
pledged and assigned to the Advance Financing Person, then the Servicer's
Assignee and the Advance Financing Person and the Servicer shall deliver a
written notice to the Trustee terminating the CLEAR Advance Facility Notice,
whereupon the applicable Servicer shall again be entitled to payment of the
related Expense Reimbursement Amounts pursuant to Section 8.04(a)(ii). Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
reimbursement from the Servicer's Assignee and/or the Advance Financing Person
for all Servicer Expense Advances funded by the Servicer to the extent the
related Expense Reimbursement Amount(s) have not been assigned or pledged to an
Advance Financing Person or related Servicer's Assignee. By way of illustration,
and not by way of limiting the generality of the foregoing, if a Servicer who is
a party to a CLEAR Advance Facility resigns or is terminated, and is replaced by
a successor Servicer, and the successor Servicer directly incurs Servicer
Expense Advances with respect to a Loan and does not assign or pledge the
related Expense Reimbursement Amounts to an Advance Financing Person, then after
all Expense Reimbursement Amounts attributable to that Loan that
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are owed to the predecessor Servicer and the related Advance Financing Person,
which were made prior to any Servicer Expense Advances made by the successor
Servicer, have been reimbursed in full, then the successor Servicer shall be
entitled to receive all Expense Reimbursement Amounts subsequently collected
with respect to that Loan.
SECTION 5.12 Backup Servicer.
(a) Appointment Period. The Backup Servicer hereby acknowledges and
agrees that any time during the period beginning on the Closing Date and ending
on the date on which the Original Class Principal Balance of the Certificates
has been reduced to zero (such period, the "Appointment Period"), at the sole
option of the Trustee following a termination of Conseco Finance as the Servicer
hereunder, the Trustee may appoint the Backup Servicer as the successor Servicer
hereunder, subject to the provisions of Article VII herein relating to the
termination and succession of the Servicer. The Backup Servicer shall be
reimbursed under Section 8.04(b)(i) and Section 8.04(d)(i) for any and all costs
and expenses incurred by it in and related to the transfer of servicing to the
Backup Servicer under this Agreement. Such costs and expenses include, without
limitation, any costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Backup Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Backup Servicer
to service the Contracts properly and effectively.
(b) Transfer of Servicing. The Backup Servicer hereby agrees that, in
the event that pursuant to Article VII herein it becomes a successor Servicer
during the Appointment Period, as stated in Section 5.12(a) above, it shall
assume, the duties of the Servicer hereunder, and the rights of the Servicer
hereunder, including the rights to the compensation provided to the Servicer
hereunder, subject to the provisions of Article VII herein relating to the
termination and succession of the Servicer. Subject to the provisions of Article
VII herein relating to the termination and succession of the Servicer, the
Backup Servicer shall assume such duties and rights as expeditiously as
possible, but in no event greater than 60 days after receipt of notice from the
Trustee, that Conseco Finance Corp. is no longer the Servicer hereunder and that
the Trustee has directed that the Backup Servicer be appointed as successor
Servicer, and the Backup Servicer shall deliver at such time such written
acceptance of appointment as successor Servicer hereunder as the Trustee and the
Trust shall reasonably require. The Backup Servicer shall within 10 days, or
whenever commercially reasonable, send notices to obligors of the servicing
transfer.
(c) Fee. For undertaking its role as Backup Servicer under this
Agreement, the Backup Servicer shall be entitled to receive the Backup Servicing
Fee pursuant to Section 8.04(b)(i) and Section 8.04(d)(i) for its availability
during the Appointment Period.
(d) [Reserved]
(e) Initial Information. Conseco Finance Corp. has delivered to the
Backup Servicer a complete data file for each Loan, collateral and Certificate
cashflows, price and yield information for each Class of Certificates,
collateral modeling assumptions, tax treatment of the collateral and the each
Class of Certificates, and such other initial information as the Backup Servicer
has requested.
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(f) Monthly Information. On at least a monthly basis each Payment Date
beginning with the Payment Date in August, 2002, Conseco Finance Corp. shall
deliver to the Backup Servicer the then-current Data. The Backup Servicer shall
promptly notify the Trustee, Conseco Finance Corp. and the Rating Agencies if
the Backup Servicer does not receive the Data from Conseco Finance Corp. each
month during the Appointment Period or if the Backup Servicer determines that
the Data received by it is not sufficient to enable it to act as Servicer.
Except as provided in the foregoing sentence, unless and until the Backup
Servicer becomes the Servicer, the Backup Servicer will have no obligations with
respect to servicing data received by it, nor any reporting obligations. If the
Backup Servicer determines it reasonably requires additional information to
enable it to assume the duties of Servicer, it will notify Conseco Finance
Corp., the Trustee and the Rating Agencies of such additional required
information and thereafter the "Data" to be delivered under this Section 5.12(f)
shall include such additional information; provided that Conseco Finance Corp.
shall have a reasonable time to take such action as may reasonably be required
to enable it to furnish such additional information on a monthly basis.
(g) Quarterly and Annual Information. Conseco Finance Corp. will
provide to the Backup Servicer, on a quarterly basis, copies of all Form 1099
and Form 1066 filings, and, on an annual basis, copies of all Form 1099 and
Schedule Q filings.
(h) Periodic Inspection. During the Appointment Period, Conseco Finance
Corp. will permit the Backup Servicer, upon reasonable notice and during normal
working hours, to perform periodic, on-site due diligence reviews of Conseco
Finance Corp.'s performance of its obligations as Servicer and to review all
records in the custody of Conseco Finance Corp. relating to the Loans. The
Backup Servicer will conduct all such reviews in a manner which does not
unreasonably interfere with the normal operations of Conseco Finance Corp. or
customer or employee relations. The Backup Servicer will be entitled to
reimbursement for all reasonable expenses incurred with regard to such
inspections under Section 8.04(b)(ii). Without otherwise limiting the scope of
the examination that the Backup Servicer may make, the Backup Servicer may,
using generally accepted auditing procedures, verify the status of each loan and
review the Electronic Ledger and records relating thereto for (i) conformity to
the servicing records provided pursuant to Section 5.12(e) and (ii) compliance
with the representations in this Agreement regarding the Contracts. If Conseco
Finance Corp. in any way materially changes its servicing system or reporting
format, it will promptly notify the Backup Servicer.
(i) Confidential Information. The Backup Servicer agrees to hold any
servicing information in confidence and to disclose such information only as
required by this Agreement, applicable law or as necessary in the course of
prudent servicing practices.
(j) Limitation of Liability. The Backup Servicer, as Servicer, shall
have no liability for errors in withholding tax as required by Section 3.07,
provided that no provision of this Agreement shall be construed to relieve the
Backup Servicer from liability for its own negligence.
(k) Successor Backup Servicer. The Backup Servicer may at any time
resign and be discharged from its obligations under this Agreement, provided
that a successor Backup Servicer acceptable (as evidenced in writing) to the
Rating Agencies shall have executed and delivered to the Servicer, the
Originator, the Trustee and the predecessor Backup Servicer, an instrument
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accepting such appointment and agreeing to be bound by the terms of this
Agreement. Upon such acceptance, the resignation of the predecessor Backup
Servicer shall become effective. The predecessor Backup Servicer shall cooperate
in effecting the transfer of its obligations to the successor.
(l) Termination. The Backup Servicer and the Trust hereby acknowledge
and agree that all obligations of the Backup Servicer hereunder shall terminate
upon the expiration of the Appointment Period.
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ARTICLE VI
REPORTS AND TAX MATTERS
SECTION 6.01 Monthly Reports. No later than one Business Day following
each Determination Date, the Servicer shall deliver to the Trustee, the Backup
Servicer and the Rating Agencies a Monthly Report, substantially in the form of
Exhibit M hereto.
SECTION 6.02 Officer's Certificate. Each Monthly Report pursuant to
Section 6.01 shall be accompanied by a certificate of a Servicing Officer
substantially in the form of Exhibit H, certifying the accuracy of the Monthly
Report and that no Event of Termination or event that with notice or lapse of
time or both would become an Event of Termination has occurred, or if such event
has occurred and is continuing, specifying the event and its status.
SECTION 6.03 Other Data. In addition, the Originator and (if different
from the Originator) the Servicer shall, on request of the Trustee or any of the
Rating Agencies, furnish the Trustee and/or any such Rating Agencies such
underlying data as may be reasonably requested.
SECTION 6.04 Annual Report of Accountants. On or before May 1 of each
year, commencing May 1, 2003, Conseco Finance, if it is the Servicer, at its
expense shall cause PricewaterhouseCoopers LLP, or another firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants, to issue to the Servicer a report that such firm has
examined selected documents, records and management's assertions relating to
loans serviced by the Servicer and stating that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers, or any successor
uniform program, except for such significant exceptions or errors in records
that, in the opinion of such firm, generally accepted attestation standards
requires it to report.
SECTION 6.05 Statements to Certificateholders and the Class R
Certificateholder.
(a) The Servicer shall prepare and furnish to the Trustee the
statements specified below relating to the Class AF, Class AF-IO, Class MF,
Class BF, Class AV, Class AV-IO, Class MV, Class BV, Class B-3I, Class P and
Class R Certificates on or before the third Business Day next preceding each
Payment Date.
(b) Concurrently with each distribution to Certificateholders, the
Trustee shall, so long as it has received the Monthly Report from the Servicer,
forward or cause to be forwarded by mail to each Holder of a Class AF, Class
AF-IO, Class MF, Class BF, Class AV, Class AV-IO, Class MV, Class BV, Class
B-3I, Class P and Class R Certificate and (if the Originator is not the
Servicer) the Originator a statement setting forth the following:
(i) the amount of such distribution to Holders of each
Class of Certificates allocable to interest
(separately identifying any Unpaid Class Interest
Carry Forward Amount, Unpaid Class Basis Risk
Carryover Shortfall and Unpaid Class Realized Loss
Interest Amount included);
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(ii) the amount of such distribution to Holders of each
Class of Certificates allocable to principal
(separately identifying the aggregate amount of any
principal prepayments, any Extra Principal
Distribution Amount for the Group I Certificates and
Group II Certificates, respectively, any Class BF-2
Extra Principal Distribution Amount and payments in
respect of any Allocated Realized Loss Amounts);
(iii) the Class Interest Carry Forward Amount, Unpaid Class
Interest Carry Forward Amount (after giving effect to
any payment to be made in reduction thereof on such
Payment Date), Class Basis Risk Carryover Shortfall
and Unpaid Class Basis Risk Carryover Shortfall
(after giving effect to any payment to be made in
reduction thereof on such Payment Date), if any, for
each Class;
(iv) the Class Allocated Realized Loss Interest Amount,
Unpaid Class Realized Loss Interest Amount (after
giving effect to any payment to be made in reduction
thereof on such Payment Date) and Unpaid Class
Realized Loss Amount (after giving effect to any
payment to be made in reduction thereof on such
Payment Date), if any, for each of the Class MF,
Class BF, Class MV and Class BV Certificates;
(v) the amount, if any, by which the Formula Principal
Distribution Amount for each Class of Certificates
exceeds the principal distributed to that Class;
(vi) the Pool Factor;
(vii) the Class Principal Balance for each Class and the
notional principal amount for the Class AF-IO
Certificates and Class AV-IO Certificates, after
giving effect to the distribution of principal and
any Class Allocated Realized Loss Amount on such
Payment Date;
(viii) the Group I and Group II Pool Scheduled Principal
Balance, the Overcollateralization Amount for the
Group I and Group II Certificates and the Required
Overcollateralization Amount for the Group I and
Group II Certificates on such Payment Date;
(ix) the Cumulative Realized Losses for the Group I Loans
and the Group II Loans as of the last day of the
calendar month preceding such Payment Date;
(x) the amount of the Monthly Servicing Fee and Backup
Servicing Fee with respect to the immediately
preceding Due Period;
(xi) the Class R-III Distribution Amount (if any);
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(xii) the number and aggregate Scheduled Principal Balances
of the Group I Loans and Group II Loans that are (A)
delinquent (1) 30-59 days, (2) 60-89 days, and (3) 90
or more days, and (B) that are in bankruptcy;
(xiii) the number and aggregate Scheduled Principal Balance
of the Group I Loans and Group II Loans that became
Defaulted Loans during the immediately preceding Due
Period;
(xiv) the number and aggregate Scheduled Principal Balance
of the Group I Loans and Group II Loans that were
Defaulted Loans as of the last day of the immediately
preceding Due Period;
(xv) the number and aggregate Scheduled Principal Balance
of the Group I Loans and Group II Loans that became
Liquidated Loans during the immediately preceding Due
Period and the related Net Liquidation Losses;
(xvi) the number and aggregate Scheduled Principal Balance
of the Group I Loans and Group II Loans (x) in
foreclosure, (y) as to which foreclosure of the
related real property lien was completed during the
related Due Period, exclusive of any such Loans that
are Liquidated Loans and (z) foreclosed upon and in
the Servicer's inventory (REO); and
(xvii) the amount of Prepayment Charges collected by the
Servicer during the related Due Period and any
distribution to Holders of the Class P Certificate
allocable to Prepayment Charges.
In the case of information furnished pursuant to clauses (i) through
(viii) above, the amounts shall be expressed as a dollar amount per $1,000
denomination of each Certificate.
(c) Copies of all reports and statements provided to the Trustee for
the Certificateholders shall also be provided to the Rating Agencies and the
Class R Certificateholder.
(d) In addition, within a reasonable period of time after the end of
each calendar year, the Servicer will furnish a report to each Certificateholder
of record at any time during such calendar year as to the aggregate of amounts
reported pursuant to (i) and (ii) above for such calendar year.
SECTION 6.06 Payment of Taxes. The Servicer shall be responsible for
and agrees to prepare, make and timely file all federal, state, local or other
tax returns, information statements and other returns and documents of every
kind and nature whatsoever required to be made or filed by or on behalf of the
Trust pursuant to the Code and other applicable tax laws and regulations. Each
such return, statement and document shall, to the extent required by the Code or
other applicable law and at the request of the Servicer, be signed on behalf of
the Trust by the Trustee. The Trustee shall have no responsibility whatsoever
for the accuracy or completeness of any such return, statement or document. The
Servicer agrees to indemnify the Trustee and hold it harmless for, from, against
and in respect to any and all liability, loss, damage and expense which may be
incurred by the Trustee based upon or as a result of the Trustee's
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execution of any and all such tax returns, statements and documents. The
Servicer, if and for so long as it is a Class R Certificateholder, shall be
designated the "tax matters person" on behalf of the Trust in the same manner as
a partnership may designate a "tax matters partner," as such term is defined in
Section 6231(a)(7) of the Code. To the extent permitted by the REMIC Provisions,
any subsequent holder of the Class R Certificate, by acceptance thereof,
irrevocably designates and appoints the Servicer as its agent to perform the
responsibilities of the "tax matters person" on behalf of the Trust if, and
during such time as, the Servicer is not the holder of the Class R Certificate.
The Servicer may, at its expense if the Originator or a subsidiary or affiliate
of the Originator is the Servicer, and otherwise subject to reimbursement under
Section 5.08 and 8.04(b), retain such outside assistance as it deems necessary
in the performance of its obligations under this paragraph. The Servicer shall
provide to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of the REMICs.
Each of the Holders of the Certificates or the Class R Certificate, by
acceptance thereof, agrees to file tax returns consistent with and in accordance
with any elections, decisions or other reports made or filed with regard to
federal, state or local taxes on behalf of the Trust. The Servicer, as tax
matters person or as agent for the tax matters person, shall represent the Trust
in connection with all examinations of the Trust's affairs by tax authorities,
including resulting administrative and judicial proceedings. Each of the Holders
of the Certificates and the Class R Certificate, by acceptance thereof, agrees
to cooperate with the Servicer in such matters and to do or refrain from doing
any or all things reasonably required by the Servicer to conduct such
proceedings, provided, that, no such action shall be required by the Servicer of
any Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class R Certificateholder shall pay, on behalf of the Trust, any
foreign, federal, state or local income, property, excise, sales, receipts or
any other similar or related taxes or charges which may be imposed upon the
Master REMIC, Intermediate REMIC, or Subsidiary REMIC or otherwise and shall, to
the extent provided in Section 10.06, be entitled to be reimbursed out of the
Certificate Account or, if such tax or charge results from a failure by the
Trustee, the Originator or any Servicer to comply with the provisions of Section
2.04 or 3.07, or a failure by any Servicer to comply with the provisions of this
Section 6.06, the Trustee, the Originator or such Servicer, as the case may be,
shall indemnify the Class R Certificateholder for the payment of any such tax or
charge. The Trustee shall be entitled to withhold from amounts otherwise
distributable to the Class R Certificateholder any taxes or charges payable by
the Class R Certificateholder hereunder.
In the event the Class R Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Originator shall provide to the Internal
Revenue Service and the persons specified in Sections 860(E)(e)(5) and (6) of
the Code all information necessary for the application of Section 860E(e) and
any other applicable provision of the Code with respect to the transfer of the
Class R Certificate to such disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class R Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Originator shall, upon the written request of
persons designated in Section 860E(e)(5) of the Code, furnish to such requesting
party and the
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Internal Revenue Service information sufficient to compute the present value of
anticipated excess inclusions within 60 days of the receipt of such written
request.
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ARTICLE VII
SERVICE TRANSFER
SECTION 7.01 Events of Termination. "Event of Termination" means the
occurrence of any of the following:
(i) any failure by the Servicer to make any payment or
deposit required to be made hereunder (including an
Advance) and the continuance of such failure for a
period of four Business Days;
(ii) failure on the Servicer's part 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 specifically dealt
with) which continues unremedied for 30 days;
(iii) any assignment or delegation by the Servicer of its
duties or rights hereunder except as specifically
permitted hereunder, or any attempt to make such an
assignment or delegation;
(iv) a court 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;
(v) 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;
(vi) the failure of the Servicer to be an Eligible
Servicer;
(vii) if Conseco Finance Corp. is the Servicer, Conseco
Finance Corp.'s servicing rights under its master
seller-servicer agreement with GNMA are terminated by
GNMA; or
(viii) if Conseco Finance Corp. is the Servicer, either the
Servicer Termination Delinquency Test or the Servicer
Termination Cumulative Loss Test for any Payment Date
is not satisfied.
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SECTION 7.02 Transfer. If an Event of Termination has occurred and is
continuing, either the Trustee or Certificateholders, in the aggregate,
representing 25% or more of the Aggregate Certificate Principal Balance, by
notice in writing to the Servicer and the Backup Servicer (and to the Trustee if
given by the Certificateholders) may terminate all (but not less than all) of
the Servicer's management, administrative, servicing and collection functions
(such notice being herein called a "Service Transfer Notice" and such
termination being herein called a "Service Transfer"). On receipt of such
Service Transfer Notice (or, if later, on a date designated therein) (the date
of receipt of such Service Transfer Notice being herein called a "Service
Transfer Notice Date," and the later of the Service Transfer Notice Date or such
designated date being herein called a "Service Transfer Date"), all authority
and power of the Servicer under this Agreement, whether with respect to the
Loans, the Loan Files or otherwise (except with respect to the Certificate
Account, the transfer of which shall be governed by Section 7.06), may pass to
and be vested in the Backup Servicer, or in the event the Backup Servicer is the
Servicer being terminated or the Trustee or its designee will otherwise become
the Servicer as hereinafter provided in this Section 7.02, the Trustee or its
designee pursuant to and under this Section 7.02; and, without limitation, the
Backup Servicer, if appointed as Servicer, or the Trustee or its designee, as
appropriate, 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, and to do any and all acts or things necessary or appropriate to
effect the purposes of such Service Transfer Notice. The Trustee shall provide
the Backup Servicer (unless it is the Servicer being terminated) with a copy of
any Service Transfer Notice on the Service Transfer Notice Date. The Backup
Servicer (unless it is the Servicer being terminated) shall take over the
servicing responsibilities of the Servicer under this Agreement and become the
Servicer no later than sixty days after the Service Transfer Notice Date (if
such Service Transfer Notice appoints the Backup Servicer as the Servicer);
provided, that, if the Backup Servicer either (i) is incapable of acting as
Servicer, or (ii) fails to become the Servicer prior to the Service Transfer
Date, then the Trustee or its designee shall become the Servicer. The Trustee or
its designee, as appropriate, shall cause all assignments of mortgages, deeds of
trust or security deeds securing the Loans to be duly recorded. Each of the
Originator and the Servicer agrees to cooperate with the Backup Servicer or the
Trustee or its designee, as appropriate, in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to the Backup Servicer or the Trustee or its designee,
as appropriate, 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 Certificate Account, or for its own account in connection with
its services hereafter or thereafter received with respect to the Loans. The
Servicer shall transfer to the new servicer (i) the Servicer's records relating
to the Loans in such electronic form as the new servicer may reasonably request
and (ii) any Loan Files in the Servicer's possession.
SECTION 7.03 Trustee to Act; Appointment of Successor. On and after the
time the Servicer receives a notice of termination pursuant to Section 7.02, the
Backup Servicer (if appointed by the Trustee) or the Trustee or its designee, as
appropriate, shall be the successor in all respects to the terminated Servicer
in its capacity as servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the terminated Servicer by the terms
and provisions hereof, and the terminated Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that
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(i) neither the Backup Servicer, the Trustee, nor any
successor servicer shall assume any obligations of
the Originator pursuant to Section 3.06, and
(ii) neither the Backup Servicer, the Trustee, nor any
successor servicer shall be liable for any acts or
omissions of the terminated Servicer occurring prior
to such Service Transfer or for any breach by the
terminated Servicer of any of its obligations
contained herein or in any related document or
agreement.
As compensation therefor, the Backup Servicer or the Trustee or its designee, as
appropriate, shall be entitled to receive reasonable compensation out of the
Monthly Servicing Fee. Notwithstanding the above, the Trustee may, if it and the
Backup Servicer shall be unwilling so to act, or shall, if it and the Backup
Servicer are legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, an Eligible Servicer as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. Pending appointment of a successor to
the Servicer hereunder, unless the Trustee is prohibited by law from so acting,
the Trustee shall act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Loans as it and such
successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Certificateholders, exceed the
Monthly Servicing Fee, and in the case of the Backup Servicer, be less than the
Monthly Servicing Fee. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
SECTION 7.04 Notification to Certificateholders and Class R
Certificateholder.
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to the Backup
Servicer, to S&P, to Xxxxx'x, to the Certificateholders and to the Class R
Certificateholder at their respective addresses appearing on the Certificate
Register.
(b) Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to the Backup Servicer, to S&P, to Xxxxx'x, to the
Certificateholders and to the Class R Certificateholder at their respective
addresses appearing on the Certificate Register.
SECTION 7.05 Effect of Transfer.
(a) After the Service Transfer, the Trustee or new Servicer shall
notify Obligors to make payments directly to the new Servicer that are due under
the Loans after the effective date of the Service Transfer.
(b) After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Loans and the new Servicer shall have all of such obligations,
except (i) that the Backup Servicer shall have no responsibility or obligation
for any act or omission of the replaced Servicer and (ii) that the replaced
Servicer will transmit or cause to be transmitted directly to the new Servicer
for its own
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account, promptly on receipt and in the same form in which received, any amounts
(properly endorsed where required for the new Servicer to collect them) received
as payments upon or otherwise in connection with the Loans.
(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 Originator pursuant to Article X and Sections 3.07, 11.06 and 11.12(vi))
other than those relating to the management, administration, servicing or
collection of the Loans after the Service Transfer.
SECTION 7.06 Transfer of Certificate Account. Notwithstanding the
provisions of Section 7.02, if the Certificate Account shall be maintained with
the Servicer and an Event of Termination shall occur and be continuing, the
Servicer shall, after five days' written notice from the Trustee, or in any
event within ten days after the occurrence of the Event of Termination,
establish a new account or accounts in trust for the Certificateholders and the
Class R Certificateholder conforming with the requirements of this Agreement at
the corporate trust department of the Trustee or with an institution other than
the Servicer and promptly cause the Trustee to transfer all funds in the
Certificate Account to such new account, which shall thereafter be deemed the
Certificate Account for the purposes hereof.
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ARTICLE VIII
PAYMENTS
SECTION 8.01 Monthly Payments.
(a) Subject to the terms of this Article VIII, each Holder of a
Certificate or Class R Certificate as of a Record Date shall be paid on the next
succeeding Payment Date by check mailed to such Certificateholder or Class R
Certificateholder at the address for such Certificateholder or Class R
Certificateholder appearing on the Certificate Register (or, if such
Certificateholder holds Certificates of a Class with an aggregate Percentage
Interest of at least 5% of such Class and so requests, by wire transfer pursuant
to instructions delivered to the Trustee at least ten days prior to such Payment
Date), the sum equal to such Certificateholder's or Class R Certificateholder's
Percentage Interest of the Class AF-1 Distribution Amount, the Class AF-2
Distribution Amount, the Class AF-3 Distribution Amount, the Class AF-4
Distribution Amount, the Class AF-IO Distribution Amount, the Class MF-1
Distribution Amount, the Class MF-2 Distribution Amount, the Class BF-1
Distribution Amount, the Class BF-2 Distribution Amount, the Class AV-1
Distribution Amount, the Class AV-IO Distribution Amount, the Class MV-1
Distribution Amount, the Class MV-2 Distribution Amount, the Class BV-1
Distribution Amount, the Class BV-2, Distribution Amount, the Class B-3I
Distribution Amount, the Class P Distribution Amount and the Class R-III
Distribution Amount, as applicable. Final payment of any Certificate or the
Class R Certificate shall be made only upon presentation and surrender of such
Certificate or Class R Certificate at the office or agency of the Paying Agent.
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Book-Entry Certificates. Neither the Trustee, the Certificate Registrar, the
Seller nor the Originator shall have any responsibility therefor except as
otherwise provided by applicable law. To the extent applicable and not contrary
to the rules of the Depository, the Trustee shall comply with the provisions of
the form of the Certificates as set forth in Exhibits A through C hereto, the
Class B-3I Certificate as set forth in Exhibit I hereto and the Class R
Certificate as set forth in Exhibit Q hereto.
(c) The Trustee shall either act as the paying agent or appoint an
Eligible Institution to be the paying agent (in either such case, the "Paying
Agent") to make the payments to the Certificateholders and the Class R
Certificateholder required hereunder. The Trustee's corporate trust operations
department, with an office at 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx, Xx. Xxxx,
Xxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxx-Xxxx, shall initially act as Paying
Agent. The Trustee shall require the Paying Agent (if other than the Trustee) to
agree in writing that all amounts held by the Paying Agent for payment hereunder
will be held in trust for the benefit of the Certificateholders and the Class R
Certificateholder and that it will notify the Trustee of any
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failure by the Servicer to make funds available to the Paying Agent for the
payment of amounts due on the Certificates and the Class R Certificate.
SECTION 8.02 Advances.
(a) Not later than the Business Day immediately preceding each Payment
Date, the Servicer shall advance to the trust (each such advance, an "Advance")
all Delinquent Payments for the immediately preceding Due Period and all
preceding Due Periods by depositing the aggregate amount of such Delinquent
Payments in the Certificate Account; provided, however, that the Servicer shall
be obligated to advance Delinquent Payments for a Loan only to the extent that
the Servicer, in its sole discretion, expects to be able to recover such
Advances from subsequent collections on such Loan, including, without
limitation, Net Liquidation Proceeds and Repurchase Prices in respect of any
such Advances; and provided, further, that the Servicer will not be obligated to
advance Delinquent Payments with respect to any Loan that has become a
Liquidated Loan. If the Servicer or the Backup Servicer fails to advance all
Delinquent Payments required under this Section 8.02, the Trustee shall be
obligated to advance such Delinquent Payments pursuant to Section 11.15.
(b) The Servicer and the Trustee shall be entitled to reimbursement of
an Advance from subsequent funds available therefor in the Certificate Account
in accordance with Section 8.04(b) and Section 8.04(d).
(c) The Servicer will deposit in the Simple Interest Excess Sub-Account
on or prior to each Determination Date an amount equal to the Net Simple
Interest Excess for the preceding Due Period. The Servicer will withdraw amounts
on deposit in the Simple Interest Excess Sub-Account in respect of the Group I
Loans and Group II Loans for deposit to the Certificate Account prior to each
Payment Date to pay Net Simple Interest Shortfalls on the Group I and Group II
Loans, respectively.
(d) All funds in the Simple Interest Excess Sub-Account may be invested
in Eligible Investments. So long as no Event of Termination shall have occurred
and be continuing, any net investment earnings on funds held in the Simple
Interest Excess Sub-Account are for the account of the Servicer. The Servicer
will be required to reimburse the Simple Interest Excess Sub-Account for any net
investment losses.
SECTION 8.03 [Reserved].
SECTION 8.04 Permitted Withdrawals from the Certificate Account;
Payments.
(a) The Trustee shall, from time to time as provided herein, make
withdrawals from the Certificate Account of amounts deposited in said account
pursuant to Section 5.05 that are attributable to the Loans for the following
purposes:
(i) to pay to the Originator with respect to each Loan or
property acquired in respect thereof that has been
repurchased or replaced pursuant to Section 3.06, all
amounts received thereon and not required to be
distributed to Certificateholders as of the date on
which the related Scheduled Principal Balance or
Repurchase Price is determined;
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(ii) only on each Payment Date, prior to the Trustee's
remittance of the Amount Available pursuant to
Section 8.04(b) or 8.04(d), as applicable, to pay to
the Servicer, the Servicer's Assignee or the Advance
Financing Person, as appropriate, the amounts of any
Liquidation Expense as to which Related Proceeds, net
of any Liquidation Expense previously reimbursed
pursuant to this Section 8.04(a) with respect to the
related Loan, exceed such Liquidation Expense;
(iii) to withdraw any amount deposited in the Certificate
Account that was not required to be deposited
therein;
(iv) to make any rebates or adjustments deemed necessary
by the Servicer pursuant to Section 5.06(d), but not
out of collections in respect of any Loan that
constitute Related Proceeds, to the extent a
Liquidation Expense has been paid by the Servicer
with respect to that Loan which has not yet been
reimbursed; or
(v) to make payments in the amounts and in the manner
provided for in clauses (b) through (f) of Section
8.04.
(b) On each Payment Date, the Trustee shall make the following
distributions by 11:00 a.m. (New York time) of the Group I Amount Available
remaining after payment of the amounts specified in Section 8.04(a)(i)-(iv) in
respect of the Group I Loans, for such Payment Date in the following order of
priority, subject to Section 8.04(g):
(i) Servicing Fee, Backup Servicing Fee and Trustee Fee.
To pay the Monthly Servicing Fee and any other
compensation owed to the Servicer pursuant to Section
5.08 or Section 11.06 and, to the extent not payable
by the Originator, the Seller or the Servicer under
this Agreement or, if so payable, not paid thereby,
to pay the Backup Servicing Fee and any other fees,
expenses or indemnification owed to the Backup
Servicer pursuant to this Agreement (provided that
any such indemnification paid pursuant to this
Section 8.04(b)(i) and Section 8.04(d)(i) shall not
exceed $100,000 during any 12-month period or
$1,000,000 in the aggregate) and the Trustee Fee and
any other compensation owed to the Trustee pursuant
to Section 11.06 (in each case to the extent
attributable to Group I Loans and, if not
attributable specifically to Group I or Group II
Loans, to be allocated as between the Group I and
Group II Amount Available pro rata based on the
respective Group I and Group II Pool Scheduled
Principal Balance);
(ii) Advances. To reimburse the Servicer or Trustee or pay
to the Servicer's Assignee, as appropriate, for
Advances made with respect to Delinquent Payments on
Group I Loans for prior Payment Dates, (A) from that
portion of the Group I Amount Available representing
collections with respect to the related Group I Loan
or (B) from any portion of the Group I Amount
Available to the extent necessary to reimburse the
Servicer or
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Trustee or pay to the Servicer's Assignee, as
appropriate, for Advances in respect of Group I Loans
that the Servicer or the Trustee, as applicable, does
not expect to recover from subsequent collections on
the related Loan;
(iii) Class AF and Class AF-IO Interest. The Class AF
Current Interest Amount and the Class AF-IO Current
Interest Amount, to the Class AF and Class AF-IO
Certificates concurrently (or, if the remaining Group
I Amount Available is not sufficient to pay such
amounts in full, such remaining amount pro rata among
the Class AF Certificates and the Class AF-IO
Certificates based upon the ratio of (x) the Class
Current Interest Amount for each such Class to (y)
the aggregate of the Class Current Interest Amount
for all such Classes);
(iv) Class MF-1 Interest. The Class MF-1 Current Interest
Amount to the Class MF-1 Certificates;
(v) Class MF-2 Interest. The Class MF-2 Current Interest
Amount to the Class MF-2 Certificates;
(vi) Class BF-1 Interest. The Class BF-1 Current Interest
Amount to the Class BF-1 Certificates;
(vii) Class BF-2 Interest. The Class BF-2 Current Interest
Amount to the Class BF-2 Certificates;
(viii) Class AF Principal. The Class AF Formula Principal
Distribution Amount to the Class AF Certificates in
the following order of priority:
(A) to the Class AF-1 Certificates until the
Class AF-1 Principal Balance has been
reduced to zero;
(B) to the Class AF-2 Certificates, until the
Class AF-2 Principal Balance has been
reduced to zero;
(C) to the Class AF-3 Certificates, until the
Class AF-3 Principal Balance has been
reduced to zero; and
(D) to the Class AF-4 Certificates, until the
Class AF-4 Principal Balance has been
reduced to zero;
(ix) Class MF-1 Principal. The Class MF-1 Formula
Principal Distribution Amount to the Class MF-1
Certificates until the Class MF-1 Principal Balance
has been reduced to zero;
(x) Class MF-2 Principal. The Class MF-2 Formula
Principal Distribution Amount to the Class MF-2
Certificates until the Class MF-2 Principal Balance
has been reduced to zero;
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(xi) Class BF-1 Principal. The Class BF-1 Formula
Principal Distribution Amount to the Class BF-1
Certificates until the Class BF-1 Principal Balance
has been reduced to zero;
(xii) Class BF-2 Principal. The Class BF-2 Formula
Principal Distribution Amount to the Class BF-2
Certificates until the Class BF-2 Principal Balance
has been reduced to zero;
(c) The Trustee shall make the following deposits and distributions by
11:00 a.m. (New York time), to the extent of the Group I Excess Cashflow, plus
the amount, if any, described in Section 8.04(e)(xii), for such Payment Date and
in the following order of priority:
(i) Extra Principal Distribution Amount. To the Class AF,
Class MF and Class BF Certificates, the Extra
Principal Distribution Amount for the Group I
Certificates in the order provided in clause (viii)
through (xii) of Section 8.04(b);
(ii) Unpaid Class AF and Class AF-IO Interest Carry
Forward Amounts. The Unpaid Class AF Interest Carry
Forward Amount and the Unpaid Class AF-IO Interest
Carry Forward Amount, to the Class AF and Class AF-IO
Certificates concurrently in accordance with their
respective Unpaid Class Interest Carry Forward
Amounts (or, if the amount remaining is not
sufficient to pay such amounts in full, pro rata
among the Class AF Certificates and the Class AF-IO
Certificates based upon the ratio of (x) the Unpaid
Class Interest Carry Forward Amount for each such
Class to (y) the aggregate of the Unpaid Class
Interest Carry Forward Amount for all such Classes);
(iii) Unpaid Class MF-1 Interest Carry Forward Amount. The
Unpaid Class MF-1 Interest Carry Forward Amount, to
the Class MF-1 Certificates;
(iv) Unpaid Class MF-1 Realized Loss Interest Amount and
Unpaid Class MF-1 Realized Loss Amount. The Unpaid
Class MF-1 Realized Loss Interest Amount and then the
Unpaid Class MF-1 Realized Loss Amount, to the Class
MF-1 Certificates;
(v) Unpaid Class MF-2 Interest Carry Forward Amount. The
Unpaid Class MF-2 Interest Carry Forward Amount, to
the Class MF-2 Certificates;
(vi) Unpaid Class MF-2 Realized Loss Interest Amount and
Unpaid Class MF-2 Realized Loss Amount. The Unpaid
Class MF-2 Realized Loss Interest Amount and then the
Unpaid Class MF-2 Realized Loss Amount, to the Class
MF-2 Certificates;
(vii) Unpaid Class BF-1 Interest Carry Forward Amount. The
Unpaid Class BF-1 Interest Carry Forward Amount, to
the Class BF-1 Certificates;
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(viii) Unpaid Class BF-1 Realized Loss Interest Amount and
Unpaid Class BF-1 Realized Loss Amount. The Unpaid
Class BF-1 Realized Loss Interest Amount and then the
Unpaid Class BF-1 Realized Loss Amount, to the Class
BF-1 Certificates;
(ix) Unpaid Class BF-2 Interest Carry Forward Amount. The
Unpaid Class BF-2 Interest Carry Forward Amount, to
the Class BF-2 Certificates;
(x) Unpaid Class BF-2 Realized Loss Interest Amount and
Unpaid Class BF-2 Realized Loss Amount. The Unpaid
Class BF-2 Realized Loss Interest Amount and then the
Unpaid Class BF-2 Realized Loss Amount, to the Class
BF-2 Certificates;
(xi) Unpaid Basis Risk Carryover Shortfall. From amounts
otherwise payable to the Class B-3I Certificates on
such Payment, to the Basis Risk Reserve Fund, Group I
Subaccount, the sum of all Unpaid Basis Risk
Carryover Shortfalls for the Class AF, Class AF-IO,
Class MF-1, Class MF-2, Class BF-1 and Class BF-2
Certificates;
(xii) Backup Servicer. To the Backup Servicer any
indemnification owed to it and not paid pursuant to
Section 8.04(b)(i), 8.04(d)(ii) or 8.04(e)(xiii);
(xiii) Class B-F2 Extra Principal Distribution Amount. To
the Class BF-2 Certificates, the lesser of
(A) any Group I Excess Cashflow remaining after
payment of the amounts described in clauses
(i) through (xii), above, and
(B) the Class BF-2 Principal Balance, less
distributions of principal to the Class BF-2
Certificates pursuant to Sections
8.04(b)(xii) and 8.04(c)(i) on such Payment
Date.
(d) On each Payment Date, the Trustee shall make the following
distributions by 11:00 a.m. (New York time) of the Group II Amount Available
remaining, after payment of the amounts specified in Section 8.04(a)(i)-(iv) in
respect of the Group II Loans, for such Payment Date in the following order of
priority, subject to Section 8.04(g):
(i) Servicing Fee, Backup Servicing Fee and Trustee Fee.
To pay the Monthly Servicing Fee and any other
compensation owed to the Servicer pursuant to Section
5.08 or Section 11.06 and, to the extent not payable
by the Originator, the Seller or the Servicer under
this Agreement or, if so payable, not paid thereby,
to pay the Backup Servicing Fee and any other fees,
expenses or indemnification owed to the Backup
Servicer pursuant to this Agreement (provided that
any such indemnification paid pursuant to this
Section 8.04(d)(i) and Section 8.04(b)(i) shall not
exceed $100,000 during any 12-month period or
$1,000,000 in the aggregate) and the Trustee Fee and
any other compensation owed to the Trustee pursuant
to Section 11.06 (in each case to the extent
attributable to the Group II Loans
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and, if not attributable specifically to Group II or
Group I Loans, to be allocated as between the Group
II and Group I Amount Available pro rata based on the
respective Group II and Group I Pool Scheduled
Principal Balance);
(ii) Advances. To reimburse the Servicer or Trustee or pay
to the Servicer's Assignee, as appropriate, for
Advances made with respect to Delinquent Payments on
Group II Loans for prior Payment Dates, (A) from that
portion of the Group II Amount Available representing
collections with respect to the related Group II Loan
or (B) from any portion of the Group II Amount
Available to the extent necessary to reimburse the
Servicer or Trustee or pay to the Servicer's
Assignee, as appropriate, for Advances in respect of
Group II Loans that the Servicer or the Trustee, as
applicable, does not expect to recover from
subsequent collection on the related Loan;
(iii) Class AV and Class AV-IO Interest. The Class AV
Current Interest Amount and the Class AV-IO Current
Interest Amount, to the Class AV and Class AV-IO
Certificates concurrently (or, if the remaining Group
II Amount Available is not sufficient to pay such
amounts in full, such remaining amount pro rata among
the Class AV Certificates and the Class AV-IO
Certificates based upon the ratio of (x) the Class
Current Interest Amount for each such Class to (y)
the aggregate of the Class Current Interest Amount
for all such Classes);
(iv) Class MV-1 Interest. The Class MV-1 Current Interest
Amount to the Class MV-1 Certificates;
(v) Class MV-2 Interest. The Class MV-2 Current Interest
Amount to the Class MV-2 Certificates;
(vi) Class BV-1 Interest. The Class BV-1 Current Interest
Amount to the Class BV-1 Certificates;
(vii) Class BV-2 Interest. The Class BV-2 Current Interest
Amount to the Class BV-2 Certificates;
(viii) Class AV Principal. The Class AV Formula Principal
Distribution Amount to the Class AV Certificates
until the Class AV-1 Principal Balance has been
reduced to zero;
(ix) Class MV-1 Principal. The Class MV-1 Formula
Principal Distribution Amount to the Class MV-1
Certificates until the Class MV-1 Principal Balance
has been reduced to zero;
(x) Class MV-2 Principal. The Class MV-2 Formula
Principal Distribution Amount to the Class MV-2
Certificates until the Class MV-2 Principal Balance
has been reduced to zero;
8-7
(xi) Class BV-1 Principal. The Class BV-1 Formula
Principal Distribution Amount to the Class BV-1
Certificates until the Class BV-1 Principal Balance
has been reduced to zero; and
(xii) Class BV-2 Principal. The Class BV-2 Formula
Principal Distribution Amount to the Class BV-2
Certificates until the Class BV-2 Principal Balance
has been reduced to zero.
(e) The Trustee shall make the following deposits and distributions by
11:00 a.m. (New York time), to the extent of the Group II Excess Cashflow for
such Payment Date and in the following order of priority:
(i) Extra Principal Distribution Amount. To the Class AV,
Class MV and Class BV Certificates, the Extra
Principal Distribution Amount for the Group II
Certificates in the order provided in clause (viii)
through (xii) of Section 8.04(d);
(ii) Unpaid Class AV and Class AV-IO Interest Carry
Forward Amounts. The Unpaid Class AV Interest Carry
Forward Amount and the Unpaid Class AV-IO Interest
Carry Forward Amount, to the Class AV and Class AV-IO
Certificates concurrently in accordance with their
respective Unpaid Class Interest Carry Forward
Amounts (or, if the amount remaining is not
sufficient to pay such amounts in full, pro rata
among the Class AV Certificates and the Class AV-IO
Certificates based upon the ratio of (x) the Unpaid
Class Interest Carry Forward Amount for each such
Class to (y) the aggregate of the Unpaid Class
Interest Carry Forward Amount for all such Classes);
(iii) Unpaid Class MV-1 Interest Carry Forward Amount. The
Unpaid Class MV-1 Interest Carry Forward Amount, to
the Class MV-1 Certificates;
(iv) Unpaid Class MV-1 Realized Loss Interest Amount and
Unpaid Class MV-1 Realized Loss Amount. The Unpaid
Class MV-1 Realized Loss Interest Amount and then the
Unpaid Class MV-1 Realized Loss Amount, to the Class
MV-1 Certificates;
(v) Unpaid Class MV-2 Interest Carry Forward Amount. The
Unpaid Class MV-2 Interest Carry Forward Amount, to
the Class MV-2 Certificates;
(vi) Unpaid Class MV-2 Realized Loss Interest Amount and
Unpaid Class MV-2 Realized Loss Amount. The Unpaid
Class MV-2 Realized Loss Interest Amount and then the
Unpaid Class MV-2 Realized Loss Amount, to the Class
MV-2 Certificates;
(vii) Unpaid Class BV-1 Interest Carry Forward Amount. The
Unpaid Class BV-1 Interest Carry Forward Amount, to
the Class BV-1 Certificates;
8-8
(viii) Unpaid Class BV-1 Realized Loss Interest Amount and
Unpaid Class BV-1 Realized Loss Amount. The Unpaid
Class BV-1 Realized Loss Interest Amount and then the
Unpaid Class BV-1 Realized Loss Amount, to the Class
BV-1 Certificates;
(ix) Unpaid Class BV-2 Interest Carry Forward Amount. The
Unpaid Class BV-2 Interest Carry Forward Amount, to
the Class BV-2 Certificates;
(x) Unpaid Class BV-2 Realized Loss Interest Amount and
Unpaid Class BV-2 Realized Loss Amount. The Unpaid
Class BV-2 Realized Loss Interest Amount and then the
Unpaid Class BV-2 Realized Loss Amount, to the Class
BV-2 Certificates;
(xi) Unpaid Basis Risk Carryover Shortfall. From amounts
otherwise payable to the Class B-3I Certificates on
such Payment Date, to the Basis Risk Reserve Fund,
Group II Subaccount, the sum of all Unpaid Basis Risk
Carryover Shortfalls for the Class AV, Class AV-IO,
Class MV-1, Class MV-2, Class BV-1 and Class BV-2
Certificates, after taking into account (with respect
to the Class AV, Class MV-1, Class MV-2, Class BV-1
and Class BV-2 Certificates) any amounts to be
applied to the payment thereof in accordance with
Section 8.09 hereof;
(xii) Group I Shortfall. To the Trustee for distribution to
the Group I Certificateholders in accordance with
Section 8.04(e), the lesser of
(A) any Group II Excess Cashflow remaining after
payment of the amounts described in clauses
(i) through (xi) of Section 8.04(e) and
(B) the sum of the amount, if any, by which the
Group I Amount Available is insufficient to
pay the Class AF, Class AF-IO, Class MF and
Class BF Current Interest Amounts and the
amount, if any, by which the Group I Excess
Cashflow is insufficient to pay amounts
described in clauses (i) through (xi) of
Section 8.04(e); and
(xiii) Backup Servicer. To the Backup Servicer any
indemnification owed to it and not paid pursuant to
Section 8.04(d)(i), 8.04(b)(i) or 8.04(c)(xii).
(f) Remaining Excess Cashflow. On each Payment Date, the Trustee shall
make the following distributions by 11:00 a.m. (New York time) from the
Remaining Excess Cashflow for such Payment Date in the following order of
priority:
(i) Class P and Class B-3I Certificates.
(A) To the Class P Certificate, an amount equal
to the aggregate Prepayment Charges not
paid to the Class P Certificate on prior
Payment Dates; and
8-9
(B) To the Class B-3I Certificateholders the
Class B-3I Distribution Amount;
(ii) Class P Certificate. Provided the Payment Date is one
subsequent to the month in which Prepayment Charges
are no longer collectible on any Loan, to the Class P
Certificateholder any amount payable to the Class P
Certificateholder in respect of principal pursuant to
Section 8.07(f); and
(iii) Class R Certificate. The balance, if any, of the
Remaining Excess Cashflow
(A) first, to the Class R Certificateholder, as
reimbursement for any taxes or charges paid
by the Class R Certificateholder pursuant to
Section 6.06, and
(B) any remainder to the Class R
Certificateholder in respect of the Class
R-III Interest.
(g) Notwithstanding the priorities set forth above, any Pre-Funded
Group I Amount and Pre-Funded Group II Amount deposited in the Certificate
Account shall be applied solely to pay principal of the Class AF-1 and Class
AV-1 Certificates, respectively, until reduced to zero, and any amount withdrawn
from the Capitalized Interest Account and deposited in the Certificate Account
shall be applied solely as described in Section 8.11.
(h) If the Trustee shall not have received the applicable Monthly
Report by any Payment Date, the Trustee shall, in accordance with this Section
8.04, distribute all funds then in the Certificate Account to
Certificateholders, to the extent of such funds, on such Payment Date.
SECTION 8.05 Reassignment of Repurchased and Replaced Loans. Upon
receipt by the Trust, by deposit in the Certificate Account, of the Repurchase
Price under Section 3.06(a), or upon receipt by the Trust of an Eligible
Substitute Loan under Section 3.06(b) and receipt by the Trust, by deposit in
the Certificate Account, of any additional amount under Section 3.06(b)(vi), and
upon receipt of a certificate of a Servicing Officer in the form attached hereto
as Exhibit J-1 or J-2, as applicable, the Trustee shall convey and assign to the
Originator all of the Certificateholders' right, title and interest in the
repurchased Loan or Replaced Loan 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 the Trustee. Upon such deposit of the Repurchase Price
or receipt of such Eligible Substitute Loan and related deposit of any
additional amount under Section 3.06(b)(vi), the Servicer shall be deemed to
have released any claims to such Loan as a result of Advances with respect to
such Loan.
SECTION 8.06 Class R Certificateholder's Purchase Option.
(a) Beginning on the Payment Date when the condition set forth in
subsection (b)(i) hereof is satisfied as of the last day of the related Due
Period, the Class R Certificateholder shall, subject to subsection (b) hereof,
have the option to purchase all of the Loans and all property acquired in
respect of any Loan remaining in the Trust at a price (such price being referred
to as the "Minimum Purchase Price") equal to the greater of:
8-10
(i) the sum of (A) 100% of the principal balance
of each Loan (other than any Loan as to
which title to the underlying property has
been acquired and whose fair market value is
included pursuant to clause (y) below),
together with accrued and unpaid interest on
each such Loan at a rate per annum equal to
the Weighted Average Pass-Through Rate, plus
(B) the fair market value of such acquired
property (as reasonably determined by the
Servicer as of the close of business on the
third Business Day preceding the date of
such purchase), and
(ii) the Aggregate Certificate Principal Balance
as of the date of such purchase (less any
amounts on deposit in the Certificate
Account on such purchase date and
representing payments of principal in
respect of the Loans) plus an amount
necessary to pay the Class AF Current
Interest Amount, any Unpaid Class AF
Interest Carry Forward Amount, any Unpaid
Class AF Basis Risk Carryover Shortfall, the
Class AF-IO Current Interest Amount, any
Unpaid Class AF-IO Interest Carry Forward
Amount, the Class MF-1 Current Interest
Amount, any Unpaid Class MF-1 Interest Carry
Forward Amount, any Class MF-1 Realized Loss
Interest Amount, any Class MF-1 Realized
Loss Amount, any Unpaid Class MF-1 Basis
Risk Carryover Shortfall, the Class MF-2
Current Interest Amount, any Unpaid Class
MF-2 Interest Carry Forward Amount, any
Class MF-2 Realized Loss Interest Amount,
any Class MF-2 Realized Loss Amount, any
Unpaid Class MF-2 Basis Risk Carryover
Shortfall, the Class BF-1 Current Interest
Amount, any Unpaid Class BF-1 Interest Carry
Forward Amount, any Class BF-1 Realized Loss
Interest Amount, any Class BF-1 Realized
Loss Amount, any Unpaid Class BF-1 Basis
Risk Carryover Shortfall, the Class BF-2
Current Interest Amount, any Unpaid Class
BF-2 Interest Carry Forward Amount, any
Class BF-2 Realized Loss Interest Amount,
any Class BF-2 Realized Loss Amount, any
Unpaid Class BF-2 Basis Risk Carryover
Shortfall, the Class AV Current Interest
Amount, any Unpaid Class AV Interest Carry
Forward Amount, any Unpaid Class AV-1 Basis
Risk Carryover Shortfall, the Class AV-IO
Current Interest Amount, any Unpaid Class
AV-IO Interest Carry Forward Amount, the
Class MV-1 Current Interest Amount, any
Unpaid Class MV-1 Interest Carry Forward
Amount, any Class MV-1 Realized Loss
Interest Amount, any Class MV-1 Realized
Loss Amount, any Unpaid Class MV-1 Basis
Risk Carryover Shortfall, the Class MV-2
Current Interest Amount, any Unpaid Class
MV-2 Interest Carry Forward Amount, any
Class MV-2 Realized Loss Interest Amount,
any Class MV-2 Realized Loss Amount, any
Unpaid Class MV-2 Basis Risk Carryover
Shortfall, the Class BV-1 Current Interest
Amount, any Unpaid Class BV-1 Interest
8-11
Carry Forward Amount, any Class BV-1
Realized Loss Interest Amount, any Class
BV-1 Realized Loss Amount, any Unpaid Class
BV-1 Basis Risk Carryover Shortfall, the
Class BV-2 Current Interest Amount, any
Unpaid Class BV-2 Interest Carry Forward
Amount, any Class BV-2 Realized Loss
Interest Amount, any Class BV-2 Realized
Loss Amount, any Unpaid Class BV-2 Basis
Risk Carryover Shortfall and the Class B-3I
Distribution Amount due on the Payment Date
occurring in the calendar month following
such purchase date (less any amounts on
deposit in the Certificate Account on such
purchase date and representing payments of
interest in respect of the Loans at a rate
per annum equal to the Weighted Average
Pass-Through Rate).
If the option to purchase the Loans is then held by the Class R
Certificateholder, the Minimum Purchase Price on a Payment Date on
which all Loans will be purchased and all Certificates paid shall not
exceed the sum of (x) the purchase price described above plus (y) if
the Class R Certificateholder is not the Class B-3I Certificateholder,
the Class B-3I Distribution Amount for such Payment Date (otherwise
zero).
(b) The purchase by the Class R Certificateholder of all of the Loans
pursuant to this Section 8.06 shall be conditioned upon:
(i) the Aggregate Certificate Principal Balance at the
time of any such purchase aggregating not more than
10% of the Original Aggregate Certificate Principal
Balance,
(ii) such purchase being made pursuant to a plan of
complete liquidation in accordance with Section 860F
of the Code, as provided in Section 12.04, and
(iii) the Class R Certificateholder having provided the
Trustee, the Servicer, the Backup Servicer and the
Depository (if any) with at least 30 days' written
notice specifying the purchase date and setting forth
its calculations of the purchase price.
(c) The Trustee shall acknowledge in writing its receipt of notice
given under Section 8.06(b). On the purchase date specified in its notice, the
Class R Certificateholder shall deliver the Minimum Purchase Price and the
amount specified in Section 8.06(b)(v) to the Trustee, in immediately available
funds, and deposit the purchase price in the Certificate Account for
distribution in accordance with Section 12.04, and the Trustee and the Servicer
shall release to the Class R Certificateholder the Loan Files for all the
purchased Loans. The Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate such transfer.
(d) The Class R Certificateholder may assign its rights under this
Section 8.06, separately from its other rights as Holder of the Class R
Certificate, by giving written notice of such assignment to the Trustee and the
Servicer. Following the Trustee's receipt of such notice
8-12
of assignment, the Trustee shall recognize only such assignee (or its assignee
in turn) as the Person entitled to exercise the purchase option set forth in
Section 8.06(a).
(e) The Servicer shall notify the Trustee, any assignee described in
Section 8.06(d), and the Class R Certificateholder (whether or not the Class R
Certificateholder has then assigned its rights under this Section 8.06 pursuant
to subsection (d)), no later than two Business Days after the Determination Date
occurring in the first Due Period which includes the date on which the Aggregate
Certificate Principal Balance first becomes less than or equal to 10% of the
Aggregate Certificate Principal Balance, to the effect that the Aggregate
Certificate Principal Balance, is then less than or equal to 10% of the
Aggregate Certificate Principal Balance.
SECTION 8.07 Intermediate REMIC and Subsidiary REMIC Distributions.
(a) Intermediate Group I. On each Payment Date, the Uncertificated
Intermediate Group I Interests (or other appropriate Interest or account as the
context implies) shall receive distributions, to the extent of the Group I
Amount Available, in the following order of priority:
(i) Interest. To each such Class, pro rata based on its
respective entitlement, accrued interest as follows:
(A) To each Class other than the Class I-AF-IO
Interests, one-twelfth of the Intermediate
Adjusted Group I Net WAC Cap Rate times the
Intermediate Interest Principal Balance of
such Class; provided, that interest accrued
on the Class I-F Accrual Interest shall be
paid as principal to the Intermediate REMIC
Group I Accretion Directed Interests
pursuant to Section 8.07(a)(ii), and added
to the Intermediate Interest Principal
Balance of the Class I-F Accrual Interest,
in an amount equal to the sum of (x)
one-half the sum of the Extra Principal
Distribution Amount for the Group I
Certificates and any Class BF-2 Extra
Principal Distribution Amount for that
Payment Date plus (y) any amount by which
one-half the aggregate of such Extra
Principal Distribution Amounts and Class
BF-2 Extra Principal Distribution Amounts on
prior Payment Dates exceeds the aggregate
amount so paid to the Intermediate REMIC
Group I Accretion Directed Interests and
added to the Class I-F Accrual Interest
(such excess not to accrue interest);
(B) To each Class I-AF-IO Interest, interest
equal to the sum of:
(1) with respect to the Class
I-AF-IO(1) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(1) Interest from and including
the Closing Date through the
October 2002 Payment Date, and (B)
0.0% thereafter;
(2) with respect to the Class
I-AF-IO(2) Interest, interest (A)
at the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(2) Interest
8-13
from and including the Closing Date
through the January 2003 Payment
Date and (B) 0.0% thereafter;
(3) with respect to the Class
I-AF-IO(3) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(3) Interest from and including
the Closing Date through the April
2003 Payment Date, and (B) 0.0%
thereafter;
(4) with respect to the Class
I-AF-IO(4) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(4) Interest from and including
the Closing Date through the July
2003 Payment Date, and (B) 0.0%
thereafter;
(5) with respect to the Class
I-AF-IO(5) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(5) Interest from and including
the Closing Date through the
October 2003 Payment Date, and (B)
0.0% thereafter;
(6) with respect to the Class
I-AF-IO(6) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(6) Interest from and including
the Closing Date through the
January 2004 Payment Date, and (B)
0.0% thereafter;
(7) with respect to the Class
I-AF-IO(7) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(7) Interest from and including
the Closing Date through the April
2004 Payment Date, and (B) 0.0%
thereafter;
(8) with respect to the Class
I-AF-IO(8) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(8) Interest from and including
the Closing Date through the July
2004 Payment Date, and (B) 0.0%
thereafter;
(9) with respect to the Class
I-AF-IO(9) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(9) Interest from and including
the Closing Date through the
October 2004 Payment Date, and (B)
0.0% thereafter;
(10) with respect to the Class
I-AF-IO(10) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary
8-14
Interest Adjusted Principal Balance
of the Class S-2F(10) Interest from
and including the Closing Date
through the January 2005 Payment
Date, and (B) 0.0% thereafter;
(11) with respect to the Class
I-AF-IO(11) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(11) Interest from and
including the Closing Date through
the April 2005 Payment Date, and
(B) 0.0% thereafter;
(12) with respect to the Class
I-AF-IO(12) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(12) Interest from and
including the Closing Date through
the July 2005 Payment Date, and (B)
0.0% thereafter;
(13) with respect to the Class
I-AF-IO(13) Interest, interest at
(A) the Class I-AF-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2F(13) Interest from and
including the Closing Date through
the October 2005 Payment Date, and
(B) 0.0% thereafter;
(C) any Unpaid Intermediate Interest Shortfall
with respect to such Class.
(ii) Principal. To the Class I-F Accrual Interest,
principal in an amount equal to one-half the
principal distributed on the Class AF, Class MF and
Class BF Certificates on such Payment Date; and to
each Intermediate REMIC Group I Accretion Directed
Interest, principal (including that payable to the
Intermediate REMIC Group I Accretion Directed
Interests as described in Section 8.07(a)(i)(A)) in
an amount equal to one-half the principal distributed
to its Corresponding Certificate Class on such
Payment Date. Realized losses shall be allocated to
each Class of Uncertificated Intermediate Group I
Interests in an amount sufficient to reduce the
Intermediate REMIC Principal Balance of
(A) the Class I-F Accrual Interest to one-half
the sum of (1) the Group I Pool Scheduled
Principal Balance, (2) the Pre-Funded Group
I Amount and (3) the Overcollateralization
Amount for the Group I Certificates, and
(B) each Class of Intermediate REMIC Group I
Accretion Directed Interests to one-half the
Class Principal Balance of its Corresponding
Certificate Class after giving effect to
distributions on such Payment Date.
(b) Intermediate Group II. On each Payment Date, the Uncertificated
Intermediate Group II Interests (or other appropriate Interest or account as the
context implies) shall receive distributions, to the extent of the Group II
Amount Available, in the following order of priority:
(i) Interest. To each such Class, pro rata based on its
respective entitlement, accrued interest as follows:
8-15
(A) To each such Class other than the Class
I-AV-IO Interests, one-twelfth of the
Intermediate Adjusted Group II Net WAC Cap
Rate times the Intermediate Interest
Principal Balance of such Class; provided,
that, interest accrued on the Class I-V
Accrual Interest shall be paid as principal
to the Intermediate REMIC Group II Accretion
Directed Interests pursuant to Section
8.07(b)(ii), and added to the Intermediate
Interest Principal Balance of the Class I-V
Accrual Interest, in an amount equal to the
sum of (x) one-half the sum of the Extra
Principal Distribution Amount for the Group
II Certificates for that Payment Date plus
(y) any amount by which one-half the
aggregate of such Extra Principal
Distribution Amounts on prior Payment Dates
exceeds the aggregate amount so paid to the
Intermediate REMIC Group II Accretion
Directed Interests and added to the Class
I-V Accrual Interest (such excess not to
accrue interest);
(B) To each Class I-AV-IO Interest, interest
equal to the sum of:
(1) with respect to the Class I-AV-IO(1)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(1) Interest from and including
the Closing Date through the October
2002 Payment Date, and (B) 0.0%
thereafter;
(2) with respect to the Class I-AV-IO(2)
Interest, interest (A) at the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(2) Interest from and including
the Closing Date through the January
2003 Payment Date and (B) 0.0%
thereafter;
(3) with respect to the Class I-AV-IO(3)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(3) Interest from and including
the Closing Date through the April
2003 Payment Date, and (B) 0.0%
thereafter;
(4) with respect to the Class I-AV-IO(4)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(4) Interest from and including
the Closing Date through the July
2003 Payment Date, and (B) 0.0%
thereafter;
(5) with respect to the Class I-AV-IO(5)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(5) Interest from and including
the Closing Date through the October
2003 Payment Date, and (B) 0.0%
thereafter;
8-16
(6) with respect to the Class I-AV-IO(6)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(6) Interest from and including
the Closing Date through the January
2004 Payment Date, and (B) 0.0%
thereafter;
(7) with respect to the Class I-AV-IO(7)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(7) Interest from and including
the Closing Date through the April
2004 Payment Date, and (B) 0.0%
thereafter;
(8) with respect to the Class I-AV-IO(8)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(8) Interest from and including
the Closing Date through the July
2004 Payment Date, and (B) 0.0%
thereafter;
(9) with respect to the Class I-AV-IO(9)
Interest, interest at (A) the Class
I-AV-IO Interest Rate on the
Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(9) Interest from and including
the Closing Date through the October
2004 Payment Date, and (B) 0.0%
thereafter;
(10) with respect to the Class
I-AV-IO(10) Interest, interest at
(A) the Class I-AV-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(10) Interest from and including
the Closing Date through the January
2005 Payment Date, and (B) 0.0%
thereafter;
(11) with respect to the Class
I-AV-IO(11) Interest, interest at
(A) the Class I-AV-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(11) Interest from and including
the Closing Date through the April
2005 Payment Date, and (B) 0.0%
thereafter;
(12) with respect to the Class
I-AV-IO(12) Interest, interest at
(A) the Class I-AV-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(12) Interest from and including
the Closing Date through the July
2005 Payment Date, and (B) 0.0%
thereafter;
(13) with respect to the Class
I-AV-IO(13) Interest, interest at
(A) the Class I-AV-IO Interest Rate
on the Subsidiary Interest Adjusted
Principal Balance of the Class
S-2V(13) Interest from and including
the Closing Date through the October
2005 Payment Date, and (B) 0.0%
thereafter;
8-17
(C) any Unpaid Intermediate Interest Shortfall
with respect to such Class.
(ii) Principal. To the Class I-V Accrual Interest,
principal in an amount equal to one-half the
principal distributed on the Class AV, Class MV and
Class BV, Certificates on such Payment Date; and to
each Intermediate REMIC Group II Accretion Directed
Interest, principal (including that payable to the
Intermediate REMIC Group II Accretion Directed
Interests as described in Section 8.07(b)(i)(A)) in
an amount equal to one-half the principal distributed
to its Corresponding Certificate Class on such
Payment Date. Realized losses shall be allocated to
each Class of Uncertificated Group II Intermediate
Interests in an amount sufficient to reduce the
Intermediate REMIC Principal Balance of
(A) the Class I-V Accrual Interest to one-half
the sum of (1) the Group II Pool Scheduled
Principal Balance, (2) the Pre-Funded Group
II Amount and (3) the Overcollateralization
Amount for the Group II Certificates, and
(B) each Class of Intermediate REMIC Group II
Accretion Directed Interests to one-half the
Class Principal Balance of its Corresponding
Certificate Class after giving effect to
distributions on such Payment Date.
(c) Class R-II. To the holder of the Class R-II Interest, any remaining
Amount Available after payments in accordance with Sections 8.07(a) and (b).
(d) S-1F and S-2F Subsidiary. On each Payment Date, the Class S-1F and
S-2F Uncertificated Subsidiary Interests (or other appropriate Interest or
account as the context implies) shall receive distributions, to the extent of
the Group I Amount Available, in the following order of priority, provided,
however, that Prepayment Charges shall be paid to the Class P Certificateholder
under Section 8.07(f):
(i) Payment of the Trustee Fee, the Servicing Fee, the Backup
Servicing Fee and other items specified in Section 8.04(b)(i)
and reimbursement of Advances pursuant to Section 8.04(b)(ii);
(ii) Each Class of Class S-1F and S-2F Uncertificated Subsidiary
Interests shall receive distributions of interest, pro rata
based on their respective entitlements, in an amount equal to
(y) one-twelfth of the Group I Net WAC Cap Rate times the
Subsidiary Interest Adjusted Principal Balance of such Class,
plus (z) any Unpaid Subsidiary Interest Shortfall with respect
to such Class;
(iii) Distributions of principal shall be made to each Class S-1F
and Class S-2F Interest sequentially, i.e., first to the Class
S-1F Interest, second to the Class S-2F(1) Interest, and last
(after each other Class S-2F Interest) to the Class S-2F(13)
Interest, in each instance up to an amount equal to the
respective Subsidiary Interest Adjusted Principal Balance.
(iv) On each Payment Date, Realized Losses in respect of the Group
I Loans shall be applied as follows: the amount by which the
aggregate Subsidiary Interest Principal Balance of the Class
S-1F and S-2F Interests exceeds the sum of the
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Group I Pool Scheduled Principal Balance plus the Group I
Pre-Funded Amount for the preceding Payment Date shall be
applied sequentially to reduce the Subsidiary Interest
Principal Balance, first of the Class S-1F Interest, then of
the Class S-2F(1) Interest, and last of the Class S-2F(13)
Interest.
(e) S-1V and S-2V Subsidiary. On each Payment Date, the Class S-1V and
S-2V Uncertificated Subsidiary Interests (or other appropriate Interest or
account as the context implies) shall receive distributions, to the extent of
the Group II Amount Available, in the following order of priority, provided,
however, that Prepayment Charges shall be paid to the Class P Certificateholder
pursuant to Section 8.07(f):
(i) Payment of the Trustee Fee, the Servicing Fee, the Backup
Servicing Fee and other items specified in Section 8.04(d)(i)
and reimbursement of Advances pursuant to Section 8.04(d)(ii);
(ii) Each Class of Class S-1V and S-2V Uncertificated Subsidiary
Interests shall receive distributions of interest, pro rata
based on their respective entitlements, in an amount equal to
(y) one-twelfth of the Group II Net WAC Cap Rate times the
Subsidiary Interest Adjusted Principal Balance of such Class,
plus (z) any Unpaid Subsidiary Interest Shortfall with respect
to such Class;
(iii) Distributions of principal shall be made to each Class S-1V
and Class S-2V Interest sequentially, i.e., first to the Class
S-1V Interest, second to the Class S-2V(1) Interest, and last
(after each other Class S-2V Interest) to the Class S-2V(13)
Interest, in each instance up to an amount equal to the
respective Subsidiary Interest Adjusted Principal Balance.
(iv) On each Payment Date, Realized Losses in respect of the Group
II Loans shall be applied as follows: the amount by which the
aggregate Subsidiary Interest Principal Balance of the Class
S-1V and S-2V Interests exceeds the sum of the Group II Pool
Scheduled Principal Balance plus the Group II Pre-Funded
Amount for the preceding Payment Date shall be applied
sequentially to reduce the Subsidiary Interest Principal
Balance, first of the Class S-1V Interest, then of the Class
S-2V(1) Interest, and last of the Class S-2V(13) Interest.
(f) Class P. After distribution of the Amount Available under Sections
8.07(d) and (e), and provided the Payment Date is one subsequent to the month in
which Prepayment Charges are no longer collectible on any Loan, to the Class P
Certificateholder (pro rata in respect of the Class P(F) and Class P(V)
Interests) until the Class P Principal Balance is reduced to zero. On each
Payment Date, Prepayment Charges shall be paid to the Class P Certificate in the
amount described in Section 8.04(f)(i).
(g) Class R-1. Any remaining Amount Available after payments in
accordance with Sections 8.07(d), (e) and (f) shall be distributed to the holder
of the Class R-I Interest.
8-19
SECTION 8.08 Pre-Funding Account.
(a) On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible Account,
and shall deposit therein the amount received from the Seller pursuant to
Section 2.02(l). The Pre-Funding Account shall be entitled "Pre-Funding Account,
U.S. Bank National Association as Trustee for the benefit of holders of Home
Equity Loan Certificates, Series 2002-C." The Trustee shall maintain within the
Pre-Funding Account two subaccounts as follows: the "Pre-Funding Group I
Account" and the "Pre-Funding Group II Account." Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee for the Holders of the
Certificates and the Class R Certificate for the uses and purposes set forth
herein.
(b) On or before the Closing Date the Seller shall deposit in the
Pre-Funding Group I Account and the Pre-Funding Group II Account the respective
amounts specified in Section 2.02(l). Amounts on deposit in such Accounts shall
be withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre-Funding Group I Account an
amount equal to 100% of the Cut-off Date Principal
Balance of each Subsequent Group I Loan transferred
and assigned to the Trustee on such Subsequent
Transfer Date and pay such amount to or upon the
order of the Originator upon satisfaction of the
conditions set forth in Section 2.03(b) with respect
to such transfer and assignment.
(ii) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre-Funding Group II Account an
amount equal to 100% of the Cut-off Date Principal
Balance of each Subsequent Group II Loan transferred
and assigned to the Trustee on such Subsequent
Transfer Date and pay such amount to or upon the
order of the Originator upon satisfaction of the
conditions set forth in Section 2.03(b) with respect
to such transfer and assignment.
(iii) On the Business Day immediately preceding the
Post-Funding Payment Date, the Trustee shall deposit
into the Certificate Account any amounts remaining in
the Pre-Funding Group I Account and the Pre-Funding
Group II Account, net of investment earnings.
(c) The Pre-Funding Account shall be part of the Trust but not part of
any REMIC. The Trustee on behalf of the Trust shall be the legal owner of the
Pre-Funding Account. The Seller shall be the beneficial owner of the Pre-Funding
Account, subject to the foregoing power of the Trustee to transfer amounts in
the Pre-Funding Account to the Certificate Account. Funds in the Pre-Funding
Account shall, at the direction of the Servicer, be invested in Eligible
Investments of the kind described in clauses (i) and (ii)(A) of the definition
of "Eligible Investments" and that mature no later than the Business Day prior
to the next succeeding Payment Date. All amounts earned on deposits in the
Pre-Funding Account shall be taxable to
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the Seller. The Trustee shall release to the Seller all investment earnings in
the Pre-Funding Account on the first Payment Date after the end of the
Pre-Funding Period.
SECTION 8.09 Yield Maintenance Reserve Fund.
(a) On or before the Closing Date, the Trustee shall establish a Yield
Maintenance Reserve Fund on behalf of the Class AV, Class MV-1, Class MV-2,
Class BV-1 and Class BV-2 Certificateholders. The Yield Maintenance Reserve Fund
shall be an Eligible Account and shall be entitled "Yield Maintenance Reserve
Fund, U.S. Bank National Association as Trustee for the benefit of holders of
Home Equity Loan Certificates, Series 2002-C, Class AV, MV-1, MV-2 BV-1, BV-2."
The Trustee shall demand payment of all money payable by the LIBOR Cap
Counterparty under the Yield Maintenance Agreement. The Trustee shall deposit in
the Yield Maintenance Reserve Fund any payment received from the LIBOR Cap
Counterparty pursuant to the Yield Maintenance Agreement. On each Payment Date
commencing with the Payment Date in August 2002 to and including the Payment
Date in October 2005, the Trustee will distribute the amount in the Yield
Maintenance Reserve Fund in the following order of priority:
(i) Unpaid Class AV-1 Basis Risk Carryover Shortfall. To
the Class AV-1 Certificateholders, the Unpaid Class
AV-1 Basis Risk Carryover Shortfall;
(ii) Unpaid Class MV-1 Basis Risk Carryover Shortfall. To
the Class MV-1 Certificateholders, the Unpaid Class
MV-1 Basis Risk Carryover Shortfall;
(iii) Unpaid Class MV-2 Basis Risk Carryover Shortfall. To
the Class MV-2 Certificateholders, the Class MV-2
Basis Risk Carryover Shortfall;
(iv) Unpaid Class BV-1 Basis Risk Carryover Shortfall. To
the Class BV-1 Certificateholders, the Unpaid Class
BV-1 Basis Risk Carryover Shortfall;
(v) Unpaid Class BV-2 Basis Risk Carryover Shortfall. To
the Class BV-2 Certificateholders, the Unpaid Class
BV-2 Basis Risk Carryover Shortfall;
(vi) Payment of Remainder. Any remaining amounts in the
Yield Maintenance Reserve Fund after payment to the
related Certificateholders pursuant to clauses (i)
through (v) above, to the Class B-3I
Certificateholder, not as a distribution in respect
of any interest in any REMIC.
(b) The Yield Maintenance Reserve Fund is an outside reserve fund and
shall be part of the Trust but not part of any REMIC. The Trustee on behalf of
the Trust shall be the nominal owner of the Yield Maintenance Reserve Fund. The
Class B-3I Certificateholder shall be the beneficial owner of the Yield
Maintenance Reserve Fund, subject to the power of the Trustee to transfer
amounts under Section 8.09(a). Amounts in the Yield Maintenance Reserve Fund
shall, at the direction of the Class B-3I Certificateholder, be invested in
Eligible Investments that mature no later than the Business Day prior to the
next succeeding Payment Date. All net income and gain from such investments
shall be distributed to the Class B-3I Certificateholder, not as a distribution
in respect of any interest in any REMIC, on such Payment Date. All
8-21
amounts earned on amounts on deposit in the Yield Maintenance Reserve Fund shall
be taxable to the Class B-3I Certificateholder. Any losses on such investments
shall be deposited in the Yield Maintenance Reserve Fund by the Class B-3I
Certificateholder out of its own funds immediately as realized.
SECTION 8.10 Basis Risk Reserve Fund.
(a) On or before the Closing Date, the Trustee shall establish the
Basis Risk Reserve Fund on behalf of the Trust, which must be an Eligible
Account, and shall maintain within the Basis Risk Reserve Account two
subaccounts, the Group I Subaccount and the Group II Subaccount. The Basis Risk
Reserve Fund shall be entitled "Basis Risk Reserve Fund, U.S. Bank National
Association as Trustee for the benefit of holders of Home Equity Loan
Certificates, Series 2002-C."
(b) On the Closing Date, the Trustee shall deposit in the Group I
Subaccount the amount described in Section 2.02(o). On each Payment Date, the
Trustee shall deposit in the Group I Subaccount any amount available for that
purpose pursuant to Section 8.04(c)(xi) or Section 12.04(d)(i)(F). On each
Payment Date the Trustee shall withdraw all amounts from the Group I Subaccount
and pay the following amounts in the order of priority indicated:
(i) Unpaid Class AF Basis Risk Carryover Shortfall. To
the Class AF Certificates, the Unpaid Class AF Basis
Risk Carryover Shortfall, and, if the amount
available therefor is not sufficient to pay the full
amount of Unpaid Class AF Basis Risk Carryover
Shortfall, then to each such Class of Class AF
Certificates pro rata based upon its respective
entitlement;
(ii) Unpaid Class MF-1 Basis Risk Carryover Shortfall. To
the Class MF-1 Certificateholders, the Unpaid Class
MF-1 Basis Risk Carryover Shortfall;
(iii) Unpaid Class MF-2 Basis Risk Carryover Shortfall. To
the Class MF-2 Certificateholders, the Unpaid Class
MF-2 Basis Risk Carryover Shortfall;
(iv) Unpaid Class BF-1 Basis Risk Carryover Shortfall. To
the Class BF-1 Certificateholders, the Unpaid Class
BF-1 Basis Risk Carryover Shortfall;
(v) Unpaid Class BF-2 Basis Risk Carryover Shortfall. To
the Class BF-2 Certificateholders, the Unpaid Class
BF-2 Basis Risk Carryover Shortfall; and
(vi) Payment of Remainder. Any remainder in excess of
$2,500 to the Class B-3I Certificateholder. Any
remainder equal to or less than $2,500 shall be
retained in the Group I Subaccount until the final
Payment Date when such remainder shall be so paid to
the Class B-3I Certificateholder.
(c) On the Closing Date, the Trustee shall deposit in the Group II
Subaccount the amount described in Section 2.02(o). On each Payment Date, the
Trustee shall deposit in the Group II Subaccount any amount available for that
purpose pursuant to Section 8.04(e)(xi) or
8-22
Section 12.04(d)(ii)(F). On each Payment Date the Trustee shall withdraw all
amounts from the Group II Subaccount and pay the following amounts in the order
of priority indicated:
(i) Unpaid Class AV Basis Risk Carryover Shortfall. To
the Class AV-1 Certificates, the Unpaid Class AV-1
Basis Risk Carryover Shortfall;
(ii) Unpaid Class MV-1 Basis Risk Carryover Shortfall. To
the Class MV-1 Certificateholders, the Unpaid Class
MV-1 Basis Risk Carryover Shortfall, less amounts
distributed to such Class under Section 8.09;
(iii) Unpaid Class MV-2 Basis Risk Carryover Shortfall. To
the Class MV-2 Certificateholders, the Unpaid Class
MV-2 Basis Risk Carryover Shortfall, less amounts
distributed to such Class under Section 8.09;
(iv) Unpaid Class BV-1 Basis Risk Carryover Shortfall. To
the Class BV-1 Certificateholders, the Unpaid Class
BV-1 Basis Risk Carryover Shortfall, less amounts
distributed to such Class under Section 8.09; and
(v) Unpaid Class BV-2 Basis Risk Carryover Shortfall. To
the Class BV-2 Certificateholders, the Unpaid Class
BV-2 Basis Risk Carryover Shortfall, less amounts
distributed to such Class under Section 8.09; and
(vi) Payment of Remainder. Any remainder in excess of
$2,500 to the Class B-3I Certificateholder. Any
remainder equal to or less than $2,500 shall be
retained in the Group II Subaccount until the final
Payment Date when such remainder shall be so paid to
the Class B-3I Certificateholder.
(d) The Basis Risk Reserve Fund is an outside reserve fund and shall be
part of the Trust but not part of any REMIC. The Trustee on behalf of the Trust
shall be the nominal owner of the Basis Risk Reserve Fund. The Class B-3I
Certificateholder shall be the beneficial owner of the Basis Risk Reserve Fund,
subject to the power of the Trustee to transfer amounts under Section 8.10(b)
and Section 8.10(c). For all federal tax purposes, all amounts transferred by a
REMIC to the Basis Risk Reserve Fund pursuant to Section 8.04(c)(xi) or Section
8.04(e)(xi) shall be treated as amounts distributed by a REMIC to the Class B-3I
Certificateholder or its transferee. Funds in the Basis Risk Reserve Fund shall,
at the direction of the Class B-3I Certificateholder, be invested in Eligible
Investments that mature no later than the Business Day prior to the next
succeeding Payment Date. All net income and gain from such investments shall be
distributed to the Class B-3I Certificateholder on such Payment Date. All
amounts earned on amounts on deposit in the Basis Risk Reserve Fund shall be
taxable to the Class B-3I Certificateholder. Any losses on such investments
shall be deposited in the Basis Risk Reserve Fund by the Class B-3I
Certificateholder out of its own funds immediately as realized.
SECTION 8.11 Capitalized Interest Account.
(a) On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $173,094 received from the Seller pursuant to
Section 2.02(m), $113,739 of which is in respect of the Group I Certificates
(the "Group I Amount") and $59,354 of which is in respect of the
8-23
Group II Certificates (the "Group II Amount"). The Capitalized Interest Account
shall be entitled "Capitalized Interest Account, U.S. Bank National Association
as Trustee for the benefit of holders of Home Equity Loan Certificates, Series
2002-C." On the Payment Date occurring in each of August 2002 and September
2002, if the Monthly Report for such Payment Date indicates that the Group I
Amount Available (after payment of the amount specified in clauses (i) and (ii)
of Section 8.04(b) and including in the Group I Amount Available only payments
in respect of interest on the Group I Loans) is not sufficient to pay the Class
AF Current Interest Amount, the Class AF-IO Current Interest Amount, the Class
MF-1 Current Interest Amount, the Class MF-2 Current Interest Amount, the Class
BF-1 Current Interest Amount, and the Class BF-2 Current Interest Amount, the
Trustee shall withdraw the amount of such deficiency, or any Group I Amount
remaining, if less, and shall deposit such funds in the Certificate Account for
distribution on such Payment Date in order first to pay any such deficiency in
respect of the Class AF and Class AF-IO Current Interest Amounts, pro rata,
second to pay any such deficiency in respect of the Class MF-1 Current Interest
Amount, third to pay any such deficiency in respect of the Class MF-2 Current
Interest Amount, fourth to pay any such deficiency in respect of the Class BF-1
Current Interest Amount, and fifth to pay any such deficiency in respect of the
Class BF-2 Current Interest Amount. On the Payment Date occurring in each of
August 2002 and September 2002, if the Monthly Report for such Payment Date
indicates that the Group II Amount Available (after payment of the amount
specified in clauses (i) and (ii) of Section 8.04(d) and including in the Group
II Amount Available only payments in respect of interest on the Group II Loans)
is not sufficient to pay the Class AV Current Interest Amount, the Class AV-IO
Current Interest Amount, the Class MV-1 Current Interest Amount, the Class MV-2
Current Interest Amount, the Class BV-1 Current Interest Amount and the Class
BV-2 Current Interest Amount, the Trustee shall withdraw the amount of such
deficiency, or any Group II Amount remaining, if less, and shall deposit such
funds in the Certificate Account for distribution on such Payment Date in order
first to pay any such deficiency in respect of the Class AV and Class AV-IO
Current Interest Amounts, pro rata, second to pay any such deficiency in respect
of the Class MV-1 Current Interest Amount, third to pay any such deficiency in
respect of the Class MV-2 Current Interest Amount, fourth to pay any such
deficiency in respect of the Class BV-1 Current Interest Amount, and fifth to
pay any such deficiency in respect of the Class BV-2 Current Interest Amount.
(b) The Capitalized Interest Account shall be part of the Trust but not
part of the REMIC. The Trustee on behalf of the Trust shall be the legal owner
of the Capitalized Interest Account. The Seller shall be the beneficial owner of
the Capitalized Interest Account, subject to the foregoing power of the Trustee
to transfer amounts in the Capitalized Interest Account to the Certificate
Account. Funds in the Capitalized Interest Account shall, at the direction of
the Seller, be invested in Eligible Investments that mature no later than the
Business Day prior to the next succeeding Payment Date. All net income and gain
from such investments shall be distributed to the Seller on such Payment Date.
All amounts earned on amounts on deposit in the Capitalized Interest Account
shall be taxable to the Seller.
(c) Any funds remaining in the Capitalized Interest Account after the
Payment Date in September 2002 shall be distributed to the Seller. After such
date no further amounts shall be deposited in or withdrawn from the Capitalized
Interest Account. Any losses on such investments shall be deposited in the
Capitalized Interest Account by the Seller out of its own funds immediately as
realized.
8-24
SECTION 8.12 Allocation of Realized Loss Amounts. On each Payment Date,
Realized Losses shall be distributed to the Uncertificated Subsidiary Interests
in accordance with Sections 8.07(d)(iii) and 8.07(e)(iii), and to the
Uncertificated Intermediate Interests in accordance with Sections 8.07(a)(ii)
and 8.07(b)(ii), and the Trustee shall allocate any Realized Loss Amount for
such Payment Date to the Regular Certificates as follows:
(a) from the Realized Loss Amount for the Group I Certificates:
(i) to the Class BF-2 Certificates up to an amount equal
to the Class BF-2 Principal Balance, less
distributions of principal on the Class BF-2
Certificates on such Payment Date;
(ii) any remainder, after allocation pursuant to clause
(i) above, to the Class BF-1 Certificates up to an
amount equal to the Class BF-1 Principal Balance,
less distributions of principal on the Class BF-1
Certificates on such Payment Date;
(iii) any remainder, after allocation pursuant to clauses
(i) and (ii) above, to the Class MF-2 Certificates up
to an amount equal to the Class MF-2 Principal
Balance, less distributions of principal on the Class
MF-2 Certificates on such Payment Date; and
(iv) any remainder, after allocation pursuant to clauses
(i), (ii) and (iii) above, to the Class MF-1
Certificates up to an amount equal to the Class MF-1
Principal Balance, less distributions of principal on
the Class MF-1 Certificates on such Payment Date.
(b) from the Realized Loss Amount for the Group II Certificates:
(i) to the Class BV-2 Certificates up to an amount equal
to the Class BV-2 Principal Balance, less
distributions of principal on the Class BV-2
Certificates on such Payment Date;
(ii) any remainder, after allocation pursuant to clause
(i) above, to the Class BV-1 Certificates up to an
amount equal to the Class BV-1 Principal Balance,
less distributions of principal on the Class BV-1
Certificates on such Payment Date;
(iii) any remainder, after allocation pursuant to clauses
(i) and (ii) above, to the Class MV-2 Certificates up
to an amount equal to the Class MV-2 Principal
Balance, less distributions of principal on the Class
MV-2 Certificates on such Payment Date; and
(iv) any remainder, after allocation pursuant to clauses
(i), (ii) and (iii) above, to the Class MV-1
Certificates up to an amount equal to the Class MV-1
Principal Balance, less distributions of principal on
the Class MV-1 Certificates on such Payment Date.
8-25
ARTICLE IX
THE CERTIFICATES AND THE CLASS R CERTIFICATE
SECTION 9.01 The Certificates and the Class R Certificate. The Class
AF, Class AF-IO, Class MF, Class BF, Class AV, Class AV-IO, Class MV, Class BV,
Class B-3I, Class R and Class P Certificates shall be substantially in the forms
set forth in Exhibits A, B, C, I and Q, as applicable, and shall, on original
issue, be executed by the Trustee on behalf of the Trust to or upon the order of
the Originator. The Class AF, Class AF-IO, Class MF, Class BF, Class AV, Class
AV-IO, Class MV and Class BV Certificates shall be evidenced by (i) one or more
Class AF-1 Certificates evidencing $107,938,000 in Original Class AF-1 Principal
Balance, (ii) one or more Class AF-2 Certificates evidencing $15,125,000 in
Original Class AF-2 Principal Balance, (iii) one or more Class AF-3 Certificates
evidencing $52,937,000 in Original Class AF-3 Principal Balance, (iv) one or
more Class AF-4 Certificate evidencing $41,250,000 in Original Class AF-4
Principal Balance, (v) one or more Class AF-IO Certificates evidencing
$123,750,000 in Original Class AF-IO Notional Balance, (vi) one ore more Class
MF-1 Certificates evidencing $19,938,000 in Original Class MF-1 Principal
Balance, (vii) one ore more Class MF-2 Certificates evidencing $17,187,000 in
Original Class MF-2 Principal Balance, (viii) one ore more Class BF-1
Certificates evidencing $13,063,000 in Original Class BF-1 Principal Balance,
(ix) one ore more Class BF-2 Certificates evidencing $7,562,000 in Original
Class BF-2 Principal Balance, (x) one or more Class AV-1 Certificates evidencing
$158,500,000 in Original Class AV-1 Principal Balance, (xi) one or more Class
AV-IO Certificates evidencing $89,600,000 in Original Class AV-IO Notional
Balance, (xii) one or more Class MV-1 Certificates evidencing $14,500,000 in
Original Class MV-1 Principal Balance, (xiii) one or more Class MV-2
Certificates evidencing $12,000,000 in Original Class MV-2 Principal Balance,
(xiv) one or more Class BV-1 Certificates evidencing $9,000,000 in Original
Class BV-1 Principal Balance, (xv) one or more Class BV-2 Certificates
evidencing $6,000,000 in Original Class BV-2 Principal Balance and (xvi) one
Class B-3I Certificate evidencing the entire Class B-3I Notional Amount,
beneficial ownership of such Classes of Certificates (other than the Class B-3I
Certificate) to be held through Book-Entry Certificates in minimum dollar
denominations of $25,000 and integral multiples of $1.00 in excess thereof. The
Class B-3I Certificate shall be evidenced by a single certificate issued on the
Closing Date to the Originator. The Class P Certificate shall be evidenced by a
single certificate issued to the Originator or its designee. The Class R-I,
Class R-II and Class R-III Interests shall be evidenced by a single Class R
Certificate, issued on the Closing Date to Green Tree Finance Corp.--Two and
shall represent 100% of the Percentage Interest of the Class R Certificate.
The Certificates and the Class R Certificate shall be executed by
manual signature on behalf of the Trustee by a duly authorized Responsible
Officer or authorized signatory. Certificates or the Class R Certificate bearing
the signatures of individuals who were at any time the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificate or Class R Certificate, or did not hold such offices at the
date of such Certificates or Class R Certificate. No Certificate or Class R
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless such Certificate or Class R Certificate has been
executed by manual signature in accordance with this Section, and such signature
upon any Certificate or Class R
9-1
Certificate shall be conclusive evidence, and the only evidence, that such
Certificates or Class R Certificate has been duly executed and delivered
hereunder. All Certificates and the Class R Certificate shall be dated the date
of their execution, except for those Certificates and the Class R Certificate
executed on the Closing Date, which shall be dated the Closing Date.
SECTION 9.02 Registration of Transfer and Exchange of Certificates and
the Class R Certificate.
(a) The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.03 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and the Class R Certificate
and of transfers and exchanges of Certificates and the Class R Certificate as
herein provided. The Trustee initially appoints itself to be the "Certificate
Registrar" and transfer agent for the purpose of registering Certificates and
the Class R Certificate and transfers and exchanges of Certificates and the
Class R Certificate as provided herein. The Trustee will give prompt written
notice to Certificateholders, the Class R Certificateholder, the Backup Servicer
and the Servicer of any change in the Certificate Registrar.
(b)
(i) Subject to clauses (ii) and (iii) below, no transfer
of a Class B-3I, Class BF-2, Class BV-2, Class P or
Class R Certificate shall be made by the Seller or
any other Person unless such transfer is exempt from
the registration requirements of the Securities Act
of 1933 (the "Act"), as amended, and any applicable
state securities laws or is made in accordance with
the Act and laws. In the event that any such transfer
is to be made, and the Certificate is not a
Book-Entry Certificate,
(A) the Originator may require a written Opinion
of Counsel acceptable to and in form and
substance satisfactory to the Originator
that such transfer may be made pursuant to
an exemption, describing the applicable
exemption and the basis therefor, from the
Act and laws or is being made pursuant to
the Act and laws, which Opinion of Counsel
shall not be an expense of the Trustee or
the Originator, and
(B) the Trustee shall require the transferee to
execute an investment letter substantially
in the form of Exhibit K attached hereto,
which investment letter shall not be an
expense of the Trustee or the Originator.
The Class R Certificateholder desiring to
effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the
Originator and the Certificate Registrar
against any liability that may result if the
transfer is not so exempt or is not made in
accordance with such federal and state laws.
(ii) No transfer of a Class B-3I, Class BF-2, Class BV-2,
Class P or Class R Certificate or any interest
therein shall be made to any employee benefit
9-2
plan that is subject to ERISA, or that is described
in Section 4975(e)(1) of the Code or to any person or
entity purchasing on behalf of, or with assets of,
such an employee benefit plan (each, a "Plan"),
unless the Plan delivers to the Originator and the
Trustee, an Opinion of Counsel in form satisfactory
to the Originator and the Trustee that the purchase
and holding of such Class B-3I Certificate, Class
BF-2, BV-2, Class P or Class R Certificate by such
Plan will not result in the assets of the Trust being
deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the
Code and will not subject the Trustee, the
Originator, the Seller, the Backup Servicer or the
Servicer to any obligation or liability in addition
to those undertaken in this Agreement. Unless such
opinion is delivered and in the case of Definitive
Certificates, each person acquiring such a
Certificate or Class R Certificate will be deemed to
represent to the Trustee, the Originator, the Seller,
the Backup Servicer and the Servicer either
(A) that such person is neither a Plan, nor
acting on behalf of a Plan, subject to ERISA
or to Section 4975 of the Code, or
(B) that the purchase and holding of the Class
B-3I Certificate, Class BF-2, BV-2, or Class
R Certificate by such Plan will not result
in the assets of the Trust being deemed to
be Plan assets and subject to the prohibited
transaction provisions of ERISA and the Code
and will not subject the Trustee, the
Originator or the Servicer to any obligation
or liability in addition to those undertaken
in this Agreement.
(iii) Notwithstanding anything to the contrary contained
herein,
(A) no Class B-3I, Class BF-2, BV-2, Class P or
Class R Certificate, nor any interest
therein, shall be transferred, sold or
otherwise disposed of to a "disqualified
organization," within the meaning of Section
860E(e)(5) of the Code (a "Disqualified
Organization"), including, but not limited
to,
(1) the United States, a State or
political subdivision thereof, a
foreign government, an
international organization or an
agency or instrumentality of any of
the foregoing,
(2) an organization (other than a
cooperative described in Section
521 of the Code) which is exempt
from the taxes imposed by Chapter 1
of the Code and not subject to the
tax imposed on unrelated business
income by Section 511 of the Code,
or
(3) a cooperative described in Section
1381(a)(2)(C) of the Code, and
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(B) prior to any registration of any transfer,
sale or other disposition of a Class B-3I,
Class BF-2, Class BV-2, Class P or Class R
Certificate, the proposed transferee shall
deliver to the Trustee, under penalties of
perjury, an affidavit that such transferee
is not a Disqualified Organization, with
respect to which the Trustee shall have no
actual knowledge that such affidavit is
false, and the transferor and the proposed
transferee shall each deliver to the Trustee
an affidavit with respect to any other
information reasonably required by the
Trustee pursuant to the REMIC Provisions,
including, without limitation, information
regarding the transfer of non-economic
residual interests and transfers of any
residual interest to or by a foreign person;
provided, however, that, upon the delivery
to the Trustee of an Opinion of Counsel, in
form and substance satisfactory to the
Trustee and rendered by Independent counsel,
to the effect that the beneficial ownership
of the Class B-3I, Class BF-2, Class BV-2,
Class P or Class R Certificate, as
applicable, by any Disqualified Organization
will not result in the imposition of federal
income tax upon the Trust or any Class B-3I,
Class BF-2, Class BV-2, Class P or Class R
Certificateholder or any other person or
otherwise adversely affect the status of any
of the Master REMIC, Intermediate REMIC or
Subsidiary REMIC as a REMIC, the foregoing
prohibition on transfers, sales and other
dispositions, as well as the foregoing
requirement to deliver a certificate prior
to any registration thereof, shall, with
respect to such Disqualified Organization,
terminate. Notwithstanding any transfer,
sale or other disposition of a Class B-3I,
Class BF-2, Class BV-2, Class P or Class R
Certificate, or any interest therein, to a
Disqualified Organization or the
registration thereof in the Certificate
Register, such transfer, sale or other
disposition and any registration thereof,
unless accompanied by the Opinion of Counsel
described in the preceding sentence, shall
be deemed to be void and of no legal force
or effect whatsoever and such Disqualified
Organization shall be deemed not to be a
Class B-3I, Class BF-2, Class BV-2, Class P
or Class R Certificateholder, as applicable,
for any purpose hereunder, including, but
not limited to, the receipt of distributions
on such Class B-3I, Class BF-2, Class BV-2,
Class P or Class R Certificate, and shall be
deemed to have no interest whatsoever in
such Class B-3I, Class BF-2, Class BV-2,
Class P or Class R Certificate. Each Class
B-3I, Class BF-2, Class BV-2, Class P or
Class R Certificateholder, by his acceptance
thereof, shall be deemed for all purposes to
have consented to the provisions of this
Section 9.02(b)(3).
(iv) Any transfer, sale or other disposition not in
compliance with the provisions of this Section
9.02(b) shall be deemed to be void and of no legal
force or effect whatsoever and such transferee shall
be deemed not to
9-4
be the Class B-3I Certificateholder or Class R
Certificateholder, as applicable, for any purpose
hereunder, including, but not limited to, the receipt
of distributions on the Class B-3I Certificate or
Class R Certificate, and shall be deemed to have no
interest whatsoever in the Class B-3I Certificate,
Class BF-2, Class BV-2, Class P or Class R
Certificate.
(v) The Trustee shall give notice to the Rating Agencies
promptly following any transfer, sale or other
disposition of a Class B-3I or Class R Certificate.
(c) At the option of a Certificateholder or a Class R
Certificateholder, Certificates and the Class R Certificate may be exchanged for
other Certificates or Class R Certificate of authorized denominations of a like
aggregate original denomination, upon surrender of such Certificates or the
Class R Certificate to be exchanged at the Corporate Trust Office. Whenever any
Certificates or the Class R Certificate are so surrendered for exchange, the
Trustee shall execute and deliver the Certificates or Class R Certificate which
the Certificateholder or Class R Certificateholder making the exchange is
entitled to receive. Every Certificate or Class R Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the holder thereof or
his or her attorney duly authorized in writing.
(d) Except as provided in paragraph (e) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times:
(i) registration of such Certificates may not be
transferred by the Trustee except to another
Depository;
(ii) the Depository shall maintain book-entry records with
respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates;
(iii) ownership and transfers of registration of such
Certificates on the books of the Depository shall be
governed by applicable rules established by the
Depository;
(iv) the Depository may collect its usual and customary
fees, charges and expenses from its Depository
Participants;
(v) the Trustee shall deal with the Depository,
Depository Participants and indirect participating
firms as representatives of the Certificate Owners of
such Certificates for purposes of exercising the
rights of Holders under this Agreement, and requests
and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners;
and
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(vi) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository
with respect to its Depository Participants and
furnished by the Depository Participants with respect
to indirect participating firms and persons shown on
the books of such indirect participating firms as
direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(e) If (x)
(i) the Seller or the Depository advises the Trustee in
writing that the Depository is no longer willing or
able properly to discharge its responsibilities as
Depository, and
(ii) the Trustee or the Originator is unable to locate a
qualified successor, or
(y) the Originator at its sole option advises the Trustee
in writing that it elects to terminate the book-entry
system through the Depository;
the Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of definitive, fully
registered Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same.
Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the Definitive Certificates. Neither the Originator nor
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(f) On or prior to the Closing Date, there shall be delivered to the
Depository one Class AF-1 Certificate, one Class AF-2 Certificate, one Class
AF-3 one Class AF-4 Certificate, one Class AF-IO Certificate, one Class MF-1
Certificate, one Class MF-2 Certificate, one Class BF-1 Certificate, one Class
BF-2 Certificate, one Class AV-1 Certificate, one Class AV-IO Certificate, one
Class MV-1 Certificate, one Class MV-2 Certificate, and one Class BV-1
Certificate, each in registered form registered in the name of the Depository's
nominee, Cede & Co., the total face amount of which represents 100% of the
Original Class Principal Balance of each Class, respectively (or in the case of
the Class AF-IO Certificate, the Class AF-IO Original Notional Amount). At any
time after the Closing Date, subject to compliance with the normal procedures of
the Trustee and the Depository, the Class BF-2 Certificateholders and Class BV-2
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Certificateholders may deliver to the Depository one Class BF-2 Certificate and
one Class BV-2 Certificate, registered in the name of Cede & Co. (or other
nominee of the Depository), the total face amount of which represents 100% of
the Original Principal Balance of the Class BF-2 Certificate and Class BV-2
Certificate, respectively. Each such Certificate registered in the name of the
Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
(g) Each of the Certificates (and the Class P Certificate) and the
Class R Certificate shall be a "security" for purposes of Article 8, Section
102(a)(15)(8) of the Uniform Commercial Code and shall be governed by such
Article 8 as in effect in the State of Minnesota from time to time.
SECTION 9.03 No Charge; Disposition of Void Certificates or Class R
Certificate. No service charge shall be made to a Certificateholder or Class R
Certificateholder for any transfer or exchange of a Certificate or a Class R
Certificate, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of a Certificate or a Class R
Certificate. All Certificates and Class R Certificate surrendered for transfer
and exchange shall be disposed of in a manner approved by the Trustee.
SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates or Class
R Certificate. If
(i) any mutilated Certificate or Class R Certificate is
surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any
Certificate or Class R Certificate, and
(ii) there is delivered to the Certificate Registrar and
the Trustee such security or indemnity as may be
required by each to save it harmless, then in the
absence of notice to the Certificate Registrar or the
Trustee that such Certificate or Class R Certificate
has been acquired by a bona fide purchaser, the
Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or
stolen Certificate or Class R Certificate, a new
Certificate or Class R Certificate of like tenor and
original denomination.
9-7
Upon the issuance of any new Certificate or Class R Certificate under this
Section 9.04, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses connected therewith. Any duplicate Certificate or Class R
Certificate issued pursuant to this Section 9.04 shall constitute complete and
indefeasible evidence of ownership of the Percentage Interest, as if originally
issued, whether or not the mutilated, destroyed, lost or stolen Certificate or
Class R Certificate shall be found at any time.
SECTION 9.05 Persons Deemed Owners. Prior to due presentation of a
Certificate or Class R Certificate for registration of transfer, the Servicer,
the Seller, the Trustee, the Paying Agent and the Certificate Registrar may
treat the person in whose name any Certificate or Class R Certificate is
registered as the owner of such Certificate or Class R Certificate for the
purpose of receiving remittances pursuant to Section 8.01 and for all other
purposes whatsoever, and none of the Servicer, the Seller, the Trustee, the
Certificate Registrar, the Paying Agent or any agent of the Servicer, the
Seller, the Trustee, the Paying Agent or the Certificate Registrar shall be
affected by notice to the contrary.
SECTION 9.06 Access to List of Certificateholders' and Class R
Certificateholder's Names and Addresses. The Certificate Registrar will furnish
to the Trustee and the Servicer, within five days after receipt by the
Certificate Registrar of a request therefor from the Trustee in writing, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders and the Class R Certificateholder as of the most
recent Record Date. If Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance apply in writing to
the Trustee (hereinafter referred to as "Applicants"), and such application
states that the Applicants desire to communicate with other Certificateholders
or the Class R Certificateholder with respect to their rights under this
Agreement or under the Certificates or the Class R Certificate and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders and the Class R Certificateholder
held by the Trustee. If such list is as of a date more than 90 days prior to the
date of receipt of such Applicants' request, the Trustee shall promptly request
from the Certificate Registrar a current list as provided above, and shall
afford such Applicants access to such list promptly upon receipt. Every
Certificateholder and the Class R Certificateholder, by receiving and holding a
Certificate or a Class R Certificate, agrees with the Certificate Registrar and
the Trustee that none of the Originator, the Certificate Registrar or the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders or the Class
R Certificateholder hereunder, regardless of the source from which such
information was derived.
SECTION 9.07 Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates or the Class R
Certificate. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class R Certificate by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class R Certificate "by the Trustee."
9-8
ARTICLE X
INDEMNITIES
SECTION 10.01 Real Estate. The Seller and Originator will jointly and
severally defend and indemnify the Trust, the Trustee (including the Custodian
and any other agents of the Trustee), the Backup Servicer, the
Certificateholders and the Class R Certificateholder against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation arising out of or resulting from
the use or ownership of any real estate related to a Loan by the Originator or
the Servicer or any Affiliate of either; provided that the amount paid to the
Backup Servicer pursuant to Section 8.04(b)(i) and 8.04(d)(i) in respect of
indemnification shall not exceed $100,000 in any year or $1,000,000 in the
aggregate. Notwithstanding any other provision of this Agreement, the obligation
of the Originator under this Section shall not terminate upon a Service Transfer
pursuant to Article VII, except that the obligation of the Originator under this
Section shall not relate to the actions of the Backup Servicer or any other
subsequent Servicer after a Service Transfer.
SECTION 10.02 Liabilities to Obligors. No obligation or liability to
any Obligor under any of the Loans is intended to be assumed by the Trust, the
Certificateholders or the Class R Certificateholder under or as a result of this
Agreement and the transactions contemplated hereby and, to the maximum extent
permitted and valid under mandatory provisions of law, the Trust, the
Certificateholders and the Class R Certificateholder expressly disclaim such
assumption.
SECTION 10.03 Tax Indemnification. The Originator agrees to pay, and to
indemnify, defend and hold harmless the Trust, the Trustee (including the
Custodian and any other agents of the Trustee), the Backup Servicer, the
Certificateholders and the Class R Certificateholders from, any taxes which may
at any time be asserted with respect to, and as of the date of, the transfer of
the Loans to the Trust, including, without limitation, any sales, gross
receipts, general corporation, personal property, privilege or license taxes
(but not including any federal, state or other taxes arising out of the creation
of the Trust and the issuance of the Certificates and the Class R Certificate)
and costs, expenses and reasonable counsel fees in defending against the same,
whether arising by reason of the acts to be performed by the Originator, the
Seller, the Servicer, the Backup Servicer or the Trustee under this Agreement or
imposed against the Trust, a Certificateholder, a Class R Certificateholder or
otherwise.
SECTION 10.04 Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian and any other agents
of the Trustee), the Backup Servicer, the Certificateholders and the Class R
Certificateholder against any and all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel and expenses
of litigation, in respect of any action taken or omitted to be taken by the
Servicer (including the Backup Servicer if it is the Servicer) with respect to
any Loan. This indemnity shall survive any Service Transfer (but the original
Servicer's obligations under this Section 10.04 shall not relate to any actions
or omissions of any subsequent Servicer after a Service Transfer and a
subsequent Servicer's obligations under this Section 10.04 shall not relate to
any act or omission of any predecessor Servicer) and any payment of the amount
owing under, or any repurchase by the Originator of, any such Loan.
10-1
SECTION 10.05 Operation of Indemnities. Indemnification under this
Article shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Originator or the Servicer has made
any indemnity payments to the Trust, the Trustee, the Backup Servicer, the
Certificateholders or the Class R Certificateholder pursuant to this Article and
they thereafter collect any of such amounts from others, they will repay such
amounts collected to the Originator or the Servicer, as the case may be, without
interest.
SECTION 10.06 REMIC Tax Matters. If a Class R Certificateholder,
pursuant to Section 6.06, pays any taxes or charges imposed upon the Master
REMIC, Intermediate REMIC or Subsidiary REMIC, as the case may be, or otherwise,
such taxes or charges, except to the extent set forth in the following proviso,
shall be expenses and costs of the Trust and the Class R Certificateholder shall
be entitled to be reimbursed therefor out of the Certificate Account as provided
in Section 8.04; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class R Certificateholder be
entitled to reimbursement therefor out of the Certificate Account, if and to the
extent that such taxes or charges resulted from a failure (i) by the Originator,
the Trustee or any Servicer to comply with the provisions of Section 2.05, (ii)
by any Servicer to comply with the provisions of Section 6.06, or (iii) by the
Trustee to execute any tax returns pursuant to Section 11.11.
SECTION 10.07 Indemnification of Backup Servicer. The Seller and
Originator will jointly and severally defend and indemnify the Backup Servicer,
its Affiliates, officers, directors, employees or agents against any and all
costs, expenses. losses, damages, claims, actions, judgments, suits and
liabilities, including reasonable fees and expenses of counsel and expenses of
litigation of any third-party claims arising out of actions taken or not taken
by the Backup Servicer, its Affiliates, officers, directors, employees or agents
under this Agreement, unless such action or inaction constitutes a breach of
this Agreement or results from the negligence or willful misconduct of the
Backup Servicer. To the extent the Seller and Originator fail to indemnify the
Backup Servicer, its Affiliates, officers, directors, employees or agents for
any amounts due under this Section 10.06 within 15 Business Days of written
demand for such indemnification hereunder, the Backup Servicer, its Affiliates,
officers, directors, employees or agents will be entitled to the payment of such
amounts under Section 8.04(b)(i), Section 8.04(c)(xii), Section 8.04(d)(i) and
Section 8.04(e)(xiii) of this Agreement.
SECTION 10.08 Limitation of Liability. In no event shall the Backup
Servicer be liable for any consequential, incidental or punitive damages.
10-2
ARTICLE XI
THE TRUSTEE
SECTION 11.01 Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Termination and after the curing of all Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:
(a) Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
(b) The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(c) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders representing, in the aggregate, 25%
or more of the Aggregate Certificate Principal Balance relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Agreement; and
(d) The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such event or the Trustee
receives written notice of such event from the Servicer or the
Certificateholders representing, in the aggregate, 25% or more of the Aggregate
Certificate Principal Balance.
11-1
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 11.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of a
Servicing Officer, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) The Trustee may consult with counsel and any opinion of any counsel
for the Originator, the Seller or the Servicer shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by the Trustee hereunder in good faith and in accordance with such
Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;
(d) Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Certificateholders representing, in the
aggregate, 25% or more of the Aggregate Certificate Principal Balance; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or,
11-2
if paid by the Trustee, shall be reimbursed by the Servicer upon demand;
provided, that, such obligation not be transferred to the Backup Servicer or
other successor Servicer; and
(e) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions of
such agents, attorneys or custodians if appointed by it with due care hereunder.
SECTION 11.03 Trustee Not Liable for Certificates, Class R Certificate
or Loans. The Trustee assumes no responsibility for the correctness of the
recitals contained herein, in the Certificates or in the Class R Certificate
(other than the Trustee's execution thereof). The Trustee makes no
representations as to the validity or sufficiency of this Agreement, of the
Certificates or of the Class R Certificate (other than its execution thereof) or
of any Loan, Loan File or related document. The Trustee shall not be accountable
for the use or application by the Servicer, the Originator or the Seller of
funds paid to the Originator or the Seller, as applicable in consideration of
conveyance of the Loans to the Trust by the Originator and the Seller or
deposited in or withdrawn from the Certificate Account by the Servicer.
SECTION 11.04 Trustee May Own Certificates. The Trustee in its
individual or other capacity may become the owner or pledgee of Certificates
representing less than all the beneficial interest in the Trust with the same
rights as it would have if it were not Trustee.
SECTION 11.05 Rights of Certificateholders to Direct Trustee and to
Waive Events of Termination. Holders of Certificates representing, in the
aggregate, 25% or more of the Aggregate Certificate Principal Balance shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee; provided, however, that, subject to Section 11.01, the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel determines that the action so directed may not lawfully
be taken, or if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; and provided,
further, that nothing in this Agreement shall impair the right of the Trustee to
take any action deemed proper by the Trustee and which is not inconsistent with
such direction by the Certificateholders. Holders of the Certificates
representing, in the aggregate, 51% or more of the Aggregate Certificate
Principal Balance may on behalf of all Certificateholders waive any past Event
of Termination hereunder and its consequences, except a default in respect of a
covenant or provision hereof which under Section 12.08 cannot be modified or
amended without the consent of all Certificateholders, and upon any such waiver,
such Event of Termination shall cease to exist and shall be deemed to have been
cured for every purpose of this Agreement; but no such waiver shall extend to
any subsequent or other Event of Termination or impair any right consequent
thereon.
11-3
SECTION 11.06 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer agrees:
(i) to pay to the Trustee reasonable compensation for all
services rendered by it hereunder (which compensation
shall not be limited by any provision of law in
regard to the compensation of a trustee of an express
trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee, to the extent requested by the
Trustee, for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in
accordance with any provision of this Agreement
(including the reasonable compensation and the
expenses and disbursements of its agents and
counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or
bad faith; and
(iii) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising
out of or in connection with the acceptance or
administration of the Trust and its duties hereunder,
including the costs and expenses of defending itself
against any claim or liability in connection with the
exercise or performance of any of its powers or
duties hereunder.
The covenants in this Section 11.06 shall be for the benefit of the
Trustee in its capacities as Trustee, Paying Agent and Certificate Registrar
hereunder, and shall survive the termination of this Agreement. If any entity
other than the Originator or a subsidiary or affiliate of the Originator is the
Servicer, the Servicer shall be reimbursed for any costs and expenses incurred
by it in this Section 11.06 pursuant to Sections 5.08 and 8.04(b), provided
that, if for any Payment Date the Originator is not the Servicer, the
obligations of the Servicer under this Section 11.06 shall be limited to the
funds remaining after distributions under Section 8.04(b)(i) and Section
8.04(d)(i) (without taking into account any amounts to be reimbursed to the
Backup Servicer under this Section 11.06) for that Payment Date.
SECTION 11.07 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a financial institution organized and doing
business under the laws of the United States of America or any State, authorized
under such laws to exercise corporate trust powers, and shall have a combined
capital and surplus of at least $50,000,000 or shall be a member of a bank
holding system the aggregate combined capital and surplus of which is
$50,000,000, provided, that, the Trustee's separate capital and surplus shall at
all times be at least the amount required by Section 310(a)(2) of the Trust
Indenture Act of 1939, as amended. If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of a supervising or
examining authority, then for the purposes of this Section 11.07, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
addition, the Trustee shall at all times have
(i) a long-term deposit rating from S&P of at least BBB
or as shall be otherwise acceptable to S&P,
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(ii) a long-term deposit rating from Xxxxx'x of at least
Baa2 or as shall be otherwise acceptable to Xxxxx'x.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.07, the Trustee shall resign
immediately in the manner and with the effect specified in Section 11.08.
SECTION 11.08 Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Servicer and the Originator. Upon receiving such notice of
resignation, the Originator shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to each of the Servicer, the Backup Servicer, and the Originator and
one copy to the successor Trustee. If no successor Trustee shall have been so
appointed and shall have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.07 and shall fail to resign after written
request therefor by the Originator, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Originator may remove the Trustee. If the Originator shall have removed the
Trustee under the authority of the immediately preceding sentence, the
Originator shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.08 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 11.09.
SECTION 11.09 Successor Trustee. Any successor Trustee appointed as
provided in Section 11.08 shall execute, acknowledge and deliver to the
Servicer, the Backup Servicer, the Originator and to its predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee. The predecessor
Trustee shall deliver or cause to be delivered to the successor Trustee the
Loans and the Loan Files and any related documents and statements held by it
hereunder; and, if the Loans are then held by a Custodian pursuant to a
custodial agreement, the predecessor Trustee and the Custodian shall amend such
custodial agreement to make the successor Trustee the successor to the
predecessor Trustee thereunder; and the Servicer, the Originator and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
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No successor Trustee shall accept appointment as provided in this
Section 11.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 11.07.
Upon acceptance of appointment by a successor Xxxxxxx as provided in
this Section 11.09, the Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to the Rating Agencies and to each
Certificateholder and the Class R Certificateholder at their addresses as shown
in the Certificate Register. If the Servicer fails to mail such notice within
ten days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 11.10 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided, however, that such Person shall be eligible under the provisions of
Section 11.07, 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 Trustee shall promptly notify the Rating Agencies in the
event it is a party to any merger, conversion or consolidation.
SECTION 11.11 Tax Returns. Upon the Servicer's request, the Trustee
will furnish the Servicer with all such information as the Servicer may
reasonably require in connection with preparing all tax returns of the Trust and
the Trustee shall execute such returns.
SECTION 11.12 Obligor Claims. In connection with any offset defenses,
or affirmative claims for recovery, asserted in legal actions brought by
Obligors under one or more Loans based upon provisions therein complying with,
or upon other rights or remedies arising from, any legal requirements applicable
to the Loans, including, without limitation, the Federal Trade Commission's
Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses
(16 C.F.R. ss. 433) as amended from time to time:
(i) The Trustee is not, and shall not be deemed to be,
either in any individual capacity, as trustee
hereunder or otherwise, a creditor, or a joint
venturer with or an Affiliate of, or acting in
concert or cooperation with, any home equity lender,
in the arrangement, origination or making of Loans.
The Trustee is the holder of the Loans only as
trustee on behalf of the Certificateholders and the
Class R Certificateholder, and not as a principal or
in any individual or personal capacity;
(ii) The Trustee shall not be personally liable for or
obligated to pay Obligors any affirmative claims
asserted thereby, or responsible to
Certificateholders or the Class R Certificateholder
for any offset defense amounts applied against Loan
payments, pursuant to such legal actions;
(iii) The Trustee will pay, solely from available Trust
monies, affirmative claims for recovery by Obligors
only pursuant to final judicial orders or
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judgments, or judicially approved settlement
agreements, resulting from such legal actions;
(iv) The Trustee will comply with judicial orders and
judgments which require its actions or cooperation in
connection with Obligors' legal actions to recover
affirmative claims against Certificateholders and the
Class R Certificateholder;
(v) The Trustee will cooperate with and assist
Certificateholders and the Class R Certificateholder
in their defense of legal actions by Xxxxxxxx to
recover affirmative claims if such cooperation and
assistance is not contrary to the interests of the
Trustee as a party to such legal actions and if the
Trustee is satisfactorily indemnified for all
liability, costs and expenses arising therefrom; and
(vi) The Originator hereby agrees to indemnify, hold
harmless and defend the Trustee, Certificateholders
and the Class R Certificateholder from and against
any and all liability, loss, costs and expenses of
the Trustee, Certificateholders and the Class R
Certificateholder resulting from any affirmative
claims for recovery asserted or collected by Obligors
under the Loans. Notwithstanding any other provision
of this Agreement, the obligation of the Originator
under this Section 11.12(vi) shall not terminate upon
a Service Transfer pursuant to Article VII.
SECTION 11.13 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction having authority over the
Trust, the Loans or the Obligors, the Originator and the Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 11.13, such powers, duties, obligations, rights and
trusts as the Originator and the Trustee may consider necessary or desirable. If
the Originator shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case an Event of Termination
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.07 hereunder and no notice to Certificateholders or a Class R
Certificateholder of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 11.09.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 11.13 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such co-trustee or separate trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding
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of title to the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed by such co-trustee or separate trustee at the direction
of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then co-trustees and separate trustees,
as effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.14 Trustee and U.S. Bancorp. In the event the Trustee ceases
to be a direct, wholly owned subsidiary of U.S. Bancorp, the Trustee shall
promptly notify the Rating Agencies.
SECTION 11.15 Trustee Advances.
(a) If the Servicer fails to deposit into the Certificate Account
Advances as required by Section 8.02, then the Trustee shall, subject to the
provisions of paragraph (b) below, from its own funds, deposit into the
Certificate Account the amount not so deposited by the Servicer on or before the
Business Day preceding the related Payment Date (a "Trustee Advance").
(b) The Trustee shall not be required to make any Trustee Advance if
and to the extent that it determines in good faith that the funds, if advanced,
would not be recoverable by it from subsequent amounts available in the
Certificate Account in accordance with Section 8.04(b) and (d).
(c) The Trustee shall be entitled to reimbursement of a Trustee Advance
from funds subsequently available therefor in the Certificate Account in
accordance with Section 8.04(b) and (d).
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Servicer Not to Resign; Delegation of Servicing Duties.
The Originator as Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that the performance of its
duties hereunder is no longer permissible under this Agreement or under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel for the Servicer to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
7.03.
Notwithstanding the foregoing, Conseco Finance Corp., if it is the
Servicer, may delegate some or all of its servicing duties to a wholly owned
subsidiary of the Originator, for so long as said subsidiary remains, directly
or indirectly, a wholly-owned subsidiary of Conseco Finance Corp.
Notwithstanding any such delegation, Conseco Finance Corp. shall retain all of
the rights and obligations of the Servicer hereunder.
The Backup Servicer, if it is the Servicer, may delegate some or all of
its servicing duties to an Affiliate. Notwithstanding any such delegation, the
Backup Servicer shall retain all of the rights and obligations of the Servicer
hereunder.
SECTION 12.02 Conseco Finance Corp. and Seller Not to Engage in Certain
Transactions with Respect to the Trust. Neither Conseco Finance Corp. nor the
Seller shall:
(i) Provide credit to any Certificateholder for the
purpose of enabling such Certificateholder to
purchase Certificates;
(ii) Purchase any Certificates in an agency or trustee
capacity; or
(iii) Loan any money to the Trust (other than Advances
pursuant to Section 8.02).
SECTION 12.03 Maintenance of Office or Agency. The Trustee will
maintain in Minneapolis or St. Xxxx, Minnesota, an office or agency where
Certificates or the Class R Certificate may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates, the Class R Certificate and this Agreement may be
served. On the date hereof the Trustee's office for such purposes is located at
000 Xxxx 0xx Xxxxxx, Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000. The Trustee will
give prompt written notice to the Originator, the Seller, the Servicer, the
Backup Servicer, the Certificateholders and the Class R Certificateholder of any
change in the location of the Certificate Register or any such office or agency.
SECTION 12.04 Termination.
(a) The Trust created hereby and the respective obligations and
responsibilities of the Originator, the Seller, the Servicer, the Guarantor and
the Trustee created hereby (other than the
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responsibility of the Trustee to make any final distributions to
Certificateholders and the Class R Certificateholder as set forth below) shall
terminate on the earlier of
(i) the Payment Date on which the principal balance of
all of the Loans is reduced to zero; or
(ii) the Payment Date occurring in the month following the
sale of the Loans pursuant to Section 8.06;
provided, that, in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof, and provided, further, that the Servicer's and
the Originator's representations and warranties and indemnities by the
Originator and the Servicer shall survive termination. Any termination of the
Trust must be conducted so as to qualify as a "qualified liquidation" of the
Subsidiary REMIC, Intermediate REMIC and Master REMIC, as applicable, within the
meaning of the REMIC Provisions.
(b) Any termination of the Trust must be conducted so as to qualify as
a "qualified liquidation" of the Subsidiary REMIC, Intermediate REMIC and Master
REMIC, as applicable, within the meaning of the REMIC Provisions. The Trustee's
acknowledgment of a notice given under Section 8.06(b)(iii) shall constitute a
plan of complete liquidation of the Master REMIC, Intermediate REMIC and
Subsidiary REMIC within the meaning of Section 860F of the Code.
(c) The Trustee shall give notice of the Final Payment Date to the
Certificateholders, the Rating Agencies, the Backup Servicer and the Certificate
Registrar. The Servicer shall direct the Trustee to give such notice ten days
prior to the date the Trustee is to mail such notice. The Trustee shall mail the
notice no later than the fifth Business Day of the month of the Final Payment
Date. The notice shall specify:
(i) the Final Payment Date (which shall be a date that
would otherwise be a Payment Date);
(ii) the Final Payment Date upon which final payment on
the Certificates and the Class R Certificate will be
made upon presentation and surrender of Certificates
(and the Class P Certificate) and the Class R
Certificate at the office or agency of the Trustee
therein designated;
(iii) the amount of any such final payment; and
(iv) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made
only upon presentation and surrender of the
Certificates and the Class R Certificate at the
office or agency of the Trustee therein specified.
(d) Upon presentation and surrender of the Certificates and the Class R
Certificate, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of
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priority and to the Certificateholders on the Final Payment Date in proportion
to their respective Percentage Interests:
(i) to the extent the Group I Amount Available is
sufficient therefor, and in the order of priority
provided for in Section 8.04(b) and (c), an amount
equal to
(A) concurrently (1) as to Class AF
Certificates, the Class AF Principal
Balance, together with any Unpaid Class AF
Interest Carry Forward Amount and interest
accrued during the related Accrual Period at
the Interest Rate for each Class of Class AF
Certificates on the related Class Principal
Balance, and (2) as to the Class AF-IO
Certificates, the Class AF-IO Current
Interest Amount, if any, for such Payment
Date, together with any Unpaid Class AF-IO
Interest Carry Forward Amount,
(B) as to the Class MF-1 Certificates, the Class
MF-1 Principal Balance, together with any
Unpaid Class MF-1 Interest Carry Forward,
any Unpaid Class MF-1 Realized Loss Interest
Amount, any Unpaid Class MF-1 Realized Loss
Amount and interest accrued during the
related Accrual Period at the Class MF-1
Interest Rate on the Class MF-1 Principal
Balance,
(C) as to Class MF-2 Certificates, the Class
MF-2 Principal Balance, together with any
Unpaid Class MF-2 Interest Carry Forward
Amount, any Unpaid Class MF-2 Realized Loss
Interest Amount, any Unpaid Class MF-2
Realized Loss Amount and interest accrued
during the related Accrual Period at the
Class MF-2 Interest Rate on the Class MF-2
Principal Balance,
(D) as to Class BF-1 Certificates, the Class
BF-1 Principal Balance, together with any
Unpaid Class BF-1 Interest Carry Forward
Amount any Unpaid Class BF-1 Realized Loss
Interest Amount, any Unpaid Class BF-1
Realized Loss Amount and interest accrued
during the related Accrual Period at the
Class BF-1 Interest Rate on the Class BF-1
Principal Balance,
(E) as to Class BF-2 Certificates, the Class
BF-2 Principal Balance, together with any
Unpaid Class BF-2 Interest Carry Forward
Amount, any Unpaid Class BF-2 Realized Loss
Interest Amount, any Unpaid Class BF-2
Realized Loss Amount and interest accrued
during the related Accrual Period at the
Class BF-2 Interest Rate on the Class BF-2
Principal Balance,
(F) to the Basis Risk Reserve Fund, Group I
Subaccount, the sum of all Unpaid Class AF,
Class AF-IO, Class MF-1, Class MF-2, Class
BF-1 and Class BF-2 Basis Risk Carryover
Shortfalls,
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(ii) to the extent the Group II Amount Available is
sufficient therefore, and in the order of priority
provided for in Section 8.04(d) and (e), an amount
equal to
(A) concurrently (1) as to Class AV
Certificates, the Class AV Principal
Balance, together with any Unpaid Class AV
Interest Carry Forward Amount and interest
accrued during the related Accrual Period at
the Class AV-1 Interest Rate, the Class AV-1
Principal Balance, and (2) as to the Class
AV-IO Certificates, the Class AV-IO Current
Interest Amount, if any, for such Payment
Date, together with any Unpaid Class AV-1
Interest Carry Forward Amount,
(B) as to the Class MV-1 Certificates, the Class
MV-1 Principal Balance, together with any
Unpaid Class MV-1 Interest Carry Forward,
any Unpaid Class MV-1 Realized Loss Interest
Amount, any Unpaid Class MV-1 Realized Loss
Amount and interest accrued during the
related Accrual Period at the Class MV-1
Interest Rate on the Class MV-1 Principal
Balance,
(C) as to Class MV-2 Certificates, the Class
MV-2 Principal Balance, together with any
Unpaid Class MV-2 Interest Carry Forward
Amount, any Unpaid Class MV-2 Realized Loss
Interest Amount, any Unpaid Class MV-2
Realized Loss Amount and interest accrued
during the related Accrual Period at the
Class MV-2 Interest Rate on the Class MV-2
Principal Balance,
(D) as to Class BV-1 Certificates, the Class
BV-1 Principal Balance, together with any
Unpaid Class BV-1 Interest Carry Forward
Amount any Unpaid Class BV-1 Realized Loss
Interest Amount, any Unpaid Class BV-1
Realized Loss Amount and interest accrued
during the related Accrual Period at the
Class BV-1 Interest Rate on the Class BV-1
Principal Balance,
(E) as to Class BV-2 Certificates, the Class
BV-2 Principal Balance, together with any
Unpaid Class BV-2 Interest Carry Forward
Amount, any Unpaid Class BV-2 Realized Loss
Interest Amount, any Unpaid Class BV-2
Realized Loss Amount and interest accrued
during the related Accrual Period at the
Class BV-2 Interest Rate on the Class BV-2
Principal Balance,
(F) to the Basis Risk Reserve Fund, Group II
Subaccount, the sum of all Unpaid Class AV,
Class AV-IO, Class MV-1, Class MV-2, Class
BV-1 and Class BV-2 Basis Risk Carryover
Shortfalls,
(iii) Any remaining Amount Available
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(A) as to the Class B-3I Certificate, the Class
B-3I Formula Distribution Amount, and
(B) to the Class P Certificateholder, any
Prepayment Charges not previously paid, and
(C) as to the Class P Certificate, the Class P
Principal Balance,
(iv) to the Class R Certificateholder, the amount which
remains on deposit in the Certificate Account (other
than amounts retained to meet claims) after
application pursuant to clauses (i) through (iii)
above.
SECTION 12.05 Acts of Certificateholders and Class R Certificateholder.
(a) Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates representing, in the aggregate, 51% or more of the
Aggregate Certificate Principal Balance.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders or the Class R Certificateholder may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders or the Class R Certificateholder in person or by an
agent duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where required, to the Servicer. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and (subject to Section 11.01)
conclusive in favor of the Trustee, the Servicer and the Originator if made in
the manner provided in this Section.
(c) The fact and date of the execution by any Certificateholder or
Class R Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
(d) The ownership of Certificates and the Class R Certificate shall be
proved by the Certificate Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder or the Class R Certificateholder
shall bind every holder of every Certificate or the Class R Certificate, as
applicable, issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done
by the Trustee, the Servicer or the Originator in reliance thereon, whether or
not notation of such action is made upon such Certificates or Class R
Certificate.
(f) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
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SECTION 12.06 Assignment or Delegation by Company. Except as
specifically authorized hereunder, and except for its obligations as Servicer
which are dealt with under Article V and Article VII, the Originator may not
convey and assign or delegate any of its rights or obligations hereunder absent
the prior written consent of Holders of Certificates representing, in the
aggregate, 66-2/3% or more of the Aggregate Certificate Principal Balance, and
any attempt to do so without such consent shall be void.
SECTION 12.07 Amendment.
(a) This Agreement may be amended from time to time by the Originator,
the Servicer and the Trustee, with the consent of the Backup Servicer, if the
amendment materially affects its rights and obligations herein, but without the
consent of any of the Certificateholders or the Class R Certificateholder, to
correct manifest error, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, as
the case may be, to make such changes as are necessary to maintain the status of
the Trust as a "real estate mortgage investment conduit" under the REMIC
Provisions of the Code or to otherwise effectuate the benefits of such status to
the Trust, the Certificateholders or the Class R Certificateholder, including,
without limitation, to implement any provision permitted by law that would
enable a REMIC to avoid the imposition of any tax, or to make any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel for
the Servicer, adversely affect in any material respect the interests of any
Certificateholder.
(b) This Agreement may also be amended from time to time by the
Servicer, the Originator and the Trustee, with the consent of the Backup
Servicer, if the amendment materially affects its rights and obligations herein,
and with the consent of Holders of Certificates representing, in the aggregate,
66-2/3% or more of the Aggregate Certificate Principal Balance, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of such
Certificateholders; provided, however, that no such amendment shall
(i) reduce in any manner the amount of, or delay the
timing of, collections of payments on the Loans or
distributions which are required to be made on any
Certificate,
(ii) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of the
holders of all Certificates then outstanding,
(iii) result in the disqualification of the Master REMIC,
Intermediate REMIC or Subsidiary REMIC under the
Code,
(iv) adversely affect the status of the Master REMIC,
Intermediate REMIC or Subsidiary REMIC as a REMIC or
the status of the Certificates as "regular interests"
in the REMIC, or
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(v) cause any tax (other than any tax imposed on "net
income from foreclosure property" under Section
860G(c)(1) of the Code that would be imposed without
regard to such amendment) to be imposed on the Trust,
including, without limitation, any tax imposed on
"prohibited transactions" under Section 860F(a)(1) of
the Code or on "contributions after the startup date"
under Section 860G(d)(1) of the Code.
This Agreement may not be amended without the consent of the Class R
Certificateholder, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement which would
modify in any manner the rights of the Class R Certificateholder.
(c) This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class R Certificateholder if
such amendment would result in the disqualification of the Master REMIC,
Intermediate REMIC or Subsidiary REMIC under the Code.
(d) Concurrently with the solicitation of any consent pursuant to this
Section 12.08, the Trustee shall furnish written notification to the Backup
Servicer, S&P and Moody's. Promptly after the execution of any amendment or
consent pursuant to this Section 12.08, the Trustee shall furnish written
notification of the substance of such amendment to S&P and Moody's, each
Certificateholder and Class R Certificateholder, and the Backup Servicer.
(e) It shall not be necessary for the consent of Certificateholders and
the Class R Certificateholder under this Section 12.08 to approve the particular
form of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders and
the Class R Certificateholder shall be subject to such reasonable requirements
as the Trustee may prescribe.
(f) The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
(g) In connection with any amendment pursuant to this Section, the
Trustee shall be entitled to receive an Opinion of Counsel to the Originator to
the effect that such amendment is authorized or permitted by this Agreement.
(h) Upon the execution of any amendment or consent pursuant to this
Section 12.08, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Certificateholder or the Class R Certificateholder hereunder shall be
bound thereby.
(i) In the absence of the consent described in subsection (d) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an unqualified Opinion of Counsel, the expense of which
shall not be an expense of the Trust, stating that any such amendment (i) will
not adversely affect the status of the Master REMIC, Intermediate REMIC or
Subsidiary REMIC as a REMIC or the status of the Certificates as "regular
interests" therein, and (ii) will not cause any tax (other than any tax imposed
on "net
12-7
income from foreclosure property" under Section 860G(c)(1) of the Code that
would be imposed without regard to such amendment) to be imposed on the Trust,
including, without limitation, any tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after the startup
date" under Section 860G(d)(1) of the Code.
SECTION 12.08 Notices. All communications and notices pursuant hereto
to the Seller, the Servicer, the Originator, the Trustee and the Rating Agencies
shall be in writing and delivered or mailed to it at the appropriate following
address:
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-1639
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Servicer:
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-1639
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Backup Servicer:
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Conseco 2002-C
If to the Trustee:
U.S. Bank National Association
Corporate Trust Department
000 Xxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx-Xxxx
Telecopier Number: (000) 000-0000
12-8
If to S&P:
Standard & Poor's
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage Surveillance
If to Moody's:
Xxxxx'x Investors Service, Inc
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder
or the Class R Certificateholder shall be in writing and delivered or mailed at
the address shown in the Certificate Register.
SECTION 12.09 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 12.10 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 12.11 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Minnesota.
12-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized this 9th day of
July, 2002.
CONSECO FINANCE CORP.
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President and Assistant Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President and Assistant Treasurer
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By:
--------------------------------------
Xxxxxx Xxxxxxx-Xxxx
Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
--------------------------------------
Xxxxx X. Xxxxxxxxx
Vice President
12-10
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ___ day of
July, 2002, by Xxxxxxx X. Xxxxxxxx, a Vice President and Assistant Treasurer of
Conseco Finance Corp., a Delaware corporation, on behalf of the corporation.
-----------------------------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ___ day of
July, 2002, by Xxxxxxx X. Xxxxxxxx, a Vice President and Assistant Treasurer of
Conseco Finance Securitizations Corp., a Minnesota corporation, on behalf of the
corporation.
-----------------------------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ___ day of
July, 2002, by Xxxxxx Xxxxxxx-Xxxx, a Vice President of U.S. Bank National
Association, a national banking association, on behalf of the national banking
association.
-----------------------------------------
Notary Public
[SEAL]
12-11
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ___ day of
July, 2002, by Xxxxx X. Xxxxxxxxx, a Vice President of Xxxxx Fargo Bank
Minnesota, National Association, a national banking association, on behalf of
the national banking association.
-----------------------------------------
Notary Public
[SEAL]
12-12
EXHIBIT A-1
FORM OF CLASS [AF][AV]-[1][2][3][4] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE.
Class [AF][AV]-[1][2][3][4] NO.
(Senior)
Pass-Through Rate: [A Floating Rate equal to
Cut-off Date: as defined the least of (a) One-Month LIBOR plus the Class
in the Pooling and Servicing [AF-1][AV-1] Margin, (b) the Adjusted Group [I]
Agreement dated July 1, 2002 [II] Net WAC Cap Rate and (c) 15.00% per annum]
[____%, or the Adjusted Group [I][II] Net WAC
First Payment Date: Cap Rate, if less]
August 15, 2002
Denomination: U.S. $__________
Servicer:
Conseco Finance Corp. Original Class Principal Balance of
Class [AF][AV]-[1][2][3][4] Certificates:
Final Scheduled Payment Date: $__________________
August 15, 2033 (or if such
day is not a Business Day,
then the next succeeding CUSIP No. _____________________
Business Day)
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2002-C, CLASS [AF][AV]-[1][2][3][4] (SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE POOLING AND SERVICING AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in the Certificates for Home Equity Loans, Series 2002-C, Class
[AF][AV]-[1][2][3][4] issued by Conseco Finance Home Equity Loan Trust 2002-C
(the "Trust"), which includes among its assets a pool of closed-end home equity
loans (the "Loans") (including, without limitation, all mortgages, deeds of
trust and security deeds relating to such Loans and any and all rights to
receive payments due on the Loans after the applicable Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of July 1, 2002, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), U.S. Bank National Association, as Trustee of
the Trust (the "Trustee") and Xxxxx Fargo Bank Minnesota, National Association,
as Backup Servicer (the "Backup Servicer").
A-1-1
This Certificate is one of the Certificates described in the Agreement and is
issued pursuant and subject to the Agreement. By acceptance of this Certificate
the holder assents to and becomes bound by the Agreement. To the extent not
defined herein, all capitalized terms have the meanings assigned to such terms
in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August,
2002, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class [AF][AV]-[1][2][3][4] Certificates with an
aggregate Percentage Interest of at least 5% of the Class [AF][AV]-[1][2][3][4]
Certificates and so desires, by wire transfer pursuant to instructions delivered
to the Trustee at least ten days prior to such Payment Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Payment Date, in an amount equal to the
Certificateholder's Percentage Interest of the Class [AF][AV]-[1][2][3][4]
Distribution Amount for such Payment Date. Distributions of interest and
principal on the Class [AF][AV]-[1][2][3][4] Certificates will be made primarily
from amounts available in respect of the Loans. The final scheduled Payment Date
of this Certificate is August 15, 2033 or the next succeeding Business Day if
such August 15 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account [, the Yield
Maintenance Reserve Fund] and the Basis Risk Reserve Fund to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Certificates evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co.
A-1-2
or in such other name as requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered
owner hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Backup Servicer the Trustee, the
Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the State of Minnesota from time to time.
A-1-3
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ____________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2002-C
By: U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------
Authorized Officer
A-1-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2002-C, and does hereby irrevocably constitute and appoint
_________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: _____________________
By:
-------------------------------------
Signature
A-1-5
EXHIBIT A-2
FORM OF CLASS [AF][AV]-IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE.
Class [AF][AV]-IO NO.
(Senior)
Pass-Through Rate: 7.50% per year (or
Cut-off Date: as defined in the Group [I][II] Net WAC Cap Rate, if less).
the Pooling and Servicing
Agreement dated July 1, 2002
Original Class Notional Amount of Class
First Payment Date: [AF][AV]-IO Certificates: __________
August 15, 2002
CUSIP No. ___________
Servicer:
Conseco Finance Corp.
Final Scheduled Payment Date:
August 15, 2033 (or if such day
is not a Business Day, then
the next succeeding Business Day)
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2002-C, CLASS [AF][AV]-IO (SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE POOLING AND SERVICING AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in the Certificates for Home Equity Loans, Series 2002-C, Class [AF][AV]-IO
issued by Conseco Finance Home Equity Loan Trust 2002-C (the "Trust"), which
includes among its assets a pool of closed-end home equity loans (the "Loans")
(including, without limitation, all mortgages, deeds of trust and security deeds
relating to such Loans and any and all rights to receive payments due on the
Loans after the applicable Cut-off Date). The Trust has been created pursuant to
a Pooling and Servicing Agreement (the "Agreement"), dated as of July 1, 2002,
among Conseco Finance Corp., as Originator and Servicer (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller"), U.S. Bank
National Association, as Trustee of the Trust (the "Trustee") and Xxxxx Fargo
Bank Minnesota, National Association, as Backup Servicer (the "Backup
Servicer"). This Certificate is one of the Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Certificate the holder assents to and becomes
A-2-1
bound by the Agreement. To the extent not defined herein, all capitalized terms
have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August
2002, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class [AF][AV]-IO Certificates with an aggregate
Percentage Interest of at least 5% of the Class [AF][AV]-IO Certificates and so
desires, by wire transfer pursuant to instructions delivered to the Trustee at
least ten days prior to such Payment Date) to the registered Certificateholder
at the address appearing on the Certificate Register as of the Business Day
immediately preceding such Payment Date, in an amount equal to the
Certificateholder's Percentage Interest of the Class [AF][AV]-IO Distribution
Amount. Distributions of interest on the Class [AF][AV]-IO Certificates will be
made primarily from amounts available in respect of the Loans. The final
scheduled Payment Date of this Certificate is August 15, 2033 or the next
succeeding Business Day if such August 15 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST-ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE OR AN INTEREST HEREIN SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF
PRINCIPAL WITH RESPECT TO THE LOANS.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Certificates evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co.
A-2-2
or in such other name as requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered
owner hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the State of Minnesota from time to time.
A-2-3
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ____________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2002-C
By: U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------
Authorized Officer
A-2-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2002-C, and does hereby irrevocably constitute and appoint
_________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: _____________________
By:
-------------------------------------
Signature
A-2-5
EXHIBIT B
FORM OF CLASS [MF][MV]-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
[AF][AV] CERTIFICATES, THE CLASS [AF][AV]-IO CERTIFICATES [AND THE CLASS
[MF][MV]-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
Class [MF][MV]-[1][2] NO.
(Subordinate)
Pass-Through Rate: [___% per annum, or the
Cut-off Date: as defined in Adjusted Group I Net WAC Cap Rate, if less.]
the Pooling and Servicing [A Floating Rate equal to the least of (a)
Agreement dated July 1, 2002 One-Month LIBOR plus the Class MV-[1][2]
Margin, (b) the Adjusted Group II Net WAC
Cap Rate and (c) 15.00% per annum.]
First Payment Date: Denomination: U.S. $__________
August 15, 2002
Original Class Principal Balance of
Class [MF][MV]-[1][2] Certificates:
$___________________
Servicer:
Conseco Finance Corp. Final Scheduled Payment Date: August 15,
2033 (or if such day is not a Business Day,
then the next succeeding Business Day)
CUSIP No. _____________________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2002-C, CLASS [MF][MV]-[1][2] (SUBORDINATE)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE POOLING AND SERVICING AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in the Certificates for Home Equity Loans, Series 2002-C, Class [MF][MV][1][2]
issued by Conseco Finance Home Equity Loan Trust 2002-C (the "Trust"), which
includes among its assets a pool of closed-end home
B-1
equity loans (the "Loans") (including, without limitation, all mortgages, deeds
of trust and security deeds relating to such Loans and any and all rights to
receive payments due on the Loans after the applicable Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of July 1, 2002, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), U.S. Bank National Association, as Trustee of
the Trust (the "Trustee") and Xxxxx Fargo Bank Minnesota, National Association,
as Backup Servicer (the "Backup Servicer"). This Certificate is one of the
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August,
2002, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class [MF][MV]-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class [MF][MV]-[1][2] Certificates and
so desires, by wire transfer pursuant to instructions delivered to the Trustee
at least ten days prior to such Payment Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Payment Date, in an amount equal to the
Interest of the Class [MF][MV]-[1][2] Distribution Amount for such Payment Date.
Distributions of interest and principal on the Class [MF][MV]-[1][2]
Certificates will be made primarily from amounts available in respect of the
Loans. The final scheduled Payment Date of this Certificate is August 15, 2033
or the next succeeding Business Day if such August 15 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account[, the Yield
Maintenance Reserve Fund] and the Basis Risk Reserve Fund to the extent
available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder
B-2
hereof or his or her attorney duly authorized in writing, and thereupon one or
more new Certificates evidencing the same aggregate Percentage Interest will be
issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the State of Minnesota from time to time.
B-3
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ________________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2002-C
By: U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------
Authorized Officer
B-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2002-C, and does hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: __________________________
By:
-------------------------------------
Signature
B-5
EXHIBIT C
FORM OF CLASS [BF][BV]-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
[AF][AV] CERTIFICATES, THE CLASS [AF][AV]-IO CERTIFICATES, THE CLASS [MF][MV]
CERTIFICATES [AND THE CLASS [BF][BV]-1 CERTIFICATES] AS DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.] [THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THE SECURITIES ACT AND OTHER APPLICABLE LAWS.]
C-1
[THE SECURITIES REPRESENTED BY THIS CERTIFICATE, IF NOT HELD BY A
UNITED STATES PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT OF 1933,
AS AMENDED), MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OFFERED OR
OTHERWISE DISPOSED OF EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (II) PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION.]
Class [BF][BV]-[1][2] NO.
(Subordinate)
Pass-Through Rate: [____% per annum, or the
Cut-off Date: as defined in Adjusted Group I Net WAC Cap Rate, if less.]
the Pooling and Servicing [A Floating Rate equal to the least of (a)
Agreement dated July 1, 2002 One-Month LIBOR plus the Class BV-1 Margin,
(b) the Adjusted Group II Net WAC Cap Rate
and (c) 15.00% per annum]
First Payment Date:
August 15, 2002
Denomination: U.S. $__________
Servicer:
Conseco Finance Corp. Original Class Principal Balance of
Class [BF][BV]-[1][2] Certificates:
$________________
Final Scheduled Payment Date:
August 15, 2033 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP No. _____________________
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 2002-C, CLASS [BF][BV]-[1][2] (SUBORDINATE)
[[TEMPORARY] [DEFINITIVE] GLOBAL CERTIFICATE]
[This [temporary] [definitive] global certificate is issued in
compliance with Rule 903(b)(3)(ii)(b) of Regulation S under the Securities Act
of 1933. This [temporary] global certificate will not be exchangeable for a
definitive certificate until] [definitive global certificate has no force or
effect until] [insert date 40 days after date of transfer to allow for Rule
903(b)(3)(ii)(b) distribution compliance period]. On that date, this [temporary]
[definitive] global certificate will automatically [expire and will be replaced
by a definitive certificate.] [replace the temporary global certificate
representing the Class BF-2 Certificates.]]
[BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT THE CERTIFICATEHOLDER EITHER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
C-2
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH
OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE
SELLER AND THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR
ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR
(II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE POOLING AND SERVICING AGREEMENT.
This certifies that [Cede & Co.] [Green Tree Finance Corp. - Two] is
the registered owner of the undivided Percentage Interest represented by the
original principal amount set forth above in the Certificates for Home Equity
Loans, Series 2002-C, Class [BF][BV]-[1][2], issued by Conseco Finance Home
Equity Loan Trust 2002-C (the "Trust"), which includes among its assets a pool
of closed-end home equity loans (the "Loans") (including, without limitation,
all mortgages, deeds of trust and security deeds relating to such Loans and any
and all rights to receive payments due on the Loans after the applicable Cut-off
Date). The Trust has been created pursuant to a Pooling and Servicing Agreement
(the "Agreement"), dated as of July 1, 2002, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), U.S. Bank National Association as Trustee of
the Trust (the "Trustee") and Xxxxx Fargo Bank Minnesota, National Association,
as Backup Servicer (the "Backup Servicer"). This Certificate is one of the
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August
2002, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class [BF][BV]-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class [BF][BV]-[1][2] Certificates and
so desires, by wire transfer pursuant to instructions delivered to the Trustee
at least ten days prior to such Payment Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Payment Date, in an amount equal
C-3
to the Certificateholder's Percentage Interest of the Class [BF][BV]-[1][2]
Distribution Amount for such Payment Date. Distributions of interest and
principal on the Class [BF[BV]-[1][2] Certificates will be made primarily from
amounts available in respect of the Loans. The final scheduled Payment Date of
this Certificate is August 15, 2033 or the next succeeding Business Day if such
August 15 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account[, the Yield
Maintenance Reserve Fund] and the Basis Risk Reserve Fund, to the extent
available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
[No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.]
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new
C-4
Certificates evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the State of Minnesota from time to time.
C-5
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _______________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2002-C
By: U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------
Authorized Officer
C-6
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2002-C, and does hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: _____________________
By:
-------------------------------------
Signature
C-7
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of July 1, 2002, among Conseco Finance Securitizations
Corp. (the "Seller"), Conseco Finance Corp. (the "Originator"), Xxxxx Fargo Bank
Minnesota, National Association, as Backup Servicer and U.S. Bank National
Association as Trustee (the "Trustee"), the undersigned does hereby transfer,
assign, set over and otherwise convey, without recourse, to Conseco Finance Home
Equity Loan Trust 2002-C, created by the Agreement, to be held in trust as
provided in the Agreement, (i) all right, title and interest in the home equity
loans identified in the List of Loans attached to the Agreement and each
Subsequent Transfer Instrument (including, without limitation, all related
mortgages, deeds of trust and security deeds and any and all rights to receive
payments on or with respect to the Loans due after the Cut-off Date, (ii) all
rights of the Seller under the Transfer Agreement and any Subsequent Transfer
Agreement (as defined in the Transfer Agreement), (iii) all rights under any
hazard, flood or other individual insurance policy on the real estate securing a
Loan for the benefit of the owner of such Loan, (iv) all rights the Originator
may have against the originating lender with respect to Loans originated by a
lender other than the Originator, (v) all rights under the Errors and Omissions
Protection Policy and the Fidelity Bond as such policy and bond relate to the
Loans, (vi) all rights under any title insurance policies, if applicable, on any
of the properties securing Loans, (vii) all documents contained in the related
Loan Files, (viii) amounts in the Certificate Account, any Pre-Funding Account,
the Basis Risk Reserve Fund, the Yield Maintenance Reserve Fund, and any
Capitalized Interest Account (including all proceeds of investments in the
Certificate Account) and (ix) all proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representations and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others. All undefined capitalized terms used in this Assignment
shall have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of __________, ____.
CONSECO FINANCE SECURITIZATIONS CORP.
By
-------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President and Assistant Treasurer
D-1
EXHIBIT E
FORM OF CERTIFICATE OF OFFICER
[Conseco Finance Corp.]
[Conseco Finance Securitizations Corp.]
I, _______________________, hereby certify that I am a [title] of
[Conseco Finance Corp., a Delaware corporation] [Conseco Finance Securitizations
Corp., a Minnesota corporation] (the "Company"), and that as such I am duly
authorized to execute and deliver this certificate on behalf of [Conseco Finance
Corp.] [Conseco Finance Securitizations Corp.] in connection with the Pooling
and Servicing Agreement dated as of July 1, 2002 (the "Agreement") among Conseco
Finance Corp., Conseco Finance Securitizations Corp., U.S. Bank National
Association, as Trustee and Xxxxx Fargo Bank Minnesota, National Association, as
Backup Servicer (the "Backup Servicer") (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
(i) attached hereto as Exhibit I are true and correct copies
of the [Restated] [Articles] [Certificate] of Incorporation of [Conseco
Finance Corp.] [Conseco Finance Securitizations Corp.], [together with
all amendments thereto] as in effect on the date thereof;
(ii) attached hereto as Exhibit II are true and correct copies
of the Bylaws of [Conseco Finance Corp.] [Conseco Finance
Securitizations Corp.], as amended, as in effect on the date hereof;
(iii) the representations and warranties of [Conseco Finance
Securitizations Corp.] contained in Sections 3.01 and 3.03 of the
Agreement are true and correct on and as of the date hereof and, to the
best of my knowledge, the representations and warranties of [Conseco
Finance Corp.] contained in Sections 3.02, 3.04 and 3.05 of the
Agreement are true and correct on and as of the date hereof;
(iv) no event with respect to [Conseco Finance Corp.] [Conseco
Finance Securitizations Corp.] has occurred and is continuing which
would constitute an Event of Termination or an event that with notice
or lapse of time or both would become an Event of Termination under the
Agreement; and
(v) each of the agreements and conditions of [Conseco Finance
Corp.] [Conseco Finance Securitizations Corp.] to be performed on or
before the date hereof pursuant to the Agreement have been performed in
all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _______________________, 2002.
-----------------------------------------
[Name]
[Title]
E-1
EXHIBIT F
FORM OF OPINION OF COUNSEL FOR THE ORIGINATOR
The opinion of Xxxxxx and Xxxxxx, P.A. shall be to the effect that
(capitalized terms have the meanings set forth in the Pooling and Servicing
Agreement):
The Originator is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, with corporate power
to execute, deliver and perform its obligations under the Pooling and Servicing
Agreement, the Certificates and the Class R Certificate.
The Pooling and Servicing Agreement has been duly authorized by all
requisite corporate action, duly executed and delivered by the Originator, and
constitutes the valid and binding obligation of the Originator enforceable in
accordance with its terms. The Certificates have been duly authorized by all
requisite corporate action and, when duly and validly executed by the Trustee in
accordance with the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing Agreement.
No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator for the consummation of the transactions contemplated by the Pooling
and Servicing Agreement, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriters pursuant to the Underwriting Agreement.
The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
Neither the transfer of the Loans to the Trustee acting on behalf of
the Trust, nor the assignment of the Originator's lien on the related real
estate which is the subject of a home equity loan, nor the issuance or sale of
the Certificates and the Class R Certificate, nor the execution and delivery of
the Pooling and Servicing Agreement, nor the consummation of any other of the
transactions contemplated in the Pooling and Servicing Agreement, nor the
fulfillment of the terms of the Certificates, the Class R Certificate or the
Pooling and Servicing Agreement by the Originator will conflict with, or result
in a breach, violation or acceleration of, or constitute a default under, any
term or provision of the Restated Certificate of Incorporation or Bylaws of the
Originator or of any indenture or other agreement or instrument known to us to
which the Originator is a party or by which it is bound, or result in a
violation of, or contravene the terms of any statute, order or regulation,
applicable to the Originator, of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it.
There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Originator before any court, administrative agency or other tribunal (A)
asserting the invalidity of the Pooling and Servicing Agreement, the
Certificates, the Class R Certificate, the hazard or flood insurance policies
applicable to any Loans or the Errors and Omissions Protection Policy, (B)
seeking to prevent the issuance of the Certificates or the Class R Certificate
or the consummation of any of the
F-1
transactions contemplated by the Pooling and Servicing Agreement, (C) which is
likely materially and adversely to affect the performance by the Originator of
its obligations under, or the validity or enforceability of the Pooling and
Servicing Agreement, the Certificates or the Class R Certificate, or (D) seeking
adversely to affect the federal income tax attributes of the Certificates or the
Class R Certificate described in the Prospectus and the Prospectus Supplement
under the heading "Certain Federal Income Tax Consequences."
The transfer of the Loans to the Trust in accordance with Section 2.01
of the Pooling and Servicing Agreement would not be avoidable as a preferential
transfer under Section 547 of the United States Bankruptcy Code (11 U.S.C. ss.
547), as in effect on the date hereof, in the event that the Originator became a
debtor under the United States Bankruptcy Code.
Pursuant to the Pooling and Servicing Agreement the Originator has
transferred to the Trustee acting on behalf of the Trust all of the Originator's
right, title and interest in the Loans, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Loans, and has delivered the Loan Files to the Trustee or its custodian.
No filing or other action, other than the filing of a financing statement on
Form UCC-1 with the Secretary of State of the State of Minnesota identifying the
Loans as collateral and naming the Originator as debtor and the Trust as secured
party, and the filing of continuation statements as required by Section 4.01 of
the Pooling and Servicing Agreement, is necessary to perfect as against third
parties the assignment of the Loans by the Originator to the Trust. We have
separately provided you with our opinion concerning whether such assignment
could be recharacterized as a pledge rather than a sale in the event the
Originator became a debtor under the United States Bankruptcy Code. However, in
the event such assignment were characterized as a pledge securing a loan from
the Certificateholders to the Originator, it is our opinion that the Trustee
would be deemed to have a valid and perfected security interest in the Loans and
the proceeds thereof, which security interest would be prior to any other
security interest that may be perfected under the Uniform Commercial Code as in
effect in the State of Minnesota and over any "lien creditor" (as defined in
Minn. Stat. ss.336.9-301(3)) who becomes such after the Closing Date, except
that a subsequent purchaser of any Loan who gives new value and takes possession
thereof in the ordinary course of his business would have priority over the
Trustee's security interest in such Loan, if such purchaser acts without
knowledge that such Loan was subject to a security interest. We have assumed for
the purposes of this opinion that during the term of the Pooling and Servicing
Agreement the Trustee, or its custodian, shall maintain possession of the Loan
Files for the purpose of perfecting the assignment to the Trustee of the Loans.
We express no opinion with respect to the enforceability of any individual Loan
or the existence of any claims, rights or other matters in favor of any Obligor
or the owner of any financed home improvement.
In reliance upon certain representations and warranties set forth in
the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing on behalf of the REMIC of a proper election to be taxed as
a REMIC, as of the date hereof the REMIC created pursuant to the Pooling and
Servicing Agreement will qualify as a REMIC. Further, the Certificates will
evidence ownership of the "regular interests" in the Master REMIC and the Class
R-I, Class R-II and Class R-III Certificates will evidence ownership of the
single Class of "residual interest" in the Subsidiary REMIC, Intermediate REMIC
and Master REMIC,
F-2
respectively. For Minnesota income tax purposes, and subject to the foregoing
assumptions, and the provisions of Minnesota law as of the date hereof, the
Trust (excluding the Yield Maintenance Reserve Funds, the Basis Risk Reserve
Fund and the Pre-Funding Account) will not be subject to tax and the income of
the Trust will be taxable to the holders of interests therein, all in accordance
with the provisions of the Code concerning REMICs. Moreover, ownership of
Certificates will not be a factor in determining whether such owner is subject
to Minnesota income taxes. Therefore, if the owner of Certificates is not
otherwise subject to Minnesota income or franchise taxes in the State of
Minnesota, such owner will not become subject to such Minnesota taxes solely by
virtue of owning Certificates.
The transfer of the Loans and the proceeds thereof by the Originator to
the Trustee on the date hereof pursuant to the Pooling and Servicing Agreement
would not be avoidable as a fraudulent transfer under the Uniform Fraudulent
Transfer Act as in effect in Minnesota on the date hereof (Minn. Stat. xx.xx.
513.41 through 513.51), nor, should the Originator become a debtor under the
United States Bankruptcy Code, as a fraudulent transfer under Section 548 of the
United States Bankruptcy Code (11 U.S.C. ss. 548) as in effect on the date
hereof.
F-3
EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGMENT
U.S. Bank National Association, a national banking association
organized under the laws of the United States, acting as trustee (the "Trustee")
of Conseco Finance Home Equity Loan Trust 2002-C (the "Trust") created pursuant
to the Pooling and Servicing Agreement dated as of July 1, 2002 among Conseco
Finance Corp., Conseco Finance Securitizations Corp. (the "Seller"), the Trustee
and Xxxxx Fargo Bank Minnesota, National Association, as Backup Servicer (the
"Backup Servicer") (the "Agreement") (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement)
acknowledges, pursuant to Section 2.04 of the Agreement, that the Trustee has
received the following: (i) all right, title and interest in the home equity
loans identified in the List of Loans attached to the [Agreement] [Subsequent
Transfer Instrument of even date herewith] (the Loans"), including, without
limitation, all related mortgages and deeds of trust and any and all rights to
receive payments on or with respect to the Loans (due after the Cut-off Date),
(ii) all rights under any hazard, flood or other individual insurance policy on
the real estate securing Loan for the benefit of the creditor of such Loan,
(iii) all rights the Seller may have against the originating lender with respect
to Loans originated by a lender other than the Seller, (iv) all rights under the
Errors and Omissions Protection Policy and the Fidelity Bond as such policy and
bond relate to the Loans, (v) all rights under any title insurance policies, if
applicable, on any of the properties securing Loans, (vi) all documents
contained in the related Loan Files, (vii) amounts in the Certificate Account,
Basis Risk Reserve Fund, Yield Maintenance Reserve Fund and any Pre-Funding
Account and Capitalized Interest Account (including all proceeds of investments
of funds in the Certificate Account, (viii) all rights of the Seller under the
Transfer Agreement, and (ix) all proceeds and products of the foregoing; and
declares that, directly or through a Custodian, it will hold all Loan Files that
have been delivered in trust, upon the trusts set forth in the Agreement for the
use and benefit of all Certificateholders.
[From Trustee or Custodian as applicable.] [The Trustee acknowledges
that it has conducted a review of the Loan Files for the Loans identified on the
attached list and hereby confirms that except as noted on the document exception
listing attached hereto, each Loan File contains (a) an original promissory note
(or an executed lost note affidavit, together with a copy of the note), duly
endorsed in blank or in the name of the Trustee, (b) an original or a copy of
the mortgage or deed of trust or similar evidence of a lien on the related
improved real estate, (c) in the case of Loans originated by a lender other than
the Originator, an original or a copy of an assignment of the mortgage, deed of
trust or security deed by the lender to the Originator, (d) an assignment of the
mortgage, deed of trust or similar evidence of a lien, to the Trustee or in
blank, and (e) any extension, modification or waiver agreement(s). The Trustee
has not otherwise reviewed the Loans and Loan Files for compliance with the
terms of the Pooling and Servicing Agreement.]
G-1
IN WITNESS WHEREOF, ____________________________ as Trustee has caused
this acknowledgment to be executed by its duly authorized officer and its
corporate seal affixed hereto as of this _____, day of ________________, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
--------------------------------------
[Name]
[Title]
G-2
EXHIBIT H
FORM OF CERTIFICATE OF SERVICING OFFICER
Conseco Finance Corp.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of July 1, 2002 among the Company, Conseco Finance
Securitizations Corp., U.S. Bank National Association, as Trustee, and Xxxxx
Fargo Bank Minnesota, National Association, as Backup Servicer of the Conseco
Finance Home Equity Loan Trust 2002-C (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certifies that:
1. The Monthly Report for the period from ______________ to
______________ attached to this certificate is complete and accurate in
accordance with the requirements of Sections 6.01 and 6.02 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _______________________, ____.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
H-1
EXHIBIT I
FORM OF CLASS B-3I CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS AF
CERTIFICATES, THE CLASS AF-IO CERTIFICATES, THE CLASS MF CERTIFICATES, THE CLASS
BF CERTIFICATES, THE CLASS AV CERTIFICATES, THE CLASS AV-IO CERTIFICATES, THE
CLASS MV CERTIFICATES, AND THE CLASS BV CERTIFICATES AS DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO PERSON MAY ACQUIRE THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF
OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT
IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") UNLESS IT
DELIVERS TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH
OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE
SELLER AND THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR
ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR
(II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OR ERISA AND THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
I-1
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE. THIS CERTIFICATE MAY ONLY
BE TRANSFERRED TO A PERMITTED TRANSFEREE (AS DEFINED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH TRANSFER MUST ALSO SATISFY THE
OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH POOLING AND SERVICING AGREEMENT.
Class B-3I NO.
(Subordinate) Percentage Interest: _________%
Cut-off Date: as defined in Final Scheduled Payment Date:
the Pooling and Servicing August 15, 2033 (or if such day is not
Agreement dated July 1, 2002 a Business Day, then the next succeeding
Business Day)
First Payment Date:
August 15, 2002
Servicer:
Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 2002-C
Original Aggregate Certificate Principal Balance of the Trust:
$475,000,000
This certifies that Green Tree Finance Corp. - Two is the registered
owner of the Undivided Percentage Interest represented by this Certificate, and
entitled to certain distributions out of Conseco Finance Home Equity Loan Trust
2002-C (the "Trust"), which includes among its assets a pool of closed-end home
equity loans (the "Loans") (including, without limitation, all mortgages, deeds
of trust and security deeds relating to such Loans and any and all rights to
receive payments due on the Loans after the applicable Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of July 1, 2002, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), U.S. Bank National Association, as Trustee of
the Trust (the "Trustee") and Xxxxx Fargo Bank Minnesota, National Association,
as Backup Servicer (the "Backup Servicer"). This Class B-3I Certificate is
described in the Agreement and is issued pursuant and subject to the Agreement.
By acceptance of this Class B-3I Certificate the holder assents to and becomes
bound by the Agreement. To the extent not defined herein, all capitalized terms
have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August
2002, so long as the Agreement has not been terminated, by check to the
registered Certificateholder at the address appearing on the Certificate
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the Class B-3I Distribution Amount for such Payment Date. The
final scheduled Payment Date of this Class B-3I Certificate is August 15, 2033
or the next succeeding Business Day if such August 15 is not a Business Day.
I-2
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE LOANS.
The Class B-3I Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class B-3I
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class
B-3I Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the Class B-3I
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.
This Class B-3I Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Class B-3I Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class B-3I Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class
B-3I Certificate for registration of transfer at the office or agency maintained
by the Trustee in Minneapolis or St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class B-3I Certificate evidencing the
same Class B-3I Certificate will be issued to the designated transferee or
transferees.
I-3
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent or the Certificate Registrar may treat the person in whose name
this Class B-3I Certificate is registered as the owner hereof for all purposes,
and neither the Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent, the Certificate Registrar nor any such agent shall be
affected by any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the State of Minnesota from time to time.
I-4
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _________________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2002-C
By: U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------
Authorized Officer
I-5
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2002-C, and does hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: ______________________
By:
-------------------------------------
Signature
I-6
EXHIBIT J-1
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
CONSECO FINANCE CORP.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06 and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of July 1, 2002 among the Company, Conseco
Finance Securitizations Corp., U.S. Bank National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2002-C and Xxxxx Fargo Bank Minnesota,
National Association, as Backup Servicer (the "Backup Servicer") (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Loans on the attached schedule are to be repurchased by the
Company on the date hereof pursuant to Section 3.06 of the Agreement.
2. Upon deposit of the Repurchase Price for such Loans, such Loans may,
pursuant to Section 8.05 of the Agreement, be assigned by the Trustee to the
Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _____________________, ____.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-1-1
EXHIBIT J-2
FORM OF CERTIFICATE REGARDING ELIGIBLE SUBSTITUTE LOANS
Conseco Finance Corp.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06(b) and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of July 1, 2002 among the Company, Conseco
Finance Securitizations Corp., U.S. Bank National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2002-C and Xxxxx Fargo Bank Minnesota,
National Association, as Backup Servicer (the "Backup Servicer") (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 3.06(b) of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 3.05(b)(iii) of the Agreement, have
been filed with the appropriate offices.
4. The requirements of Section 3.06(b) of the Agreement have been met
with respect to each such Eligible Substitute Loan.
[5. There has been deposited in the Certificate Account the amounts
listed on the schedule attached hereto as the amount by which the Scheduled
Principal Balance of each Replaced Loan exceeds the Scheduled Principal Balance
of each Loan being substituted therefor.]
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of ______________________, ____.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-2-1
EXHIBIT J-3
FORM OF CERTIFICATE REGARDING SUBSTITUTION FOR PREPAID LOANS
Conseco Finance Corp.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Section 2.06 of the Pooling and Servicing Agreement (the
"Agreement") dated as of July 1, 2002 among the Company, Conseco Finance
Securitizations Corp., U.S. Bank National Association, as Trustee of Conseco
Finance Home Equity Loan Trust 2002-C and Xxxxx Fargo Bank Minnesota, National
Association, as Backup Servicer (the "Backup Servicer") (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 2.06 of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 2.06(iii) of the Agreement, have
been filed with the appropriate offices.
4. The requirements of Section 2.06 of the Agreement have been met with
respect to each such Eligible Substitute Loan.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of ______________________, ____.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-3-1
EXHIBIT J-4
SERVICER REQUEST FOR RELEASE OF LOAN FILE
To: U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Re: Pooling and Servicing Agreement dated as of July 1, 2002,
among Conseco Finance Securitizations Corp., as Seller,
Conseco Finance Corp., as Originator and Servicer, U.S. Bank
National Association, as Trustee, and Xxxxx Fargo Bank
Minnesota, National Association, as Backup Servicer relating
to Conseco Finance Securitizations Corp., Certificates for
Home Equity Loans, Series 2002-C
The undersigned certifies that [s]he is authorized to sign this
Servicer Request for Release of Loan File on behalf of [Conseco Finance Corp.],
as Servicer, under the Pooling and Servicing Agreement dated as of July 1, 2002
among Conseco Finance Corp., Conseco Finance Securitizations Corp., the Trustee
and Xxxxx Fargo Bank Minnesota, National Association, as Backup Servicer. In
connection with the administration of the Loans held by you, as Trustee,
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Loan File for the Loan described
below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check only):
-------------------------------
_________ 1. Mortgage Paid in Full
_________ 2. Foreclosure
_________ 3. Substitution
_________ 4. Other Liquidation
_________ 5. Nonliquidation Reason:
------------------------------------
Servicer:
----------------------------------
By:
----------------------------------------
(Authorized signer)
Address:
-----------------------------------
-----------------------------------
Date:
--------------------------------------
J-4-1
EXHIBIT K
FORM OF REPRESENTATION LETTER
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Conseco Finance Securitizations Corp.
0000 Xxxxxxxx Xxxxxx
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: Certificates for Home Equity Loans, Series 2002-C, Class
[BF-2/BV-2/B-3I/R]
The undersigned purchaser (the "Purchaser") understands that the
purchase of the above-referenced certificates (the "Certificates") may be made
only by institutions which:
A. are "accredited investors" as defined in Regulation D promulgated
under the Securities Act of 1933, as amended (the "1933 Act"), or
B. are not "U.S. persons" as defined in Regulation S promulgated under
the 1933 Act, or
C. are "qualified institutional buyers" as defined in Rule 144A
promulgated under the 1933 Act.
The Purchaser is urged to review carefully the responses, representations and
warranties it is making herein.
Representations and Warranties
------------------------------
The Purchaser makes the following representations and warranties in
order to permit the Trustee, Conseco Finance Securitizations Corp., and
____________________________ to determine its suitability as a purchaser of
Certificates and to determine that the exemption from registration relied upon
by Conseco Finance Securitizations Corp. under the 1933 Act is available to it.
1. The Purchaser (check all that apply):
[_] is an "accredited investor" as defined in Regulation
D promulgated under the 1933 Act.
[_] is not a "U.S. person" as defined in Regulation S
promulgated under the 1933 Act.
[_] is a "qualified institutional buyer" as defined in
Rule 144A promulgated under the 1933 Act.
K-1
2. The Purchaser understands that the Certificates have not been and
will not be registered under the 1933 Act and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Conseco Finance
Securitizations Corp. is not required to register the Certificates and that any
transfer must comply with Section 9.02 of the Pooling and Servicing Agreement
relating to the Certificates.
3. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
4. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The Purchaser has reviewed
the Prospectus Supplement dated July 2, 2002, to the Prospectus dated July 2,
2002 [and any additional offering circulars, private placement memoranda or
supplements] with respect to the Certificates, and has been given such
information concerning the Certificates, the underlying home equity loans and
Conseco Finance Securitizations Corp. as it has requested.
5. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
6. The Purchaser either (check one box):
[_] is not, and is not acting on behalf of or with assets
of, an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as
amended or that is described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or
[_] has provided the Trustee and Servicer with the
opinion of counsel described in Section 9.02(b)(2) of
the Pooling and Servicing Agreement, or
[_] acknowledges that it is deemed to make the
representation set forth in Section 9.02(b)(2) of the
Pooling and Servicing Agreement.
7. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
8. The Purchaser, as holder of the Certificates, acknowledges (i) it
may incur tax liabilities in excess of any cash flows generated by the interest
and (ii) it intends to pay the taxes associated with holding the Certificates as
they become due.
K-2
9. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 8 and in this paragraph 9. The
representations and warranties contained herein shall be binding upon the heirs,
executors, administrators and other successors of the undersigned. If there is
more than one signatory hereto, the obligations, representations, warranties and
agreements of the undersigned are made jointly and severally.
Executed at ______________________________________________________,
_____________________________, this ______ day of _________________, ____.
-----------------------------------------
Purchaser's Name (Print)
By:
-------------------------------------
Signature
Its:
-------------------------------
Address of Purchaser
--------------------
--------------------------------------
--------------------------------------
Purchaser's Taxpayer
Identification Number
-------------------
K-3
EXHIBIT L-1
LIST OF INITIAL AND ADDITIONAL GROUP I LOANS
[To Be Supplied]
L-1-1
EXHIBIT L-2
LIST OF INITIAL AND ADDITIONAL GROUP II LOANS
[To Be Supplied]
EXHIBIT M
FORM OF MONTHLY REPORT
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
HOME EQUITY CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-C Group I
TRUST ACCOUNT: 3341790-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Group I (Fixed) Available Funds Principal Interest Total
------------------------------- --------- -------- -----
Scheduled Monthly Payments Collected 0.00 0.00 0.00
Principal Prepayments 0.00 0.00 0.00
Proceeds on Liquidated Loans 0.00 0.00 0.00
Servicer Reimbursement of Pre-Liquidation Expenses 0.00 0.00 0.00
Servicer Reimbursement of Post-Liquidation Expenses 0.00 0.00 0.00
Servicer Advance for Delinquent Payments 0.00 0.00 0.00
Recovery of Prior Month's Servicer Advance 0.00 0.00 0.00
10-Day Roll Forward of Principal Collections (N/A) 0.00 0.00 0.00
Recovery of Prior Month's 10-Day Roll Forward (N/A) 0.00 0.00 0.00
Certificate Account Earnings 0.00 0.00 0.00
Class M & B-1 Interest Deficiencies for current Remittance 0.00 0.00 0.00
Class M & B-1 Interest Deficiencies from prior Remittance 0.00 0.00 0.00
Amount Withdrawn from Reserve Funds 0.00 0.00 0.00
Other Adjustments to Available Funds 0.00 0.00 0.00
------------ ------------ -----------
Total Available Funds 0.00 0.00 0.00
============ ============ ===========
Group I Fees Payable
--------------------
Monthly Servicing Fee (0.5% of Pool Scheduled Principal Balance) 0.00
Back-up Servicing Fee (.03% of Pool Scheduled Principal Balance) 0.00
Trustee Fee 0.00
Insurance Premium (N/A) 0.00
Cap Provider Fee (N/A) 0.00
-----------
Total Fees 0.00
===========
Group I Amount Available for Principal and Interest Distribution (see page 2) 0.00
===========
Group I Formula Principal Distribution
--------------------------------------
Scheduled Principal Payments 0.00
Principal Prepayments (Payoffs and Curtailments) 0.00
Liquidated Loans 0.00
Repurchased / Substituted Contracts 0.00
10-Day Principal Roll Forward (N/A) 0.00
Prior Month's 10-Day Roll Forward (N/A) 0.00
-----------
Total Formula Principal Distribution 0.00
===========
Unpaid Principal Shortfall as of Prior Month 0.00
Current Month Class M and B Liquidation Loss Distribution 0.00
Group I Extra Principal Distribution 0.00
-----------
Total Additional Principal Distribution and Other Principal Distribution 0.00
===========
Pool Scheduled Principal Balance 0.00
10-Day Adjusted Pool Principal Balance (N/A) 0.00
Certificate Principal Balance (excluding IO Notional Principal Amount) 0.00
Overcollateralization Amount (Target:) 8,250,000.00 0.00
Total Outstanding Loan Count 0
Ending
Group I Reserve Funds / Cash Deposits Previous Balance Deposits Withdrawals Balance
------------------------------------- ---------------- -------- ----------- -------
Prefunded Account 0.00 0.00 0.00 0.00
Undelivered Account 0.00 0.00 0.00 0.00
Stage-Funded Reserve Fund (N/A) 0.00 0.00 0.00 0.00
Basis Risk Reserve Fund 0.00 0.00 0.00 0.00
Yield Maintenance Reserve Fund 0.00 0.00 0.00 0.00
Non-Recoverable Pre-Liquidation Expenses Incurred: 0.00 Outstanding: 0.00
Non-Recoverable Post-Liquidation Expenses Incurred: 0.00 Outstanding: 0.00
M-1
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
HOME EQUITY CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-C Group II
TRUST ACCOUNT: 3341790-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Group II (ARM) Available Funds Principal Interest Total
------------------------------ --------- -------- -----
Scheduled Monthly Payments Collected 0.00 0.00 0.00
Principal Prepayments 0.00 0.00 0.00
Proceeds on Liquidated Loans 0.00 0.00 0.00
Servicer Reimbursement of Pre-Liquidation Expenses 0.00 0.00 0.00
Servicer Reimbursement of Post-Liquidation Expenses 0.00 0.00 0.00
Servicer Advance for Delinquent Payments 0.00 0.00 0.00
Recovery of Prior Month's Servicer Advance 0.00 0.00 0.00
10-Day Roll Forward of Principal Collections (N/A) 0.00 0.00 0.00
Recovery of Prior Month's 10-Day Roll Forward (N/A) 0.00 0.00 0.00
Certificate Account Earnings 0.00 0.00 0.00
Class M & B-1 Interest Deficiencies for current Remittance 0.00 0.00 0.00
Class M & B-1 Interest Deficiencies from prior Remittance 0.00 0.00 0.00
Amount Withdrawn from Reserve Funds 0.00 0.00 0.00
Other Adjustments to Available Funds 0.00 0.00 0.00
----------- ------------- --------------
Total Available Funds 0.00 0.00 0.00
=========== ============= ==============
Group II Fees Payable
---------------------
Monthly Servicing Fee (0.5% of Pool Scheduled Principal Balance) 0.00
Back-up Servicing Fee (.03% of Pool Scheduled Principal Balance) 0.00
Trustee Fee 0.00
Insurance Premium (N/A) 0.00
Cap Provider Fee (N/A) 0.00
--------------
Total Fees 0.00
==============
Group II Amount Available for Principal and Interest Distribution (see page 4) 0.00
==============
Group II Formula Principal Distribution
---------------------------------------
Scheduled Principal Payments 0.00
Principal Prepayments (Payoffs and Curtailments) 0.00
Liquidated Loans 0.00
Repurchased / Substituted Contracts 0.00
10-Day Principal Roll Forward (N/A) 0.00
Prior Month's 10-Day Roll Forward (N/A) 0.00
--------------
Total Formula Principal Distribution 0.00
==============
Unpaid Principal Shortfall as of Prior Month 0.00
Current Month Class M and B Liquidation Loss Distribution 0.00
Group II Extra Principal Distribution 0.00
--------------
Total Additional Principal Distribution and Other Principal Distribution 0.00
==============
Pool Scheduled Principal Balance 0.00
10-Day Adjusted Pool Principal Balance (N/A) 0.00
Certificate Principal Balance (excluding IO Notional Principal Amount) 0.00
Overcollateralization Amount (Target:) 4,500,000.00 0.00
Total Outstanding Loan Count 0
Ending
Group II Reserve Funds / Cash Deposits Previous Balance Deposits Withdrawals Balance
-------------------------------------- ---------------- -------- ----------- -------
Prefunded Account 0.00 0.00 0.00 0.00
Undelivered Account 0.00 0.00 0.00 0.00
Stage-Funded Reserve Fund (N/A) 0.00 0.00 0.00 0.00
Basis Risk Reserve Fund 0.00 0.00 0.00 0.00
Yield Maintenance Reserve Fund 0.00 0.00 0.00 0.00
Non-Recoverable Pre-Liquidation Expenses Incurred: 0.00 Outstanding: 0.00
Non-Recoverable Post-Liquidation Expenses Incurred: 0.00 Outstanding: 0.00
M-2
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
HOME EQUITY CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-C Group I
TRUST ACCOUNT: 3341790-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Principal Allocation Percentage
-------------------------------
Following
Current Date Date
--------------- ---------------- --------------
Class A 100.00000000 100.00000000
Class M 0.00000000 0.00000000
Class B 0.00000000 0.00000000
--------------- ---------------- --------------
Total 100.00000000 100.00000000
--------------- ---------------- --------------
Unpaid
Group I Distributions Current Interest
--------------------- Coupon Interest Shortfall Interest Principal Principal Ending
Class CUSIP Rate Payment Payment Per $1000 Payment Per $1000 Balance
---------- ------------ -------------- ----------- ------------- -------------- ------------ --------------- ----------------
AF1 00000XXX0 2.040000% 0.00 0.00 0.00000000 0.00 0.00000000 107,938,000.00
AF2 00000XXX0 3.827000% 0.00 0.00 0.00000000 0.00 0.00000000 15,125,000.00
AF3 00000XXX0 4.580000% 0.00 0.00 0.00000000 0.00 0.00000000 52,937,000.00
AF4 00000XXX0 5.972000% 0.00 0.00 0.00000000 0.00 0.00000000 41,250,000.00
AFIO 00000XXX0 7.500000% 0.00 0.00 0.00000000 0.00 0.00000000 123,750,000.00
MF1 00000XXX0 6.158000% 0.00 0.00 0.00000000 0.00 0.00000000 19,938,000.00
MF2 00000XXX0 6.981000% 0.00 0.00 0.00000000 0.00 0.00000000 17,187,000.00
BF1 00000XXX0 8.000000% 0.00 0.00 0.00000000 0.00 0.00000000 13,063,000.00
BF2 xxxxxxxxx 8.000000% 0.00 0.00 0.00000000 0.00 0.00000000 7,562,000.00
B3I xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
P xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A 60.00
R xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
---------- ------------ -------------- ----------- ------------- -------------- ------------ --------------- ----------------
Totals 0.00 0.00 0.00 275,000,060.00
========== ============ ============== =========== ============= ============== ============ =============== ================
(Table continues)
Unpaid Unpaid
Pool Original Interest Principal
Class Factor Balance Carry Forward Shortfall
---------- ------------- -------------- -------------- ------------
AF1 1.00000000 107,938,000.00 0.00 0.00
AF2 1.00000000 15,125,000.00 0.00 0.00
AF3 1.00000000 52,937,000.00 0.00 0.00
AF4 1.00000000 41,250,000.00 0.00 0.00
AFIO 1.00000000 123,750,000.00 0.00 0.00
MF1 1.00000000 19,938,000.00 0.00 0.00
MF2 1.00000000 17,187,000.00 0.00 0.00
BF1 1.00000000 13,063,000.00 0.00 0.00
BF2 1.00000000 7,562,000.00 0.00 0.00
B3I N/A N/A 0.00 0.00
P N/A 60.00 0.00 0.00
R N/A N/A 0.00 0.00
------------------------ -------------- ------------- ------------
Totals 1.00000000 275,000,060.00 0.00 0.00
========== ============= ============== ============= ============
Group I Delinquency / Default Summary
-------------------------------------
Loans in 180 Day Default
Delinquencies 30-59 Days 60-89 Days 90-179 Days Total Extensions Bankruptcy Inventory
--------------------- ---------------- ----------- ------------- -------------- ------------ --------------- ----------------
Number of Loans 0 0 0 0 0 0 0
Principal Balance 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percent of Total (#) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Percent of Total ($) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
--------------------- ---------------- ----------- ------------- -------------- ------------ --------------- ----------------
(Table continues)
Foreclosure REO Liquidations/ Liquidation
Delinquencies Inventory Inventory Charge-Offs Losses
--------------------- -------------- -------------- -------------- ------------
Number of Loans 0 0 0 0
Principal Balance 0.00 0.00 0.00 0.00
Percent of Total (#) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Percent of Total ($) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
--------------------- -------------- -------------- -------------- ------------
-------------- -------------- -------------- ------------
Cumulative (#): 0 0 0 0
Cumulative ($): 0.00 0.00 0.00 0.00
-------------- -------------- -------------- ------------
Step Down Date: 08/15/05
Group I Distribution Tests Target Actual Servicer Termination Tests Target Actual
-------------------------------------------- ------------- ----------- ------------------------------------- --------- ---------
3 Month Average 60 Day Delinquency Ratio 0.00% 0.00% 3 Month Average 60 Day Delinquency 0.00% 0.00%
----- Ratio -----
(Shall not exceed 32% of the Sr. (Shall not exceed 42.25% of the Sr.
Enhancement %) Enhancement %)
Cumulative Realized Loss Ratio 0.00% 0.00% Cumulative Realized Loss Ratio 0.00% 0.00%
----- -----
(target not to exceed xxx) (target not to exceed 4.0%)
------ -------------- ------------ --------- ------------- ----------- ---------------- -------------------- --------- ---------
-------------- ------------
Sr. Enhance % xx.xxx%
-------------- ------------
WAC xx.xxx%
Net WAC Cap xx.xxx%
Adj Net Wac
Cap xx.xxx%
-------------- ------------
WAM xxx.xx
-------------- ------------
M-3
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
HOME EQUITY CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-C Group II
TRUST ACCOUNT: 3341790-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Principal Allocation Percentage
-------------------------------
Current Date Following Date
-------------- --------------- ------------------
Class A 100.00000000 100.00000000
Class M 0.00000000 0.00000000
Class B 0.00000000 0.00000000
-------------- --------------- ------------------
Total 100.00000000 100.00000000
-------------- --------------- ------------------
Group lI Distributions
----------------------
Unpaid
Current Interests
Coupon Interest Shortfall Interest Principal Principal Ending
Class CUSIP Rate Payment Payment Per $1000 Payment Per $1000 Balance
------------ ------------- --------- ----------- ------------- ------------- ------------- -------------- ---------------
AV1 00000XXX0 2.290000% 0.00 0.00 0.00000000 0.00 0.00000000 158,500,000.00
AVIO 00000XXX0 7.500000% 0.00 0.00 0.00000000 0.00 0.00000000 89,600,000.00
MV1 00000XXX0 3.340000% 0.00 0.00 0.00000000 0.00 0.00000000 14,500,000.00
MV2 00000XXX0 3.990000% 0.00 0.00 0.00000000 0.00 0.00000000 12,000,000.00
BV1 00000XXX0 4.840000% 0.00 0.00 0.00000000 0.00 0.00000000 9,000,000.00
BV2 xxxxxxxxx 4.840000% 0.00 0.00 0.00000000 0.00 0.00000000 6,000,000.00
B3I xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
P xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A 40.00
R xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
------------ ------------- --------- ----------- ------------- ------------- ------------- -------------- ---------------
Totals 0.00 0.00 0.00 200,000,040.00
============ ============= ========= =========== ============= ============= ============= ============== ===============
(Table Continues)
Unpaid
Interest Unpaid
Pool Original Carry Principal
Class Factor Balance Forward Shortfall
----------- ------------------ --------------- ------------- ---------------
AV1 1.00000000 158,500,000.00 0.00 0.00
AVIO 1.00000000 89,600,000.00 0.00 0.00
MV1 1.00000000 14,500,000.00 0.00 0.00
MV2 1.00000000 12,000,000.00 0.00 0.00
BV1 1.00000000 9,000,000.00 0.00 0.00
BV2 1.00000000 6,000,000.00 0.00 0.00
B3I N/A N/A 0.00 0.00
P N/A 40.00 0.00 0.00
R N/A N/A 0.00 0.00
----------- ------------------ --------------- ------------- ---------------
Totals 1.00000000 200,000,040.00 0.00 0.00
=========== ================== =============== ============= ===============
Group lI Delinquency / Default Summary
--------------------------------------
180 Day
Loans in Default
Delinquencies 31-60 Days 61-90 Days 91-179 Days Total Extensions Bankruptcy Inventory
---------------------- ------------- ----------- ------------- ------------- ------------- -------------- ---------------
Number of Loans 0 0 0 0 0 0 0
Principal Balance 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percent of Total (#) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Percent of Total ($) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
---------------------- ------------- ----------- ------------- ------------- ------------- -------------- ---------------
(Table Continues)
Foreclosure REO Liquidations/ Liquidation
Delinquencies Inventory Inventory Charge-Offs Losses
---------------------------------------- --------------- ------------- ---------------
Number of Loans 0 0 0 0
Principal Balance 0.00 0.00 0.00 0.00
Percent of Total (#) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Percent of Total ($) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
---------------------------------------- --------------- ------------- ---------------
------------------ --------------- ------------- ---------------
Cumulative (#): 0 0 0 0
Cumulative ($): 0.00 0.00 0.00 0.00
------------------ --------------- ------------- ---------------
Step Down Date: 08/15/05
Group lI Distribution Tests Target Actual Servicer Termination Tests Target Actual
----------------------------------------------------- --------- ------ ------------------------------------ -------- --------------
3 Month Average 60 Day Delinquency Ratio 0.00% 0.00% 3 Month Average 60 Day Delinquency 0.00% 0.00%
----- Ratio -----
(Shall not exceed 35% of the Sr. (Shall not exceed 42.25% of the Sr.
Enhancement %) Enhancement %)
Cumulative Realized Loss Ratio 0.00% 0.00% Cumulative Realized Loss Ratio 0.00% 0.00%
----- -----
(target not to exceed xxx) (target not to exceed 3.25%)
----- ---------------- --------------- -------------- --------- ------ ------------------- ---------------- -------- --------------
------------------ --------
Sr. Enhance % xx.xxx%
------------------ --------
WAC xx.xxx%
Net WAC Cap xx.xxx%
Adj Net WAC Cap xx.xxx%
------------------ --------
WAM xxx.xx
------------------ --------
M-4
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
HOME EQUITY CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-C Group I
TRUST ACCOUNT: 3341790-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Group I Additional Interest Distributions
-----------------------------------------
Basis Risk Carryover Distributions
----------------------------------
Coupon Rate Unpaid Basis
Adjusted Net in Excess of Basis Risk Basis Risk Interest Risk
Coupon WAC Adjusted Net Carryover Interest Payment Carryover
Class CUSIP Rate Cap Rate WAC Cap Shortfall Payment Per $1000 Shortfall
-------- --------- --------- ------------ ------------ ---------- ---------- ---------- ------------
AF1 00000XXX0 2.040000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
AF2 00000XXX0 3.827000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
AF3 00000XXX0 4.580000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
AF4 00000XXX0 5.972000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
MF1 00000XXX0 6.158000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
MF2 00000XXX0 6.981000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
BF1 00000XXX0 8.000000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
BF2 xxxxxxxxx 8.000000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
-------- --------- --------- ------------ ------------ ---------- ---------- ---------- ------------
Totals: 0.00 0.00 0.00
======== ========= ========= ============ ============ ========== ========== ========== ============
Liquidation Loss Interest Distributions
---------------------------------------
Liquidation Liquidation Interest Unpaid
Coupon Principal Liquidation Loss Interest Loss Interest Payment Liquidation
Class CUSIP Rate Balance Loss Amount Amount Payment Per $1000 Loss Interest
-------- --------- --------- -------------- ------------ ---------- ---------- ---------- ------------
AF1 00000XXX0 2.040000% 107,938,000.00 0.00 0.00 0.00 0.00000000 0.00
AF2 00000XXX0 3.827000% 15,125,000.00 0.00 0.00 0.00 0.00000000 0.00
AF3 00000XXX0 4.580000% 52,937,000.00 0.00 0.00 0.00 0.00000000 0.00
AF4 00000XXX0 5.972000% 41,250,000.00 0.00 0.00 0.00 0.00000000 0.00
MF1 00000XXX0 6.158000% 19,938,000.00 0.00 0.00 0.00 0.00000000 0.00
MF2 00000XXX0 6.981000% 17,187,000.00 0.00 0.00 0.00 0.00000000 0.00
BF1 00000XXX0 8.000000% 13,063,000.00 0.00 0.00 0.00 0.00000000 0.00
BF2 xxxxxxxxx 8.000000% 7,562,000.00 0.00 0.00 0.00 0.00000000 0.00
-------- --------- --------- -------------- ------------ ---------- ---------- ---------- ------------
Totals: 275,000,000.00 0.00 0.00 0.00 0.00
======== ========= ========= ============== ============ ========== ========== ========== ============
M-5
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
HOME EQUITY CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-C Group II
TRUST ACCOUNT: 3341790-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Group Il Additional Interest Distributions
------------------------------------------
Basis Risk Carryover Distributions
----------------------------------
Coupon Rate Unpaid Basis
Adjusted Net in Excess of Basis Risk Basis Risk Interest Risk
Coupon WAC Adjusted Net Carryover Interest Payment Carryover
Class CUSIP Rate Cap Rate WAC Cap Shortfall Payment Per $1000 Shortfall
-------- --------- --------- ------------ ------------ ---------- ---------- ---------- ------------
AV1 00000XXX0 2.290000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
MV1 00000XXX0 3.340000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
MV2 00000XXX0 3.990000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
BV1 00000XXX0 4.840000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
BV2 xxxxxxxxx 4.840000% xx.xxxxxxxx% 0.000000% 0.00 0.00 0.00000000 0.00
-------- --------- --------- ------------ ------------ ---------- ---------- ---------- ------------
Totals: 0.00 0.00 0.00
======== ========= ========= ============ ============ ========== ========== ========== ============
Liquidation Loss Interest Distributions
---------------------------------------
Liquidation Liquidation Interest Unpaid
Coupon Principal Liquidation Loss Interest Loss Interest Payment Liquidation
Class CUSIP Rate Balance Loss Amount Amount Payment Per $1000 Loss Interest
-------- --------- --------- -------------- ------------ ---------- ---------- ---------- ------------
AV1 00000XXX0 2.290000% 158,500,000.00 0.00 0.00 0.00 0.00000000 0.00
MV1 00000XXX0 3.340000% 14,500,000.00 0.00 0.00 0.00 0.00000000 0.00
MV2 00000XXX0 3.990000% 12,000,000.00 0.00 0.00 0.00 0.00000000 0.00
BV1 00000XXX0 4.840000% 9,000,000.00 0.00 0.00 0.00 0.00000000 0.00
BV2 xxxxxxxxx 4.840000% 6,000,000.00 0.00 0.00 0.00 0.00000000 0.00
-------- --------- --------- -------------- ------------ ---------- ---------- ---------- ------------
Totals: 200,000,000.00 0.00 0.00 0.00 0.00
======== ========= ========= ============== ============ ========== ========== ========== ============
M-6
EXHIBIT N
FORM OF ADDITION NOTICE
_____________, 2002
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
July 1, 2002, among Conseco Finance Corp. (the "Originator"),
Conseco Finance Securitizations Corp. (the "Seller"), U.S.
Bank National Association as Trustee (the "Trustee") and Xxxxx
Fargo Bank Minnesota, National Association, as Backup Servicer
(the "Backup Servicer") relating to Certificates for Home
Equity Loans, Series 2002-C
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the
meanings given them in the Agreement. The Seller hereby notifies the Trustee of
an assignment to the Trust of Subsequent Loans on the date and in the amounts
set forth below:
Subsequent Transfer Date: _______________
Subsequent Cut-off Date: [June 30] [July 31], 2002
-------------------------
Cut-off Date Principal Balance of Subsequent Loans to be assigned to
Trust on Subsequent Transfer Date: $_______________.
Group I $
----------------
Group II $
----------------
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
CONSECO FINANCE CORP.
By:
-------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION
By:
------------------------------
Name:
Title:
cc: Standard & Poor's
Xxxxx'x Credit Rating Co.
N-1
EXHIBIT O
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of _____________, 2002, among the undersigned (the
"Seller"), Conseco Finance Corp. (the "Originator"), U.S. Bank National
Association as Trustee (the "Trustee") and Xxxxx Fargo Bank Minnesota, National
Association, as Backup Servicer, the undersigned does hereby transfer, assign,
set over and otherwise convey, without recourse, to Conseco Finance Home Equity
Loan Trust 2002-C, created by the Agreement, to be held in trust as provided in
the Agreement, (i) all right, title and interest in the home equity loans
identified in the List of Loans attached hereto (each a "Subsequent Loan"),
including, without limitation, all related mortgages, deeds of trust, security
deeds and any and all rights to receive payments on or with respect to the
Subsequent Loans (excluding principal due before the Subsequent Cut-off Date),
(ii) all rights under any hazard, flood or other individual insurance policy on
the real estate securing a Subsequent Loan for the benefit of the creditor of
such Loan, (iii) all rights the Originator may have against the originating
lender with respect to the Subsequent Loans originated by a lender other than
the Originator, (iv) all rights under the Errors and Omissions Protection Policy
and the Fidelity Bond as such policy and bond relate to the Subsequent Loans,
(v) all rights under any title insurance policies, if applicable, on any of the
properties securing Subsequent Loans, (vi) all documents contained in the
related Loan Files, and (vii) all proceeds and products of the foregoing and all
rights of the Seller under the Subsequent Transfer Agreement dated as of the
date hereof between the Seller and Conseco Finance Corp.
Each of the Subsequent Loans constitutes a Subsequent [Group I] [Group
II] Loan under the Agreement.
This Assignment is made pursuant to and upon the representations and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others. Each of the conditions set forth in Section 2.03 of the
Agreement has been satisfied. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of __________________, 2002.
CONSECO FINANCE SECURITIZATIONS CORP.
By:
-------------------------------------
Name:
Title:
O-1
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
I, __________________________, hereby certify that I am a [title] of
Conseco Finance Securitizations Corp., a Minnesota corporation (the "Company"),
and that as such I am duly authorized to execute and deliver this certificate on
behalf of the Seller in connection with the Pooling and Servicing Agreement
dated as of July 1, 2002 (the "Agreement") among the Seller, Conseco Finance
Corp., (the "Originator"), Xxxxx Fargo Bank Minnsota, National Association, as
Backup Servicer and U.S. Bank National Association, as Trustee. All capitalized
terms used herein without definition have the respective meanings specified in
the Agreement. The undersigned further certifies that:
1. This Certificate is delivered in connection with the sale to the
Trust on __________________ (the "Subsequent Transfer Date") of Loans (the
"Subsequent Loans") identified in the lists of Loans attached to the Subsequent
Transfer Instrument of even date herewith.
2. As of the Subsequent Transfer Date, all representations and
warranties in Section 3.01 of the Agreement are true and correct; and all
representations and warranties in Section 3.03 of the Agreement with respect to
the Subsequent Loans are true to the best of his knowledge.
3. All conditions precedent to the sale of the Subsequent Loans to the
Trust under Section 2.03 of the Agreement have been satisfied. Without
limitation of the foregoing, the undersigned represents and warrants that, to
the best of his knowledge, as of the Subsequent Transfer Date, neither the
Seller nor the Originator is insolvent or will be made insolvent by the transfer
of the Subsequent Loans on the Subsequent Transfer Date and the undersigned is
not aware of any pending insolvency of the Seller or the Originator.
IN WITNESS WHEREOF, I have affixed hereunto my signature as of the ____
day of _______________________, ____.
By:
-------------------------------------
Name:
Title:
P-1
EXHIBIT Q
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS AF
CERTIFICATES, THE CLASS AF-IO CERTIFICATES, THE CLASS MF CERTIFICATES, THE CLASS
BF CERTIFICATES, THE CLASS AV CERTIFICATES, THE CLASS MV CERTIFICATES, AND THE
CLASS BV CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO PERSON MAY ACQUIRE THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF
OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT
IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") UNLESS IT
DELIVERS TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR ACTING ON BEHALF
OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THIS CODE, OR (II) THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Q-1
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN); ANY SUCH TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION
9.02 OF SUCH POOLING AND SERVICING AGREEMENT.
Class R NO.
(Subordinate) Percentage Interest: _________%
Cut-off Date: as defined in
the Pooling and Servicing
Agreement dated July 1, 2002
First Payment Date:
August 15, 2003
Servicer: Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 2002-C
Original Aggregate Certificate Principal Balance of the Trust: $475,000,000
This certifies that Green Tree Finance Corp. - Two is the registered
owner of the Residual Interest represented by this Certificate, and entitled to
certain distributions out of Conseco Finance Home Equity Loan Trust 2002-C (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
July 1, 2002, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
U.S. Bank National Association, as Trustee of the Trust (the "Trustee") and
Xxxxx Fargo Bank Minnesota, National Association, as Backup Servicer (the
"Backup Servicer"). This Class R Certificate is described in the Agreement and
is issued pursuant and subject to the Agreement. The Class R Certificate will
represent collectively the Class R-III Certificates, the Class R-II Certificates
and the Class R-I Certificates, which represent "residual interests" in the
Master REMIC, the Intermediate REMIC, and the Subsidiary REMIC, respectively. By
acceptance of this Class R Certificate the holder assents to and becomes bound
by the Agreement. To the extent not defined herein, all capitalized terms have
the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August
2002, so long as the Agreement has not been terminated, by check to the
registered Class R Certificateholder at the address appearing on the Certificate
Q-2
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the Class R-III Distribution Amount. The final scheduled Payment
Date of this Class R Certificate is August 15,2033 or the next succeeding
Business Day if such August 15, is not a Business Day.
The Class R Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Class R Certificateholder as provided
in the Agreement for payment hereunder and that the Trustee in its individual
capacity is not personally liable to the Class R Certificateholder for any
amounts payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement. By
acceptance of this Certificate, the Class R Certificateholder agrees to
disclosure of his, her or its name and address to other Certificateholders under
the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.
This Class R Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Class R Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class R Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class R
Certificate for registration of transfer at the office or agency maintained by
the Trustee in Minneapolis or St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class R Certificate evidencing the
same Class R Certificate will be issued to the designated transferee or
transferees.
Q-3
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the person in whose name this Class R
Certificate is registered as the owner hereof for all purposes, and neither the
Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The holder of this Class R Certificate, by acceptance hereof, agrees
that, in accordance with the requirements of Section 860D(b)(1) of the Code, the
federal tax return of the Trust for its first taxable year shall provide that
the Trust (exclusive of the Pre-Funding Account, the Yield Maintenance Reserve
Fund and the Basis Risk Reserve Fund) elects to be treated as one or more "real
estate mortgage investment conduits" (each, a "REMIC") under the Code for such
taxable year and all subsequent taxable years. The Certificates shall be
"regular interests" in the REMIC and the Class R Certificate shall represent the
"residual interest" in the REMIC. In addition, the holder of this Class R
Certificate, by acceptance hereof, (i) agrees to file tax returns consistent
with and in accordance with any elections, decisions or other reports made or
filed with regard to federal, state or local taxes on behalf of the Trust, and
(ii) agrees to cooperate with the Originator in connection with examinations of
the Trust's affairs by tax authorities, including administrative and judicial
proceedings, and (iii) makes the additional agreements, designations and
appointments, and undertakes the responsibilities, set forth in Section 6.06 of
the Agreement.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the State of Minnesota from time to time.
Q-4
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _________________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2002-C
By: U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------
Authorized Officer
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FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2002-C, and does hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: ______________________
By:
-------------------------------------
Signature
Q-6
EXHIBIT R
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO PERSON MAY ACQUIRE THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF
OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT
IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") UNLESS IT
DELIVERS TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR ACTING ON BEHALF
OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THIS CODE, OR (II) THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
R-1
Class P NO. R-1
Cut-off Date: Denomination: $100.00
as defined in the Pooling and Servicing
Agreement dated July 1, 2002 Aggregate Denomination of all Class P
Certificates: $100.00
First Payment Date:
August 15, 2002 Percentage Interest: 100%
Servicer: Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2002-C, CLASS P
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.-Two is the registered
owner of the undivided Percentage Interest represented by this Certificate,
entitled to certain distributions out of Conseco Finance Home Equity Loan Trust
2002-C (the "Trust"), which includes among its assets a pool of closed-end home
equity loans (the "Loans") (including, without limitation, all mortgages, deeds
of trust and security deeds relating to such Loans and any and all rights to
receive payments due on the Loans after the applicable Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of July 1, 2002, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), U.S. Bank Trust National Association, as
Trustee of the Trust (the "Trustee"), and Xxxxx Fargo Bank Minnesota, National
Association, as Backup Servicer (the "Backup Servicer"). This Certificate is
described in the Agreement and is issued pursuant and subject to the Agreement.
This Certificate represents collectively the Class P(F) Interest and Class P(V)
Interest. By acceptance of this Certificate the holder assents to and becomes
bound by the Agreement. To the extent not defined herein, all capitalized terms
have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in August
2002, so long as the Agreement has not been terminated, by check to the
registered Class P Certificateholder at the address appearing on the Certificate
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the Certificateholder's Percentage Interest of the Class P
Distribution Amount for such Payment Date. Distributions on the Class P
Certificate are limited in right of payment primarily to an amount equal to the
Prepayment Charges. The final scheduled Payment Date of this Certificate is
August 15, 2033 or the next succeeding Business Day if such August 15 is not a
Business Day.
The Class P Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Class P Certificateholder as provided
in the Agreement for payment hereunder and that the
R-2
Trustee in its individual capacity is not personally liable to the Class P
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the Class P
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator or the Servicer to
any obligation or liability in addition to those undertaken in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Class P Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class P Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class P
Certificate for registration of transfer at the office or agency maintained by
the Trustee in Minneapolis or St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or his or her attorney duly
authorized in writing, and thereupon a new Class P Certificate evidencing the
same Class P Certificate will be issued to the designated transferee or
transferees.
The Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Originator, the Seller, the Servicer, the Backup Servicer, the Trustee, the
Paying Agent or the Certificate Registrar may treat the person in whose name
this Class P Certificate is registered as the owner hereof for all purposes, and
neither the Originator, the Seller, the Servicer, the Backup Servicer, the
Trustee, the Paying Agent, the Certificate Registrar nor any such agent shall be
affected by any notice to the contrary.
R-3
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2002-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _____________________
CONSECO FINANCE HOME EQUITY LOAN
TRUST 2002-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------------------
Authorized Officer
R-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________ the within Certificate for Home Equity Loans, Series
2002-C, and does hereby irrevocably constitute and appoint _____________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated: _____________________
By:
------------------------------------
Signature
R-5
