Exhibit 4.1
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-4
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
CONSECO FINANCE CORP.
as Originator and Initial Servicer
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
Dated as of December 1, 2001
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS................................................................................................ 1
SECTION 1.01 General............................................................................................ 1
SECTION 1.02 Specific Terms..................................................................................... 1
SECTION 1.03 Calculations....................................................................................... 46
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS............................................................. 47
SECTION 2.01 Closing............................................................................................ 47
SECTION 2.02 Conditions to the Closing.......................................................................... 48
SECTION 2.03 Conveyance of the Subsequent Contracts............................................................. 50
SECTION 2.04 Acceptance by Trustee.............................................................................. 52
SECTION 2.05 REMIC Provisions................................................................................... 52
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................... 59
SECTION 3.01 Representations and Warranties Regarding the Seller................................................ 59
SECTION 3.02 Representations and Warranties Regarding Each Contract............................................. 60
SECTION 3.03 Additional Representations and Warranties.......................................................... 64
SECTION 3.04 Representations and Warranties Regarding the Contracts in the Aggregate............................ 65
SECTION 3.05 Representations and Warranties Regarding the Contract Files and Land-and-Home Contract Files....... 68
SECTION 3.06 Repurchase of Contracts or Substitution of Contracts for Breach of Representations and Warranties.. 68
SECTION 3.07 No Repurchase or Substitution Under Certain Circumstances.......................................... 72
SECTION 3.08 Staged-Funding Contract Reserve Account............................................................ 72
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS............................................... 73
SECTION 4.01 Custody of Contract Files and Land-and-Home Contract Files......................................... 73
SECTION 4.02 Filings............................................................................................ 75
SECTION 4.03 Name Change or Relocation.......................................................................... 75
SECTION 4.04 Chief Executive Office............................................................................. 76
SECTION 4.05 Costs and Expenses................................................................................. 76
ARTICLE V SERVICING OF CONTRACTS..................................................................................... 76
SECTION 5.01 Responsibility for Contract Administration......................................................... 76
SECTION 5.02 Standard of Care................................................................................... 76
SECTION 5.03 Records............................................................................................ 76
SECTION 5.04 Inspection; Computer Tape.......................................................................... 77
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SECTION 5.05 Certificate Account................................................................................ 77
SECTION 5.06 Enforcement........................................................................................ 78
SECTION 5.07 Trustee to Cooperate............................................................................... 80
SECTION 5.08 Costs and Expenses................................................................................. 80
SECTION 5.09 Maintenance of Insurance........................................................................... 80
SECTION 5.10 Repossession....................................................................................... 82
SECTION 5.11 Commingling of Funds............................................................................... 82
SECTION 5.12 Retitling; Security Interests...................................................................... 82
SECTION 5.13 Covenants, Representations and Warranties of Servicer.............................................. 83
ARTICLE VI REPORTS AND TAX MATTERS................................................................................... 84
SECTION 6.01 Monthly Reports.................................................................................... 84
SECTION 6.02 Certificate of Servicing Officer................................................................... 85
SECTION 6.03 Other Data......................................................................................... 85
SECTION 6.04 Annual Report of Accountants....................................................................... 85
SECTION 6.05 Statements to Certificateholders................................................................... 85
SECTION 6.06 Payment of Taxes................................................................................... 91
ARTICLE VII SERVICE TRANSFER......................................................................................... 92
SECTION 7.01 Event of Termination............................................................................... 92
SECTION 7.02 Transfer........................................................................................... 95
SECTION 7.03 Trustee to Act; Appointment of Successor........................................................... 96
SECTION 7.04 Notification to Certificateholders................................................................. 96
SECTION 7.05 Effect of Transfer................................................................................. 96
SECTION 7.06 Transfer of Certificate Account.................................................................... 97
ARTICLE VIII PAYMENTS................................................................................................ 97
SECTION 8.01 Monthly Payments................................................................................... 97
SECTION 8.02 Permitted Withdrawals from the Certificate Account................................................. 98
SECTION 8.03 Payments........................................................................................... 98
SECTION 8.04 [RESERVED]......................................................................................... 105
SECTION 8.05 Class C Subsidiary Certificateholder's Purchase Option; Additional Principal Distribution Amount... 106
SECTION 8.06 [RESERVED]......................................................................................... 107
SECTION 8.07 Pre-Funding Account................................................................................ 107
SECTION 8.08 Yield Maintenance Reserve Fund..................................................................... 108
SECTION 8.09 Basis Risk Reserve Fund............................................................................ 109
ARTICLE IX THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS.................................................. 110
SECTION 9.01 The Certificates................................................................................... 110
SECTION 9.02 Registration of Transfer and Exchange of Certificates.............................................. 111
SECTION 9.03 No Charge; Disposition of Void Certificates........................................................ 116
SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates.................................................. 116
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SECTION 9.05 Persons Deemed Owners.............................................................................. 116
SECTION 9.06 Access to List of Certificateholders' Names and Addresses.......................................... 116
SECTION 9.07 Authenticating Agents.............................................................................. 117
ARTICLE X INDEMNITIES................................................................................................ 117
SECTION 10.01 Seller's and Originator's Indemnities............................................................. 117
SECTION 10.02 Liabilities to Obligors........................................................................... 117
SECTION 10.03 Tax Indemnification............................................................................... 117
SECTION 10.04 Servicer's Indemnities............................................................................ 118
SECTION 10.05 Operation of Indemnities.......................................................................... 118
SECTION 10.06 REMIC Tax Matters................................................................................. 118
ARTICLE XI THE TRUSTEE............................................................................................... 118
SECTION 11.01 Duties of Trustee................................................................................. 118
SECTION 11.02 Certain Matters Affecting the Trustee............................................................. 119
SECTION 11.03 Trustee Not Liable for Certificates or Contracts.................................................. 120
SECTION 11.04 Rights of Certificateholders to Direct Trustee and to Waive Event of Termination.................. 121
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses................................................... 121
SECTION 11.06 Eligibility Requirements for Trustee.............................................................. 122
SECTION 11.07 Resignation or Removal of Trustee................................................................. 122
SECTION 11.08 Successor Trustee................................................................................. 123
SECTION 11.09 Merger or Consolidation of Trustee................................................................ 123
SECTION 11.10 Tax Returns....................................................................................... 124
SECTION 11.11 Obligor Claims.................................................................................... 124
SECTION 11.12 Appointment of Co-Trustee or Separate Trustee..................................................... 125
SECTION 11.13 Agents of Trustee................................................................................. 125
ARTICLE XII MISCELLANEOUS............................................................................................ 126
SECTION 12.01 Servicer Not to Assign Duties or Resign; Delegation of Servicing Functions........................ 126
SECTION 12.02 Maintenance of Office or Agency................................................................... 126
SECTION 12.03 Termination....................................................................................... 127
SECTION 12.04 Acts of Certificateholders........................................................................ 129
SECTION 12.05 Calculations...................................................................................... 130
SECTION 12.06 Assignment or Delegation by Originator............................................................ 130
SECTION 12.07 Amendment......................................................................................... 130
SECTION 12.08 Notices........................................................................................... 132
SECTION 12.09 Merger and Integration............................................................................ 134
SECTION 12.10 Headings.......................................................................................... 134
SECTION 12.11 Governing Law..................................................................................... 134
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EXHIBIT A-1 - Form of Class A-[1][2][3][4] Certificate............ A-1-1
EXHIBIT A-2 - Form of Class A-IO Certificate...................... A-2-1
EXHIBIT B - Form of Class M-[1][2] Certificate.................. B-1
EXHIBIT C-1 - Form of Class B-[1][2] Certificate.................. C-1-1
EXHIBIT C-2 - Form of Class B-3I Certificate...................... C-2-1
EXHIBIT D - Form of Assignment.................................. D-1
EXHIBIT E - Form of Certificate of Officer...................... E-1
EXHIBIT F - Form of Opinion of Counsel.......................... F-1
EXHIBIT G - Form of Trustee's Acknowledgement................... G-1
EXHIBIT H-1 - Form of Custodian's Acknowledgement (Land-and-Home
Contract Files)..................................... H-1-1
EXHIBIT H-2 - Form of Custodian's Acknowledgement (Contract Files) H-2-1
EXHIBIT I - Form of Certificate of Servicing Officer............ I-1
EXHIBIT J - Form of Class C [Subsidiary] [Intermediate]
[Master] Certificate................................ J-1
EXHIBIT K-1 - Form of Certificate Regarding Repurchased Contracts. K-1-1
EXHIBIT K-2 - Form of Certificate Regarding Substituted Contracts. K-2-1
EXHIBIT L - Form of Representation Letter....................... L-1
EXHIBIT M - Form of Monthly Report.............................. M-1
EXHIBIT N - Form of Addition Notice............................. N-1
EXHIBIT O - Form of Subsequent Transfer Instrument.............. O-1
EXHIBIT P - Form of Officer's Certificate (Subsequent Transfer). P-1
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AGREEMENT, dated as of December 1, 2001, 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 (directly or through a wholly owned subsidiary) of the manufactured
housing installment sales contracts and installment loan agreements described
herein (the "Originator"), and as the initial servicer (the "Servicer") and U.S.
Bank National Association, a national banking association, not in its individual
capacity but solely as Trustee (the "Trustee").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
originates, purchases and services manufactured housing installment sales
contracts and installment loan agreements, which contracts provide for
installment payments by or on behalf of the owner of the manufactured home and
grant security interests in the related manufactured home (or, in certain cases,
mortgages or deeds of trust on the real estate to which such manufactured home
is deemed permanently affixed);
WHEREAS, the Seller, the Originator, the Servicer, and the Trustee wish to
set forth the terms and conditions pursuant to which the "Trust," as hereinafter
defined, will acquire the "Contracts," as hereinafter defined, and the Servicer
will manage and service the Contracts;
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 the Agreement.
SECTION 1.02 Specific Terms.
"Accrual Period" means with respect to any Remittance Date, the period from
and including the prior Remittance Date (or, with respect to the first
Remittance Date, from and including the Closing Date) to but excluding such
Remittance Date.
"Addition Notice" means, with respect to each transfer of Subsequent
Contracts 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 less than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Contracts to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Contracts.
"Additional Contract" means a Contract identified in the List of Contracts
delivered pursuant to Section 2.02(i) that is not an Initial Contract.
"Additional Monthly Servicing Fee" means, as of any Remittance Date, a
maximum of one-twelfth of the product of 0.50% and the Pool Scheduled Principal
Balance for the immediately preceding Remittance Date.
"Additional Principal Distribution Amount" means, as to any Remittance Date
beginning with the Remittance Date in March 2002, the Amount Available remaining
after payment of the amounts described in clauses (i) through (xiii) of Section
8.03(a), subject to the limitations and conditions specified in Section
8.03(a)(xiv).
"Additional Principal Payment Date" has the meaning assigned in Section
8.05(e).
"Adjusted Amount Available" means, as to any Remittance Date, the Amount
Available (as determined on the immediately preceding Determination Date), plus
any amounts withdrawn from the Pre-Funding Account or the Staged-Funding
Contract Reserve Account and deposited in the Certificate Account.
"Adjusted Net WAC Cap Rate" means, for any Remittance Date, the Net WAC Cap
Rate minus a fraction expressed as a percentage,
(a) the numerator of which is the product of
(i) 2.50% (two hundred fifty basis points), and
(ii) the sum of the Subsidiary Interest Adjusted Principal Balance of the
(A) Class S-2(1) Interest through and including the March 2002
Remittance Date,
(B) Class S-2(2) Interest through and including the June 2002
Remittance Date,
(C) Class S-2(3) Interest through and including the September 2002
Remittance Date,
(D) Class S-2(4) Interest through and including the December 2002
Remittance Date,
(E) Class S-2(5) Interest through and including the March 2003
Remittance Date,
(F) Class S-2(6) Interest through and including the June 2003
Remittance Date,
(G) Class S-2(7) Interest through and including the September 2003
Remittance Date,
(H) Class S-2(8) Interest through and including the December 2003
Remittance Date,
(I) Class S-2(9) Interest through and including the March 2004
Remittance Date,
(J) Class S-2(10) Interest through and including the June 2004
Remittance Date,
(K) Class S-2(11) Interest through and including the September 2004
Remittance Date,
(L) Class S-2(12) Interest through and including the December 2004
Remittance Date,
(M) Class S-2(13) Interest through and including the March 2005
Remittance Date,
(N) Class S-2(14) Interest through and including the June 2005
Remittance Date,
(O) Class S-2(15) Interest through and including the September 2005
Remittance Date,
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(P) Class S-2(16) Interest through and including the December 2005
Remittance Date,
(Q) Class S-2(17) Interest through and including the March 2006
Remittance Date,
(R) Class S-2(18) Interest through and including the June 2006
Remittance Date,
(S) Class S-2(19) Interest through and including the September 2006
Remittance Date,
(T) Class S-2(20) Interest through and including the December 2006
Remittance Date,
(U) Class S-2(21) Interest through and including the March 2007
Remittance Date,
(V) Class S-2(22) Interest through and including the June 2007
Remittance Date and
(W) Class S-2(23) Interest through and including the September 2007
Remittance Date, and
(iii) 0 after the September 2007 Remittance Date, minus
(iv) the Cap Provider Fee and, if Conseco Finance is no longer the
Servicer, the Monthly Servicing Fee and
(b) the denominator of which is the sum of the Subsidiary Interest
Principal Balance of the Class S-1 and Class S-2 Interests.
"Advance Payment" means any payment by an Obligor in advance of the related
Due Period in which it would be due under such Contract 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.
"Agreement" means this Pooling and Servicing Agreement, as the same may be
amended or supplemented from time to time.
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"Amount Available" means, as to any Remittance Date, an amount equal to:
(i) the sum of
(A) the amount on deposit in the Certificate Account as of the close
of business on the last day of the related Due Period,
(B) any amounts required to be deposited in the Certificate Account
on the Business Day immediately preceding such Remittance Date
pursuant to Section 5.09(b), and
(C) all collections in respect of principal on the Contracts received
after the last day of the related Due Period up to and including
the third Business Day prior to such Remittance Date (but in no
event later than the 25th day of the month prior to such
Remittance Date), minus
(ii) the sum as of the close of business on the Business Day preceding such
Remittance Date of
(A) the Amount Held for Future Distribution,
(B) amounts permitted to be withdrawn by the Trustee from the
Certificate Account pursuant to clauses (ii)-(v), inclusive, of
Section 8.02, and
(C) with respect to all Remittance Dates other than the Remittance
Date in January 2002, all collections in respect of principal on
the Contracts received on or after the first day of the related
Due Period up to and including the third Business Day prior to
the preceding Remittance Date (but in no event later than the
25th day of the month prior to the preceding Remittance Date).
"Amount Held for Future Distribution" means, as to any Remittance Date, the
total of the amounts held in the Certificate Account on the last day of the
related Due Period on account of Advance Payments in respect of such related Due
Period (not including any portion of Advance Payments received during such
related Due Period that was distributed on the prior Remittance Date pursuant to
clause (vi) of the definition of "Formula Principal Distribution Amount").
"Applicants" has the meaning assigned in Section 9.06.
"Appraised Value" means, with respect to any Manufactured Home, the value
of such Manufactured Home as determined by a professional appraiser (who may be
an employee of the Originator).
"Assumption Fee" means any assumption or other similar fee paid by the
Obligor on a Contract.
"Authenticating Agent" means any authenticating agent appointed pursuant to
Section 9.07.
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"Average Sixty-Day Delinquency Ratio" means the arithmetic average of the
Sixty-Day Delinquency Ratios for such Remittance Date and for the two
immediately preceding Remittance Dates.
"Basis Risk Reserve Fund" means a separate trust account created and
maintained pursuant to Section 8.09 in the name of the Trust in an Eligible
Institution.
"Basis Risk Reserve Shortfall" means for any Remittance Date, the least of
(a) Excess Cashflow less distributions made on such Remittance Date pursuant to
clauses (i) through (xi) of Section 8.03(a), (b) $5,000 and (c) the excess, if
any, of (A) $5,000 over (B) the amount on deposit in the Basis Risk Reserve
Fund, less the sum of the Unpaid Basis Risk Carryover Shortfalls for such
Remittance Date (after payments under Section 8.08 and before distributions
pursuant to Section 8.09 on such Remittance Date).
"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 (i) a Saturday or a Sunday, or (ii)
another day on which banking institutions in the city in which a Person is
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.
"Cap Provider Fee" means, with respect to each Remittance Date occurring
prior to August 1, 2004, $131,600.
"Certificates" means the Class A, Class A-IO, Class M, Class B, Class B-3I,
and Class C Certificates, collectively.
"Certificate Account" means the account established and maintained pursuant
to Section 5.05.
"Certificate Owner" means the person who is the beneficial owner of a Book-
Entry Certificate.
"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 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 Regular Certificate registered in the
5
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 Regular Certificates which the Trustee knows to be so owned shall
be so disregarded.
"Class," "Class A," "Class A-IO," "Class M," "Class B," "Class B-3I" or
"Class C" means pertaining to each Class of Class A Certificates, Class A-IO
Certificates, Class M Certificates, Class B Certificates, Class B-3I
Certificates and/or Class C Certificates, as the case may be.
"Class A Certificate" means any one of the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates executed and delivered by the Trustee substantially
in the form set forth in Exhibit A-1 and evidencing an interest designated as a
"regular interest" in the Master REMIC for purposes of the REMIC Provisions.
"Class A-4 Cross-Over Date" means the Remittance Date on which the Class A
Principal Balance (after giving effect to the distributions of principal on the
Class A Certificates on such Remittance Date) is reduced to zero.
"Class A Distribution Amount" means, as to any Remittance Date, the lesser
of:
(i) the Adjusted Amount Available for such Remittance Date (less any
amounts paid to the Servicer pursuant to Section 8.03(a)(i)), and
(ii) the Class A Formula Distribution Amount for such Remittance Date;
provided that after the Class A Cross-Over Date the Class A Distribution Amount
shall be zero.
"Class A Formula Distribution Amount" means, as to any Remittance Date, an
amount equal to the sum of:
(i) one month's interest (or, as to the first Remittance Date, interest
from and including the Closing Date to but excluding the first
Remittance Date) (calculated in the manner specified in Section 1.03),
at
(A) the Class A-1 Remittance Rate on the Class A-1 Principal Balance,
(B) the Class A-2 Remittance Rate on the Class A-2 Principal Balance,
(C) the Class A-3 Remittance Rate on the Class A-3 Principal Balance,
and
(D) the Class A-4 Remittance Rate on the Class A-4 Principal Balance,
in each case, calculated immediately prior to such Remittance Date,
6
(ii) the aggregate Unpaid Class A Interest Shortfall, if any,
(iii)the Class A Percentage of the Formula Principal Distribution Amount,
(iv) any Unpaid Class A Principal Shortfall, and
(v) any Additional Principal Distribution Amount to be distributed to the
Class A Certificates pursuant to Section 8.03(a)(xiv);
provided, however, that the aggregate of all amounts distributed for all
Remittance Dates pursuant to clauses (iii), (iv) and (v) shall not exceed the
sum of the Original Class A-1 Principal Balance, the Original Class A-2
Principal Balance, the Original Class A-3 Principal Balance and the Original
Class A-4 Principal Balance.
"Class A Interest Distribution Amount" means, as to each class of Class A
certificates and any Remittance Date, the sum of the amount specified in clauses
(i)(A), (i)(B), (i)(C) and (i)(D) of the definition of the term "Class A Formula
Distribution Amount."
"Class A Interest Shortfall" means, as to any Remittance Date, the amount,
if any, by which the amount distributed to Holders of Class A Certificates on
such Remittance Date pursuant to Section 8.03(a)(iii) is less than the Class A
Interest Distribution Amount.
"Class A Percentage" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the Class A Principal
Balance and the denominator of which is the sum of:
(i) the Class A Principal Balance,
(ii) if the Class M-1 Distribution Test is satisfied, the Class M-1
Principal Balance (minus the Unpaid Class M-1 Principal Shortfall, if
any), otherwise zero,
(iii)if the Class M-2 Distribution Test is satisfied, the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal Shortfall, if
any), otherwise zero, and
(iv) if the Class B Distribution Test is satisfied, the sum of the Class B
Principal Balance (minus the Unpaid Class B-1 Principal Shortfall, if
any, and the Unpaid Class B-2 Principal Shortfall, if any) and the
Overcollateralization Amount, otherwise zero.
"Class A Principal Balance" means, as to any Remittance Date, the Original
Principal Balance of the Class A Certificates less all amounts previously
distributed to holders of Class A certificates on account of principal.
"Class A Principal Deficiency Amount" means, as to any Remittance Date, the
amount, if any, by which the Pool Scheduled Principal Balance plus any Pre-
Funded Amount is less than the Class A Principal Balance.
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"Class A Principal Shortfall" means, as to any Remittance Date, the amount,
if any, by which the amount distributed to Holders of Class A Certificates on
such Remittance Date pursuant to Section 8.03(a)(vi)(A) or (C) is less than the
Class A Percentage of the Formula Principal Distribution Amount for such
Remittance Date. In no event, however, shall the Class A Principal Shortfall
exceed the Class A Principal Balance.
"Class A-1 Remittance Rate" means 3.22% per annum.
"Class A-2 Remittance Rate" means 5.15% per annum.
"Class A-3 Remittance Rate" means 6.09% per annum.
"Class A-4 Remittance Rate" means a rate equal to the lesser of
(i) 7.36% per annum, and
(ii) the Adjusted Net WAC Cap Rate.
"Class A-IO Certificate" means any one of the Class A-IO Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-IO Formula Distribution Amount" means, as to any Remittance Date,
the sum of:
(i) one month's interest (or, as to the first Remittance Date, interest
from and including the Closing Date to but excluding the first
Remittance Date) (calculated in the manner specified in Section 1.03),
at the Class A-IO Remittance Rate on the Class A-IO Notional Principal
Amount, for such Remittance Date, and
(ii) the aggregate Unpaid Class A-IO Interest Shortfall, if any.
"Class A-IO Interest Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class A-IO
Certificates on such Remittance Date pursuant to Section 8.03(a)(ii) is less
than the Class A-IO Formula Distribution Amount.
"Class A-IO Notional Principal Amount" means, for any Remittance Date, an
amount equal to (i) through and including the Remittance Date in September 2007,
the lesser of (A) the Notional Principal Amount, and (B) the sum of the Pool
Scheduled Principal Balance and the amount on deposit in the Pre-Funding Account
and (ii) thereafter, zero.
"Class A-IO Remittance Rate" means 2.50% per annum.
"Class B Certificate" means any one of the Class B-1 or Class B-2
Certificates.
"Class B Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that:
8
(i) such Remittance Date occurs in or after January 2006;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 6.25%;
(iii)the Cumulative Realized Losses Test for such Remittance Date is
satisfied;
(iv) the Current Realized Loss Ratio for such Remittance Date is less than
or equal to 3.50%;
(v) the fraction, expressed as a percentage, the numerator of which is the
sum of the Class B Principal Balance and the Overcollateralization
Amount as of such Remittance Date and the denominator of which is the
Pool Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 16.725%; and
(vi) the Class B Principal Balance plus the Overcollateralization Amount as
of such Remittance Date is greater than or equal to $9,500,000.
"Class B Percentage" means:
(i) as to any Remittance Date on which the Class B Distribution Test is
not satisfied and the Class A Principal Balance, the Class M-1
Principal Balance and the Class M-2 Principal Balance have not been
reduced to zero, 0%, and
(ii) as to any other Remittance Date, a fraction, expressed as a
percentage, the numerator of which is the sum of the Class B Principal
Balance and the Overcollateralization Amount and the denominator of
which is the sum of:
(A) the Class A Principal Balance,
(B) the Class M-1 Principal Balance (minus the Unpaid Class M-1
Principal Shortfall, if any),
(C) the Class M-2 Principal Balance (minus the Unpaid Class M-2
Principal Shortfall, if any),and
(D) the sum of the Class B Principal Balance (minus the Unpaid Class
B-1 Principal Shortfall, if any, and the Unpaid Class B-2
Principal Shortfall, if any) and the Overcollateralization
Amount.
"Class B Principal Balance" means, as to any Remittance Date, the sum of
the Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B-1 Adjusted Principal Balance" means, as of any Remittance Date,
the Class B-1 Principal Balance as of that Remittance Date minus the Class B-1
Liquidation Loss Amount (if any) as of the prior Remittance Date.
9
"Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-1 Cross-Over Date" means the Remittance Date on which the Class B-
1 Principal Balance (after giving effect to the distributions of principal on
the Class B-1 Certificates on such Remittance Date) is reduced to zero.
"Class B-1 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date, interest
from and including the Closing Date to but excluding the first
Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class B-1 Remittance Rate on the Class B-1 Adjusted Principal
Balance as of such Remittance Date,
(ii) any Unpaid Class B-1 Interest Shortfall,
(iii)the Class B Percentage of the Formula Principal Distribution Amount,
(iv) any Unpaid Class B-1 Principal Shortfall,
(v) any Additional Principal Distribution Amount to be distributed to the
Class B-1 Certificates pursuant to Section 8.03(a)(xiv),
(vi) any Class B-1 Liquidation Loss Interest Amount, and
(vii)any Unpaid Class B-1 Liquidation Loss Interest Shortfall;
provided, however, that on the Class M-2 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class M-2 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the second
proviso to such term shall instead be included in clause (iii) or (v) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed pursuant to clauses (iii), (iv) and (v) of this definition shall not
exceed the Original Class B-1 Principal Balance.
"Class B-1 Interest Deficiency Amount" means, as to the Class B-1
Certificates and any Remittance Date, the difference, if any, between:
(i) the sum of the amounts described in clauses (i), (ii), (vi) and (vii)
of the definition of the term "Class B-1 Formula Distribution Amount,"
and
(ii) the amount available for distribution to the Class B-1
Certificateholders pursuant to Section 8.03(a)(vi)(A) and (B) and
Section 8.03(a)(x)(C) and (D) on such Remittance Date.
10
"Class B-1 Interest Distribution Amount" means, as to any Remittance Date,
the amount specified in clause (i) of the definition of "Class B-1 Formula
Distribution Amount" plus the Unpaid Class B-1 Interest Shortfall, if any.
"Class B-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between:
(i) the sum of:
(A) the amount distributed to Holders of the Class B-1 Certificates
on such Remittance Date pursuant to Sections 8.03(a)(vi)(A) and
(B), and
(B) any amount distributed to the Holders of the Class B-1
Certificates pursuant to Section 8.03(d) on such Remittance Date,
and
(ii) the Class B-1 Interest Distribution Amount for such Remittance Date.
"Class B-1 Liquidation Loss Amount" means, as of any Remittance Date, the
lesser of:
(i) the amount, if any, by which the sum of the Class A Principal Balance,
the Class M-1 Principal Balance, the Class M-2 Principal Balance and
the Class B-1 Principal Balance for such Remittance Date exceeds the
sum of the Pre-Funded Amount plus the Pool Scheduled Principal Balance
for such Remittance Date (after giving effect to all distributions of
principal on the Class A, Class M-1, Class M-2 and Class B-1
Certificates on such Remittance Date), and
(ii) the Class B-1 Principal Balance (after giving effect to all
distributions of principal on the Class B-1 Certificates on such
Remittance Date).
"Class B-1 Liquidation Loss Interest Amount" means, as to any Remittance
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class B-1 Remittance Rate on the Class B-1 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, as to any Remittance
Date, the amount, if any, by which the amount distributed to Holders of the
Class B-1 Certificates on such Remittance Date pursuant to Section 8.03(a)(x)(C)
is less than the Class B-1 Liquidation Loss Interest Amount for such Remittance
Date.
"Class B-1 Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class B-1 Certificates less all amounts
previously distributed to Holders of Class B-1 Certificates on account of
principal.
"Class B-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(x)(B) is less
than the Class B Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class B-1 Principal
Shortfall exceed the Class B-1 Principal Balance.
11
"Class B-1 Remittance Rate" means a rate equal to the lesser of
(i) 9.40% per annum, and
(ii) the Adjusted Net WAC Cap Rate.
"Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (i) the Remaining Amount Available and (ii) the Class B-2 Formula
Distribution Amount for such Remittance Date.
"Class B-2 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date, interest
from and including the Closing Date to but excluding the first
Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class B-2 Remittance Rate on the Class B-2 Principal Balance as
calculated immediately prior to such Remittance Date,
(ii) any Unpaid Class B-2 Interest Shortfall,
(iii)the amount set forth in (A) or (B) below, as applicable:
(A) if such Remittance Date is prior to or on the Class B-1 Cross-
Over Date, zero, or
(B) if such Remittance Date is after the Class B-1 Cross-Over Date,
the Class B Percentage of the Formula Principal Distribution
Amount,
(iv) any Unpaid Class B-2 Principal Shortfall, and
(v) any Additional Principal Distribution Amount to be distributed to the
Class B-2 Certificates pursuant to Section 8.03(a)(xiv);
provided, however, that on the Class B-1 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class B-1 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the second
proviso to such term shall instead be included in clause (iii) or (v) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed pursuant to clauses (iii), (iv) and (v) of this definition shall not
exceed the Original Class B-2 Principal Balance.
12
"Class B-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(xi)(A) and (B)
is less than the sum of the amounts specified in clauses (i) and (ii) of the
definition of the term "Class B-2 Formula Distribution Amount."
"Class B-2 Liquidation Loss Amount" means, as to any Remittance Date, the
lesser of
(i) the amount, if any, by which the sum of the Class A Principal Balance,
the Class M-1 Principal Balance, the Class M-2 Principal Balance, the
Class B-1 Principal Balance and the Class B-2 Principal Balance for
such Remittance Date exceeds the sum of the Pre-Funded Amount plus the
Pool Scheduled Principal Balance for such Remittance Date (after
giving effect to all distributions of principal on the Class A, Class
M-1, Class M-2, Class B-1 and Class B-2 Certificates on such
Remittance Date), and
(ii) the Class B-2 Principal Balance (after giving effect to all
distributions of principal on the Class B-2 Certificates on such
Remittance Date).
"Class B-2 Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class B-2 Certificates less all amounts
previously distributed to Holders of Class B-2 Certificates on account of
principal.
"Class B-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(xi)(D) is less
than the amount described in Section 8.03(a)(xi)(D) for such Remittance Date.
In no event, however, shall the Class B-2 Principal Shortfall exceed the Class
B-2 Principal Balance.
"Class B-2 Remittance Rate" means a rate equal to the lesser of
(i) 9.40% per annum, and
(ii) the Adjusted Net WAC Cap Rate.
"Class B-3I Certificate" means any one of the Class B-3I Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-2 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 Remittance Date, an
amount equal to the sum of (A) the lesser of (i) the Class B-3I Formula
Distribution Amount for such Remittance Date and (ii) the Adjusted Amount
Available for such Remittance Date minus all amounts distributed on that
Remittance Date under Sections 8.03(a)(i)-(xiv) and (B) the amount, if any, by
which the Class B-3I Formula Distribution Amount on the preceding Remittance
Date exceeds the Class B-3I Distribution Amount on such preceding Remittance
Date.
13
"Class B-3I Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the product of (i) the Class B-3I Remittance Rate for such
Remittance Date and (ii) the Class B-3I Notional Amount.
"Class B-3I Notional Amount" means $475,000,000 for the first Remittance
Date and, for any other Remittance Date, the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount as of the immediately preceding Remittance
Date.
"Class B-3I Remittance Rate" means the excess of (i) the Adjusted Net WAC
Cap Rate over (ii) the product of (A) two and (B) the weighted average
Remittance Rate of the Class I-Accrual Interest and the Intermediate REMIC
Accretion Directed Interests, provided that for this purpose the Remittance Rate
for the Class I-Accrual Interest shall be subject to a cap of zero and the
Remittance Rate for each Intermediate REMIC Accretion Directed Interest shall
not exceed the Remittance Rate on its Corresponding Certificate Class.
"Class C Certificate" means any one of the Class C Subsidiary Certificate,
Class C Intermediate or Class C Master Certificate.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Intermediate Certificate" means a Class C Intermediate Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Intermediate REMIC for purposes of the REMIC Provisions.
"Class C Intermediate Distribution Amount" means, as to any Remittance
Date, the amount, if any, distributable pursuant to Section 8.03(b)(iii).
"Class C Master Certificate" means a Class C Master Certificate executed
and delivered by the Trustee substantially in the form of Exhibit J, and
evidencing an interest designated as the "residual interest" in the Master REMIC
for purposes of the REMIC Provisions.
"Class C Master Distribution Amount" means, as to any Remittance Date, the
amount, if any, distributable pursuant to Section 8.03(a)(xvii).
"Class C Subsidiary Certificate" means a Class C Subsidiary Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Subsidiary REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, as to any Remittance Date,
the amounts, if any, distributable pursuant to Section 8.03(c)(iv).
"Class I-AIO" means any one or more individual components of the Class I-
AIO Interest, as the case may be.
14
"Class I-AIO Interest" means the Class I-AIO(1), Class I-AIO(2), Class I-
AIO(3), Class I-AIO(4), Class I-AIO(5), Class I-AIO(6), Class I-AIO(7), Class I-
AIO(8), Class I-AIO(9), Class I-AIO(10), Class I-AIO(11), Class I-AIO(12), Class
I-AIO(13), Class I-AIO(14), Class I-AIO(15), Class I-AIO(16), Class I-AIO(17),
Class I-AIO(18), Class I-AIO(19), Class I-AIO(20), Class I-AIO(21), Class I-
AIO(22), and Class I-AIO(23) Interests, collectively.
"Class I-A Interest," "Class I-AIO Interest," "Class I-B1 Interest," "Class
I-B2 Interest," "Class I-M1 Interest," "Class I-M2 Interest" and "Class I-
Accrual Interest" means, respectively, a regular interest in the Intermediate
REMIC which is held as an asset of the Master REMIC, is entitled to monthly
distributions as provided in Section 8.03(b), and has the Original Principal
Balance, and bears interest at the Pass-Through Rate, specified in Section
2.05(c).
"Class M Certificate" means any one of the Class M-1 or M-2 Certificates
executed and delivered by the Trustee.
"Class M-1 Adjusted Principal Balance" means, as to any Remittance Date,
the Class M-1 Principal Balance as of that Remittance Date minus the Class M-1
Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-1 Basis Risk Carryover Shortfall" means, for any Remittance Date
and the related Accrual Period, the excess, if any of
(i) an amount equal to interest on the Class M-1 Principal Balance at the
lesser of LIBOR plus the Class M-1 Margin and 15.00% per annum, over
(ii) the Class M -1 Current Interest Amount.
"Class M-1 Basis Risk Reserve Shortfall" means for any Remittance Date, the
least of (a) Excess Cashflow less distributions made on such Remittance Date
pursuant to clauses (i) through (xi) of Section 8.03(a), (b) $5,000 and (c) the
excess, if any, of (A) $5,000 over (B) the amount on deposit in the Basis Risk
Reserve Fund, less the sum of the Unpaid Class M-1 Basis Risk Carryover
Shortfalls for such Remittance Date (after payments under Section 8.08 and
before distributions pursuant to Section 8.09 on such Remittance Date).
"Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
"Class M-1 Cross-Over Date" means the Remittance Date on which the Class M-
1 Principal Balance (after giving effect to the distributions of principal on
the Class M-1 Certificates on such Remittance Date) is reduced to zero.
"Class M-1 Current Interest Amount" means, with respect to any Remittance
Date, an amount equal to interest accrued during the related Accrual Period at
the Class M-1 Interest Rate on the Class M-1 Principal Balance.
"Class M-1 Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that:
15
(i) such Remittance Date occurs in or after January 2006;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 6.25%;
(iii) the Cumulative Realized Losses Test for such Remittance Date is
satisfied;
(iv) the Current Realized Loss Ratio for such Remittance Date is less than
or equal to 3.50%; and
(v) the fraction, expressed as a percentage, the numerator of which is the
sum of the Class M-1 Principal Balance, the Class M-2 Principal
Balance, the Class B Principal Balance and the Overcollateralization
Amount as of such Remittance Date and the denominator of which is the
Pool Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 34.125%.
"Class M-1 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date, interest
from and including the Closing Date to but excluding the first
Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class M-1 Remittance Rate on the Class M-1 Adjusted Principal
Balance as of such Remittance Date,
(ii) the aggregate Unpaid Class M-1 Interest Shortfall, if any,
(iii)the Class M-1 Percentage of the Formula Principal Distribution
Amount,
(iv) any Unpaid Class M-1 Principal Shortfall,
(v) any Additional Principal Distribution Amount to be distributed to the
Class M-1 Certificates pursuant to Section 8.03(a)(xiv),
(vi) any Class M-1 Liquidation Loss Interest Amount, and
(vii)any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
provided, however, that on the Class A Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class A Formula Distribution Amount" (assuming
a sufficient Amount Available) but for the operation of the proviso to such term
shall instead be included in clause (iii) or (v) of this definition, as
applicable; provided, further, that the aggregate of all amounts distributed for
all Remittance Dates pursuant to clauses (iii), (iv) and (v) shall not exceed
the Original Class M-1 Principal Balance.
"Class M-1 Interest Deficiency Amount" means, as to the Class M-1
Certificates and any Remittance Date, the difference, if any, between:
16
(i) the sum of the amounts described in clauses (i), (ii), (vi) and (vii)
of the definition of the term "Class M-1 Formula Distribution Amount,"
and
(ii) the amount available for distribution to the Class M-1
Certificateholders pursuant to Section 8.03(a)(iv)(A) and (B) and
Section 8.03(a)(viii)(C) and (D) on such Remittance Date.
"Class M-1 Interest Distribution Amount" means, as to any Remittance Date,
the amount specified in clause (i) of the definition of the term "Class M-1
Formula Distribution Amount" plus the Unpaid Class M-1 Interest Shortfall, if
any.
"Class M-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between:
(i) the sum of:
(A) the amount distributed to Holders of the Class M-1 Certificates
on such Remittance Date pursuant to Section 8.03(a)(iv)(A) and
(B), and
(B) any amount distributed to the Holders of the Class M-1
Certificates pursuant to Section 8.03(d) on such Remittance Date,
and
(ii) the Class M-1 Interest Distribution Amount for such Remittance Date.
"Class M-1 Liquidation Loss Amount" means, as to any Remittance Date, the
lesser of:
(i) the amount, if any, by which the sum of the Class A Principal Balance
and the Class M-1 Principal Balance for such Remittance Date exceeds
the sum of the Pre-Funded Amount plus the Pool Scheduled Principal
Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A and Class M-1 Certificates
on such Remittance Date), and
(ii) the Class M-1 Principal Balance (after giving effect to all
distributions of principal on the Class M-1 Certificates on such
Remittance Date).
"Class M-1 Liquidation Loss Interest Amount" means, as to any Remittance
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class M-1 Remittance Rate on the Class M-1 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class M-1 Liquidation Loss Interest Shortfall" means, as to any Remittance
Date, the amount, if any, by which the amount distributed to Holders of the
Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(viii)(C) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-1 Margin" means 1.75% per annum.
17
"Class M-1 Percentage" means:
(i) as to any Remittance Date prior to the Class A Cross-Over Date and on
which the Class M-1 Distribution Test is not satisfied, 0%, and
(ii) as to any Remittance Date after the Class A Cross-Over Date or on
which the Class M-1 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-1
Principal Balance (minus the Unpaid Class M-1 Principal Shortfall, if
any) and the denominator of which is the sum of:
(A) the Class A Principal Balance,
(B) the Class M-1 Principal Balance (minus the Unpaid Class M-1
Principal Shortfall, if any),
(C) if the Class M-2 Distribution Test is satisfied, the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal
Shortfall, if any), otherwise zero, and
(D) if the Class B Distribution Test is satisfied, the sum of the
Class B Principal Balance and the Overcollateralization Amount,
otherwise zero.
"Class M-1 Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class M-1 Certificates less all amounts
previously distributed to Holders of Class M-1 Certificates on account of
principal.
"Class M-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(viii)(B) is
less than the Class M-1 Percentage of the Formula Principal Distribution Amount
for such Remittance Date. In no event, however, shall the Class M-1 Principal
Shortfall exceed the Class M-1 Principal Balance.
"Class M-1 Remittance Rate" means a floating rate per annum equal to the
least of
(i) LIBOR plus the Class M-1 Margin,
(ii) the Adjusted Net WAC Cap Rate, and
(iii)15.00% per annum.
"Class M-2 Adjusted Principal Balance" means, as to any Remittance Date,
the Class M-2 Principal Balance as of that Remittance Date minus the Class M-2
Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
18
"Class M-2 Cross-Over Date" means the Remittance Date on which the Class M-
2 Principal Balance (after giving effect to the distributions of principal on
the Class M-2 Certificates on such Remittance Date) is reduced to zero.
"Class M-2 Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that:
(i) such Remittance Date occurs in or after January 2006;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 6.25%;
(iii)the Cumulative Realized Losses Test for such Remittance Date is
satisfied;
(iv) the Current Realized Loss Ratio for such Remittance Date is less than
or equal to 3.50%; and
(v) the fraction, expressed as a percentage, the numerator of which is the
sum of the Class M-2 Principal Balance, the Class B Principal Balance
and the Overcollateralization Amount as of such Remittance Date and
the denominator of which is the Pool Scheduled Principal Balance as of
the immediately preceding Remittance Date, is equal to or greater than
24.000%.
"Class M-2 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date, interest
from and including the Closing Date to but excluding the first
Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class M-2 Remittance Rate on the Class M-2 Adjusted Principal
Balance as of such Remittance Date,
(ii) the aggregate Unpaid Class M-2 Interest Shortfall, if any,
(iii)the Class M-2 Percentage of the Formula Principal Distribution
Amount,
(iv) any Unpaid Class M-2 Principal Shortfall,
(v) any Additional Principal Distribution Amount to be distributed to the
Class M-2 Certificates pursuant to Section 8.03(a)(xiv),
(vi) any Class M-2 Liquidation Loss Interest Amount, and
(vii)any Unpaid Class M-2 Liquidation Loss Interest Shortfall;
provided, however, that on the Class M-1 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class M-1 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the proviso to
such term shall instead be included in clause (iii) or (v) of this
19
definition, as applicable; provided, further, that the aggregate of all amounts
distributed for all Remittance Dates pursuant to clauses (iii), (vi) and (v)
shall not exceed the Original Class M-2 Principal Balance.
"Class M-2 Interest Deficiency Amount" means, as to the Class M-2
Certificates and any Remittance Date, the difference, if any, between
(i) the sum of the amounts described in clauses (i), (ii), (vi) and (vii)
of the definition of the term "Class M-2 Formula Distribution Amount"
and
(ii) the amount available for distribution to the Class M-2
Certificateholders pursuant to Section 8.03(a)(v)(A) and (B) and
Section 8.03(a)(ix)(C) and (D) on such Remittance Date.
"Class M-2 Interest Distribution Amount" means, as to any Remittance Date,
the amount specified in clause (i) of the definition of the term "Class M-2
Formula Distribution Amount" plus the Unpaid Class M-2 Interest Shortfall, if
any.
"Class M-2 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between
(i) the sum of:
(A) the amount distributed to Holders of the Class M-2 Certificates
on such Remittance Date pursuant to Section 8.03(a)(v)(A) and
(B), and
(B) any amount distributed to the Holders of the Class M-2
Certificates pursuant to Section 8.03(d) on such Remittance Date,
and
(ii) the Class M-2 Interest Distribution Amount for such Remittance Date.
"Class M-2 Liquidation Loss Amount" means, as to any Remittance Date, the
lesser of:
(i) the amount, if any, by which the sum of the Class A Principal Balance,
the Class M-1 Principal Balance and the Class M-2 Principal Balance
for such Remittance Date exceeds the sum of the Pre-Funded Amount plus
the Pool Scheduled Principal Balance for such Remittance Date (after
giving effect to all distributions of principal on the Class A, Class
M-1 and Class M-2 Certificates on such Remittance Date), and
(ii) the Class M-2 Principal Balance (after giving effect to all
distributions of principal on the Class M-2 Certificates on such
Remittance Date).
20
"Class M-2 Liquidation Loss Interest Amount" means, as to any Remittance
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class M-2 Remittance Rate on the Class M-2 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, as to any Remittance
Date, the amount, if any, by which the amount distributed to Holders of the
Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(ix)(C) is less than the Class M-2 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-2 Percentage" means:
(i) as to any Remittance Date prior to the Class M-1 Cross-Over Date and
on which the Class M-2 Distribution Test is not satisfied, 0%, and
(ii) as to any Remittance Date after the Class M-1 Cross-Over Date or on
which the Class M-2 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal Shortfall, if
any) and the denominator of which is the sum of:
(A) the Class A Principal Balance,
(B) the Class M-1 Principal Balance (minus the Unpaid Class M-2
Principal Shortfall, if any),
(C) the Class M-2 Principal Balance (minus the Unpaid Class M-2
Principal Shortfall, if any), and
(D) if the Class B Distribution Test is satisfied, the sum of the
Class B Principal Balance (minus the Unpaid Class B-1 Principal
Shortfall, if any, and the Unpaid Class B-2 Principal Shortfall,
if any) and the Overcollateralization Amount, otherwise zero.
"Class M-2 Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class M-2 Certificates less all amounts
previously distributed to Holders of Class M-2 Certificates on account of
principal.
"Class M-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(ix)(B) is less
than the Class M-2 Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class M-2 Principal
Shortfall exceed the Class M-2 Principal Balance.
"Class M-2 Remittance Rate" means a rate equal to the lesser of
(i) 8.59% per annum, and
(ii) the Adjusted Net WAC Cap Rate.
"Class of Uncertificated Intermediate Interests" means any one of the Class
I-A, Class I-AIO, Class I-M1, Class I-M2, Class I-B1, Class I-B2 and Class I-
Accrual Interests.
21
"Class of Uncertificated Subsidiary Interests" means any one of the Class
S-1 or Class S-2 Interests.
"Class Principal Balance" means, as to any Remittance Date and each Class
of Certificates, the Original Principal Balance of such Class less all amounts
previously distributed to Holders of such Class of Certificates on account of
principal.
"Class S-1 Interest", "Class S-2(1) Interest", "Class S-2(2) Interest",
"Class S-2(3) Interest", "Class S-2(4) Interest", "Class S-2(5) Interest",
"Class S-2(6) Interest", "Class S-2(7) Interest", "Class S-2(8) Interest",
"Class S-2(9) Interest", "Class S-2(10) Interest", "Class S-2(11) Interest",
"Class S-2(12) Interest", "Class S-2(13) Interest", "Class S-2(14) Interest",
"Class S-2(15) Interest", "Class S-2(16) Interest", "Class S-2(17) Interest",
"Class S-2(18) Interest", "Class S-2(19) Interest", "Class S-2(20) Interest",
"Class S-2(21) Interest", "Class S-2(22) Interest" and "Class S-2(23) 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 8.03(c), and has the Original Principal Balance and bears
interest at the Remittance Rate, specified in Section 2.05(d).
"Class S-2 Interest" means any one of the Class S-2(1) Interest, Class S-
2(2) Interest, Class S-2(3) Interest, Class S-2(4) Interest, Class S-2(5)
Interest, Class S-2(6) Interest, Class S-2(7) Interest, Class S-2(8) Interest,
Class S-2(9) Interest, Class S-2(10) Interest, Class S-2(11) Interest, Class S-
2(12) Interest, Class S-2(13) Interest, Class S-2(14) Interest, Class S-2(15)
Interest, Class S-2(16) Interest, Class S-2(17) Interest, Class S-2(18)
Interest, Class S-2(19) Interest, Class S-2(20) Interest, Class S-2(21)
Interest, Class S-2(22) Interest and Class S-2(23) Interests.
"Closing Date" means December 18, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" means, with respect to any Contract :
(i) the security interests granted by or on behalf of the related Obligor
with respect thereto, including a first priority perfected security
interest in the related Manufactured Home or Mortgage or the related
Mortgaged Property, as applicable,
(ii) all other security interests or liens and property subject thereto
from time to time purporting to secure payment of such Contract,
whether pursuant to the agreement giving rise to such Contract or
otherwise, together with all financing statements signed by the
Obligor describing any collateral securing such Contract,
(iii)all guarantees, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of
such Contract whether pursuant to the agreement giving rise to such
Contract or otherwise, and
(iv) all records in respect of such Contract.
22
"Computer Tape" means the computer tape generated by the Originator which
provides information relating to the Contracts and which was used by the
Originator in selecting the Contracts, and includes the master file and the
history file.
"Contract File" means, as to each Contract other than a Land-and-Home
Contract:
(i) the original copy of the Contract (or executed lost note affidavit,
together with a copy of the note),
(ii) either:
(A) the original title document for the related Manufactured Home or
a duplicate certified by the appropriate governmental authority
which issued the original thereof or the application for such
title document, or
(B) if the laws of the jurisdiction in which the related Manufactured
Home is located do not provide for the issuance of title
documents for manufactured housing, other evidence of ownership
of the related Manufactured Home which is customarily relied upon
in such jurisdiction as evidence of title to a manufactured
housing unit,
(iii)evidence of one or more of the following types of perfection of the
security interest in the related Manufactured Home granted by such
Contract, as appropriate:
(A) notation of such security interest on the title document,
(B) a financing statement meeting the requirements of the UCC, with
evidence of recording indicated thereon, or
(C) such other evidence of perfection of a security interest in a
manufactured housing unit as is customarily relied upon in the
jurisdiction in which the related Manufactured Home is located,
(iv) the assignment of the Contract from the originator (if other than
Conseco Finance Corp.) to the Originator,
(v) evidence of any other Collateral Security, including with respect to a
Land-in-Lieu Contract, the mortgage or deed of trust, and
(vi) any extension, modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the rate of
interest specified in that Contract and computed on a precomputed basis with an
actuarial rebate of unearned interest upon prepayment, provided that the rebate
upon prepayment of Contracts originated in California or Oklahoma may be
computed on the simple interest method if so required by applicable law or
regulations.
23
"Contracts" means the manufactured housing installment sales contracts and
installment loan agreements, including any Land-and-Home Contracts, described in
the List of Contracts and constituting part of the corpus of the Trust, which
Contracts are to be assigned and conveyed by the Seller to the Trust, and
includes, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date, but excluding any rights to receive payments which are due
pursuant thereto on or before the applicable Cut-off Date.
"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.
"Corresponding Certificate Class" means, with respect to each Class of
Uncertificated Intermediate Interests, as follows:
Uncertificated Intermediate Interest Corresponding Certificate Class
------------------------------------ -------------------------------
Class I-A1 Class A-1
Class I-A2 Class A-2
Class I-A3 Class A-3
Class I-A4 Class A-4
Class I-AIO Class A-IO
Class I-M1 Class M-1
Class I-M2 Class M-2
Class I-B1 Class B-1
Class I-B2 Class B-2
"Counsel for the Originator and Seller" means Xxxxxx & Xxxxxxx LLP, or
other legal counsel for the Originator and the Seller.
"Cumulative Realized Losses" means, as to any Remittance Date, the sum of
the Realized Losses for that Remittance Date and each preceding Remittance Date
since the Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied" for
any Remittance Date:
(i) if such Remittance Date occurs between January 1, 2006 and December
31, 2006 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 7.00% of the Cut-off Date
Pool Principal Balance;
(ii) if such Remittance Date occurs between January 1, 2007 and December
31, 2007 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 8.75% of the Cut-off Date
Pool Principal Balance;
(iii)if such Remittance Date occurs between January 1, 2008 and December
31, 2008 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 11.75% of the Cut-off Date
Pool Principal Balance; and
24
(iv) if such Remittance Date occurs on or after January 1, 2009, that the
Cumulative Realized Losses as of such Remittance Date are less than or
equal to 13.25% of the Cut-off Date Pool Principal Balance.
"Current Realized Loss Ratio" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate Realized
Losses for such Remittance Date and each of the two immediately preceding
Remittance Dates, multiplied by four, and the denominator of which is the
arithmetic average of the Pool Scheduled Principal Balance as of the third
preceding Remittance Date and the Pool Scheduled Principal Balance as of such
Remittance Date.
"Custodian" means at any time the Trustee or a financial institution
organized under the laws of the United States or any State, which is subject to
supervision and examination by Federal or State authorities and which is not the
Originator or an Affiliate of the Originator, that is acting at such time as
Custodian of the Land-and-Home Contract Files and Contract Files pursuant to
Section 4.01.
"Cut-off Date" means October 31, 2001 with respect to the Initial Contracts
and November 30, 2001 with respect to the Additional Contracts; and with respect
to each Subsequent Contract, the applicable Subsequent Cut-off Date.
"Cut-off Date Pool Principal Balance" means the aggregate of the Cut-off
Date Principal Balances of the Contracts.
"Cut-off Date Principal Balance" means, as to any Contract, the unpaid
principal balance thereof at the applicable Cut-off Date, after giving effect to
all installments of principal due on or prior thereto. With respect to any
Staged-Funding Contract, the Cut-off Date Principal Balance means the principal
amount stated on such Contract.
"Deficiency Amount" means,
(i) for any Remittance Date occurring prior to the Payment Date in
September 2033, the excess, if any, of Required Interest Distributions
over the Net Available Amount; and
(ii) for the Remittance Date in September 2033, the sum of
(A) the excess, if any, of the Required Interest Distributions over
the Net Available Amount, and
(B) the Class A Principal Balance after giving effect to all
distributions of principal on the Class A Certificates on such
Remittance Date.
"Defaulted Contract" means a Contract with respect to which the Servicer
commenced repossession or foreclosure procedures, made a sale of such Contract
to a third party for repossession, foreclosure or other enforcement, or as to
which there was a payment delinquent 180 or more days (excluding any Contract
deemed delinquent solely because the Obligor's required monthly payment was
reduced as a result of bankruptcy or similar proceedings).
25
"Delinquent Contract" means an Initial or Additional Contract that is 60 or
more days delinquent as of the Closing Date, or a Subsequent Contract that is 60
or more days delinquent as of the applicable Subsequent Transfer Date.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is CEDE & CO., as the registered Holder of:
(i) one certificate evidencing in initial aggregate $105,000,000.00 in
Original Principal Balance of Class A-1 Certificates,
(ii) one certificate evidencing in initial aggregate $90,000,000.00 in
Original Principal Balance of Class A-2 Certificates,
(iii)one certificate evidencing in initial aggregate $38,000,000.00 in
Original Principal Balance of Class A-3 Certificates,
(iv) one certificate evidencing in initial aggregate $143,437,000.00 in
Original Principal Balance of Class A-4 Certificates,
(v) one certificate evidencing $95,000,000.00 in Original Notional
Principal Amount of Class A-IO Certificates,
(vi) one certificate evidencing $32,063,000.00 in Original Principal
Balance of Class M-1 Certificates,
(vii)one certificate evidencing $23,037,000.00 in Original Principal
Balance of Class M-2 Certificates,
(viii)one certificate evidencing $23,275,000.00 in Original Principal
Balance of Class B-1 Certificates, and
(ix) one certificate evidencing $20,188,000.00 in Original Principal
Balance of the Class B-2 Certificates,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in 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 third Business Day preceding each Remittance
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
"Due Date" means, as to any Contract, the date of the month on which the
scheduled monthly payment for such Contract is due.
26
"Due for Payment" means the Remittance Date on which Insured Amounts are
due.
"Due Period" means with respect to any Remittance Date other than the
Remittance Date in January 2002, the period from and including the 16th day of
the second month preceding such Remittance Date, to and including the 15th day
of the month immediately preceding such Remittance Date, and with respect to the
Remittance Date in January 2002, the period from and including November 1, 2001
and including December 15, 2001.
"Electronic Ledger" means the electronic master record of installment sale
contracts of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following:
(i) an account maintained with an Eligible Institution;
(ii) 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 (or, if such depository institution or trust
company is a subsidiary of a bank holding company system, the bank
holding company shall have capital and surplus) of not less than
$50,000,000 and the securities of such depository institution or trust
company (or, if such depository institution or trust company is a
subsidiary of a bank holding company system and such depository
institution's or trust company's securities are not rated, the
securities of the bank holding company) shall have a credit rating
from each of Xxxxx'x (if rated by Xxxxx'x), Standard & Poor's (if
rated by Standard & Poor's) and Fitch (if rated by Fitch) in one of
its generic credit rating categories which signifies investment grade;
or
(iii)an account that will not cause Standard & Poor's, Xxxxx'x or Fitch
to downgrade or withdraw their then-current ratings assigned to the
Certificates, as confirmed in writing by Standard & Poor's, Xxxxx'x
and Fitch.
"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 Bank Insurance Fund (currently administered 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 P-1 by Xxxxx'x (if rated by Xxxxx'x), A-1+ by Standard & Poor's (if
rated by Standard & Poor's) and F-1+ by Fitch (if rated by Fitch), or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by Xxxxx'x, Standard & Poor's (not lower than AA) and Fitch (if rated
by Fitch) in the case of unsecured long-term debt.
"Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed by, the United
States of America, the Federal Home Loan Mortgage Corporation, the
Federal National
27
Mortgage Association, 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 and which are
noncallable;
(ii) both
(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 deposits of
such depository institution or trust company (or, in the case of
a depository institution which is the principal subsidiary of a
holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated at least P-1 by
Xxxxx'x, at least A-1 by Standard & Poor's and at least F-1 by
Fitch (if rated by Fitch), and
(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 the highest credit rating then available from
Xxxxx'x and Fitch (if rated by Fitch) and are rated AAAm or AAAm-G by
Standard & Poor's and whose only investments are in securities
described in clauses (i), (ii) above and (iv) below;
(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 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 of at least
Aa2 from Xxxxx'x, at least AAA by Standard & Poor's and in one of the
two highest rating categories from Fitch (if rated by Fitch) at the
time of such investment; 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;
28
(vi) commercial paper having a rating of at least A-1+ from Standard &
Poor's and at least P-1 from Xxxxx'x (if rated by Xxxxx'x) at the time
of such investment or pledge as a security; and
(vii)other obligations or securities that are acceptable to the Rating
Agencies as an Eligible Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by any 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 such Rating
Agency, as evidenced in writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
Notwithstanding the foregoing, securities that represent the right to
receive payments only of interest due on underlying obligations shall not be
included as Eligible Investments, whether or not such securities otherwise fall
within (i) through (vii) above.
"Eligible Servicer" means the Originator or any Person qualified to act as
Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than an aggregate of $100,000,000 in
outstanding principal amount of manufactured housing conditional sales contracts
and installment loan agreements and, so long as any FHA/VA Contract is
outstanding, which Person is qualified under FHA/VA Regulations to act as a
servicer of all such FHA/VA Contracts.
"Eligible Substitute Contract" means, as to any Replaced Contract for which
such Eligible Substitute Contract is being substituted pursuant to Section
3.06(b), a Contract 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 determined as of the date
of its substitution rather than as of the 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 Section 3.04, 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 Contract,
(iii)has a Contract Rate that is at least equal to the Contract Rate of
such Replaced Contract,
(iv) has a remaining term to scheduled maturity that is not greater than
the remaining term to scheduled maturity of the Replaced Contract, and
(v) is a Land-and-Home Contract if the Replaced Contract is a Land-and-
Home Contract and is otherwise secured by a Manufactured Home that is
similar in type and value to the collateral serving the Replaced
Contract. If more than one Contract is being substituted pursuant to
Section 3.06(b) for more than one
29
Replaced Contract on a particular date, then the conditions specified
above shall be applied to the Contracts being substituted, in the
aggregate, and the Replaced Contracts, in the aggregate.
"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 Contracts comprising
a portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Excess Cashflow" means, for any Remittance Date, the Adjusted Amount
Available less amounts distributed on such Payment Date pursuant to Sections
8.03(a)(i) through 8.03(a)(xi).
"FHA/VA Contract" means a Contract that, at its origination, was insured by
the Federal Housing Administration or partially guaranteed by the Veterans
Administration.
"FHA/VA Regulations" means, as to any FHA/VA Contract, the contractual
agreements and regulations of the Federal Housing Administration or the Veterans
Administration, as the case may be, providing or governing the terms of the
insurance for such Contract by the Federal Housing Administration or the partial
guarantee for such Contract by the Veterans Administration, as the case may be.
"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 Contracts comprising a portion of the corpus of the Trust.
"Final Remittance Date" means the Remittance Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
12.03.
"Fitch" means Fitch, Inc., or any successor thereto; provided that if Fitch
does not then have a rating outstanding on any of the Class A, Class A-IO, Class
M-1, Class M-2 or Class B Certificates, then references herein to "Fitch" 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 Servicer), and references herein to
ratings by or requirements of Fitch shall be deemed to have the equivalent
meanings with respect to ratings by or requirements of such NRSRO.
"Formula Principal Distribution Amount" means, as of any Remittance Date,
the sum of:
(i) all scheduled payments of principal due on each outstanding Contract
during the related Due Period as specified in the amortization
schedule at the time applicable thereto (after adjustments for
previous Partial Principal Prepayments and 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
30
period, or by reason of any other waiver modification or extension
granted by the Servicer in accordance with Section 5.06); plus
(ii) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the related Due Period; plus
(iii)the aggregate Scheduled Principal Balance of all Contracts that
became Liquidated Contracts during the related Due Period plus the
amount of any reduction in principal balance of any Contract during
the related Due Period pursuant to bankruptcy proceedings involving
the related Obligor; plus
(iv) the aggregate Scheduled Principal Balance of all Contracts repurchased
during the related Due Period pursuant to Section 3.06; plus
(v) with respect to the Remittance Date in March 2002, the Unfunded
Contract Shortfall, if any; plus
(vi) without duplication of the foregoing, all collections in respect of
principal on the Contracts received after the last day of the related
Due Period up to and including the third Business Day prior to such
Remittance Date (but in no event later than the 25th day of the month
preceding the Remittance Date); minus
(vii)with respect to all Remittance Dates other than the Remittance Date
in January 2002, the amount, if any, included in the Formula Principal
Distribution Amount for the preceding Remittance Date by virtue of
clause (vi) of the definition of Formula Principal Distribution
Amount; plus
(viii)on the Post Funding Remittance Date, the Pre-Funded Amount.
"Funding Termination Date" means the Business Day immediately preceding the
Remittance Date occurring in the calendar month that is the third calendar month
following the calendar month of the Closing Date, or February 28, 2002.
"Hazard Insurance Policy" means, with respect to each Contract, the policy
of fire and extended coverage insurance (and federal flood insurance, if the
Manufactured Home is secured by an FHA/VA Contract and such Manufactured Home is
located in a federally designated special flood area) required to be maintained
for the related Manufactured Home, as provided in Section 5.09, and which, as
provided in said Section 5.09, may be a blanket mortgage impairment policy
maintained by the Servicer in accordance with the terms and conditions of said
Section 5.09.
"Independent" means, when used with respect to any specified Person, Xxxxxx
& Xxxxxxx LLP or any Person who
(i) is in fact independent of the Originator and the Servicer,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Originator or the Servicer or in an
Affiliate of either, and
31
(iii) is not connected with the Originator or the Servicer as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Whenever it is provided herein that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such opinion or certificate shall
state that the signatory has read this definition and is Independent within the
meaning set forth herein.
"Initial Contracts" means certain Contracts identified in the List of
Contracts delivered pursuant to Section 2.02(i), all of which were originated on
or after August 9, 1983, and which have an aggregate principal balance as of the
Cut-off Date of $474,165,507.21.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract or any FHA/VA Contract.
"Interest Reset Period" means, with respect to any Remittance Date, the
period from and including the prior Remittance Date (or, with respect to the
first Remittance Date, from and including the Closing Date) to but excluding
such Remittance Date.
"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 and with respect to the Class I-
Accrual Interest, one-half the sum of the Pool Scheduled Principal Balance, the
Pre-Funded Amount and the Overcollateralization Amount.
"Intermediate Interest Shortfall" means, with respect to each Class of
Uncertificated Intermediate Interests and any Remittance Date, the amount, if
any, by which the amount distributed on such Class on such Remittance Date
pursuant to Section 8.03(b)(i) is less than the amount specified in Section
8.03(b)(i).
"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-Accrual Interest and the Class I-
AIO Interest.
"Land-and-Home Contract" means a Contract that is secured by a Mortgage on
real estate on which the related Manufactured Home is situated, and which
Manufactured Home is considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.
"Land-and-Home Contract File" means, as to each Land-and-Home Contract,
(i) the original executed copy of the Land-and-Home Contract or a lost
note affidavit in a form acceptable to the Trustee;
(ii) the original related Mortgage with evidence of recording thereon (or,
if the original Mortgage has not yet been returned by the applicable
recording office, a
32
copy thereof, certified by such recording office, which will be
replaced by the original Mortgage when it is so returned) and any
title document for the related Manufactured Home;
(iii)the assignment of the Land-and-Home Contract and the related
Mortgage from the originator (if other than Conseco Finance Corp.) to
the Originator;
(iv) an endorsement of such Land-and-Home Contract by the Seller to the
Trustee or in blank;
(v) an assignment of the related Mortgage to the Trustee or in blank; and
(vi) any extension, modification or waiver agreement(s).
"Land-in-Lieu Contract" means a Contract that is secured by a security
interest in a Manufactured Home and a mortgage or deed of trust on real estate
on which such Manufactured Home is situated, but such Manufactured Home is not
considered or classified as part of the real estate under the laws of the
jurisdiction in which it is located.
"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 Period, for such third consecutive Remittance 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.
33
"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 Xxxxxx Brothers Financial Products Inc. and
its permitted successors under the Yield Maintenance Agreement.
"LIBOR Rate Adjustment Date" means the second LIBOR Business Day prior to
the first day of the related Accrual Period.
"Liquidated Contract" means any defaulted Contract as to which the Servicer
has determined that all amounts which it expects to recover from or on account
of such Contract have been recovered; provided that any defaulted Contract in
respect of which the related Manufactured Home or, in the case of a Land-and-
Home Contract, the related Mortgaged Property, have been realized upon and
disposed of and the proceeds of such disposition have been received shall be
deemed to be a Liquidated Contract.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any defaulted Contract, on or prior to the date on which the
related Manufactured Home or, in the case of a Land-and-Home Contract, the
related Mortgaged Property, are disposed of, including, without limitation,
legal fees and expenses, and any related and unreimbursed expenditures for
property taxes, property preservation or restoration of the property to
marketable condition.
"Liquidation Proceeds" means cash (including Insurance Proceeds) received
in connection with the liquidation of defaulted Contracts, whether through
repossession, foreclosure sale or otherwise, including any rental income
realized from the repossessed Manufactured Home.
"List of Contracts" means the lists identifying each Contract constituting
part of the corpus of the Trust, and which lists are either delivered pursuant
to Section 2.02(i) of this Agreement or attached to a Subsequent Transfer
Instrument as Exhibit A, as such lists may be amended from time to time pursuant
to Section 3.06(b) to add Eligible Substitute Contracts and delete Replaced
Contracts. Each List of Contracts may be delivered in paper or electronic form
and shall set forth as to each Contract identified on it
(i) the Cut-off Date Principal Balance,
(ii) the amount of monthly payments due from the Obligor,
(iii) the Contract Rate and
(iv) the maturity date.
"Loan-to-Value Ratio" means:
(i) with respect to any Contract other than a Land-in-Lieu Contract, one
minus a fraction, the numerator of which is the total amount down
(which may include
34
both cash (plus, in certain cases, fees and insurance premiums
financed, but not buydown points) and, for certain Contracts, the
amount of any equity in land on which a lien has been granted) and the
denominator of which is the sum of the original principal amount and
such amount down, and
(ii) with respect to a Land-in-Lieu Contract, one minus a fraction, the
numerator of which is the appraised value of land and the denominator
of which is the original principal amount.
"Manufactured Home" means a unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.
"Master Certificates" means all of the Certificates other than the Class C
Subsidiary Certificate and the Class C Intermediate Certificate.
"Master REMIC" means the segregated pool of assets consisting of the
Uncertificated Intermediate Interests, as to which a separate REMIC election is
to be made.
"Maturity Date" means, as to any Certificate, other than a Class C
Certificate, and as to any Uncertificated Subsidiary Interest and Uncertificated
Intermediate Interest, the latest possible maturity date for purposes of
complying with the REMIC Provisions governing "regular interests." The Maturity
Dates for such Certificates, Uncertificated Intermediate Interests and
Uncertificated Subsidiary Interests are set forth in Sections 2.05(c) and (d).
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Remittance Date, one-twelfth of
the product of 0.50% and the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date (or, with respect to the first Remittance
Date, the Cut-off Date Pool Principal Balance as of the Closing Date).
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor thereto;
provided that, if Moody's provided a rating on any of the Certificates, as
required by Section 2.02, and does not as of any subsequent date have a rating
outstanding on any of the Class A, Class A-IO, Class M or Class B 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
Servicer), 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.
"Mortgage" means the mortgage, deed of trust, security deed or similar
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.
"Mortgaged Property" means the property subject to the lien of a Mortgage.
"Net Available Amount" means, for any Remittance Date, the Adjusted Amount
Available minus all amounts payable pursuant to Section 8.03(a)(i).
35
"Net Liquidation Loss" means, as to a Liquidated Contract, the amount, if
any, by which the outstanding principal balance of such Liquidated Contract plus
accrued and unpaid interest thereon to the date on which such Liquidated
Contract became a Liquidated Contract exceeds the Net Liquidation Proceeds for
such Liquidated Contract.
"Net Liquidation Proceeds" means, as to a Liquidated Contract, all
Liquidation Proceeds received on or prior to the last day of the month in which
such Contract became a Liquidated Contract, net of Liquidation Expenses.
"Net WAC Cap Rate" means with respect to any Remittance Date, the Weighted
Average Contract Rate, minus the per annum rate at which the Monthly Servicing
Fee is paid and (with respect to each Remittance Date occurring prior to June 1,
2004) minus the Cap Provider Fee (expressed as a percentage of the Pool
Scheduled Principal Balance).
"Notional Principal Amount" means, as to the Class I -AIO Certificates and
the Class A-IO Certificates and each Remittance Date identified below, the
related amount set forth below:
Remittance Date Notional Principal Amount
--------------- -----------------------------------
January, February, March 2002 $ 95,000,000
April, May, June 2002 90,000,000
July, August, September 2002 84,700,000
October, November, December 2002 79,600,000
January, February, March 2003 74,900,000
April, May, June 2003 70,300,000
July, August, September 2003 66,000,000
October, November, December 2003 62,000,000
January, February, March 2004 58,100,000
April, May, June 2004 54,600,000
July, August, September 2004 51,100,000
October, November, December 2004 48,800,000
January, February, March 2005 45,000,000
April, May, June 2005 42,100,000
July, August, September 2005 39,400,000
October, November, December 2005 36,900,000
January, February, March 2006 34,500,000
April, May, June 2006 32,300,000
July, August, September 2006 30,200,000
October, November, December 2006 28,300,000
January, February, March 2007 26,400,000
April, May, June 2007 24,700,000
July, August, September 2007 23,100,000
"NRSRO" means any nationally recognized statistical rating organization.
"Obligor" means each Person who is indebted under a Contract.
"Officer's Certificate" means a certificate signed by the Chairman of the
Board, President or any Vice President of the Originator or the Seller and
delivered to the Trustee.
36
"Opinion of Counsel" means a written opinion of counsel, who may, except as
expressly provided herein, be salaried counsel for the Originator or the Seller,
acceptable to the Trustee and the Originator or the Seller, provided that any
opinion of counsel relating to the qualification of the Subsidiary REMIC, the
Intermediate REMIC or the Master REMIC as a REMIC or compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Original Class A Principal Balance" means the Original Principal Balance
of the Class A Certificates.
"Original Principal Balance" means as to each Class of Master Certificates,
Uncertificated Intermediate Interests and Uncertificated Subsidiary Interests,
the respective amount set forth with respect to such Class in Sections 2.05(b),
2.05(c) and 2.05(d).
"Overcollateralization Amount" means, as of any Remittance Date, the
amount by which the aggregate Class Principal Balance of the Certificates as of
such Remittance Date is less than the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount as of the immediately preceding Remittance
Date.
"Overcollateralization Amount Increase" means, as of any Remittance Date,
the amount by which the Overcollateralization Amount on that Remittance Date
exceeds the Overcollateralization Amount as of the immediately preceding
Remittance Date.
"Partial Principal Prepayment" means
(i) any Principal Prepayment other than a Principal Prepayment in Full and
(ii) any cash amount deposited in the Certificate Account pursuant to the
provision in Section 3.06(a) or pursuant to Section 3.06(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Percentage Interest" means, as to any Certificate, the percentage interest
evidenced thereby in distributions made on the related Class, such percentage
interest being equal to, in the case of the Class A, Class M and Class B
Certificates, the percentage (carried to eight places) obtained from dividing
the denomination of such Certificate by the Original Principal Balance of the
related Class, or, in the case of a Class A-IO Certificate, by the Original
Notional Principal Amount; and in the case of the Class B-3I and Class C
Certificates, the percentage specified on the face of such Certificate. The
aggregate Percentage Interests for each Class of Certificates shall equal 100%,
respectively.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
37
"Pool Factor" means, at any time, the percentage derived from a fraction,
the numerator of which is the aggregate Principal Balance of each Class of
Certificates at such time and the denominator of which is the Cut-off Date Pool
Principal Balance.
"Pool Scheduled Principal Balance" means, as of any Remittance Date, the
aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Due Period.
"Post-Funding Remittance Date" means the first Remittance Date after the
last day of the Pre-Funding Period.
"Pre-Funded Amount" means with respect to any date of determination, the
amount then on deposit in the Pre-Funding Account, after giving effect to any
sale of Subsequent Contracts to the Trust on such date, excluding any investment
earnings.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.07.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of
(i) the date on which the amount on deposit in the Pre-Funding Account is
less than $10,000,
(ii) the Funding Termination Date or
(iii)the date on which an Event of Termination occurs.
"Pre-Funding Subaccount" means the subaccount, if any, so designated,
established and maintained pursuant to Section 8.07.
"Principal Prepayment" means a payment or other recovery of principal on a
Contract (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
Principal Prepayment, upon the next scheduled payment date on such Contract) to
reduce the outstanding principal amount due on such Contract 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 Contract.
"Rating Agencies" means Standard & Poor's, Moody's and Fitch.
"Realized Losses" means, as to any Remittance Date, the aggregate Net
Liquidation Losses of all Contracts that became Liquidated Contracts during the
immediately preceding month.
"Record Date" means the Business Day immediately preceding the related
Remittance Date.
38
"Regular Certificate" means a Class A, Class A-IO, Class M, Class B or
Class B-3I Certificate.
"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.
"Remittance Date" means the first day of each month during the term of this
Agreement, or if such day is not a Business Day, the next succeeding Business
Day, commencing in January 2002.
"Remittance Rate" means with respect to each Class of Certificates, the
rate set forth in Section 2.05(b), and with respect to each Class of
Uncertificated Intermediate Interests, the rate set forth in Section 2.05(c).
"Replaced Contract" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Contract to be repurchased
pursuant to Section 3.06, an amount equal to
(i) the remaining principal amount outstanding on such Contract (or, with
respect to an Unfunded Contract being repurchased pursuant to Section
3.06(c), the Cut-off Date Principal Balance of such Unfunded
Contract), plus
(ii) interest at the Contract Rate on such Contract from the end of the Due
Period with respect to which the Obligor last made a payment through
the end of the immediately preceding Due Period.
"Reserve Fund Addition" means the amount, if any, received from the LIBOR
Cap Counterparty pursuant to the Yield Maintenance Agreement.
"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.
"Scheduled Principal Balance" means, as to any Contract and any Remittance
Date or the applicable Cut-off Date, the principal balance of such Contract as
of the Due Date in the related Due Period or as of the Due Date immediately
preceding the Cut-off Date, as applicable, as the
39
case may be, as specified in the amortization schedule at the time relating
thereto (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) after giving effect to any previous Partial Principal
Prepayments 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.
"Servicer" means the Originator until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Originator, as the same may be amended from time
to time.
"Sixty-Day Delinquency Ratio" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Contracts that were delinquent 60 days or more as of
the end of the related Due Period (including Contracts in respect of which the
related Manufactured Homes have been repossessed but are still in inventory),
and the denominator of which is the Pool Scheduled Principal Balance as of such
Remittance Date.
"Staged-Funding Contract" means an Initial or Additional Contract with
respect to which the Originator has agreed to make multiple disbursements (up to
the related Cut-off Date Principal Balance) with respect to the purchase of the
related Manufactured Home and improvement of the related real estate, but not
all such disbursements have been made as of the Closing Date.
"Staged-Funding Contract Reserve Account" means the account established and
maintained pursuant to Section 3.08.
"Standard & Poor's" means Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor thereto; provided that if
Standard & Poor's does not then have a rating outstanding on any of the Class A,
Class A-IO, Class M, or Class B Certificates, then references herein to
"Standard & Poor's" shall be deemed to refer to the NRSRO then rating any Class
of the Certificates (or, if more than one NRSRO is then rating any Class of the
Certificates, to such NRSRO as may be designated by the Servicer), and
references herein to ratings by or requirements of Standard & Poor's shall be
deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
"Step-up Rate Contract" means any Contract bearing interest during an
initial period or periods at a fixed rate or fixed rates that are lower than the
fixed rate borne thereafter.
"Subsequent Contract" means a Contract sold by the Seller to the Trust
pursuant to Section 2.03, such Contract being identified on Exhibit A attached
to a Subsequent Transfer Instrument.
40
"Subsequent Cut-off Date" means, with respect to a Subsequent Contract,
either the last day of the calendar month in which the related Subsequent
Transfer Date occurs or the last day of the preceding calendar month, as
specified by the Seller in the related Addition Notice.
"Subsequent Transfer Date" means, with respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Contracts 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 Contracts to the
Trust.
"Subsidiary Interest Shortfall" means, with respect to each Class of
Uncertificated Subsidiary Interests and any Remittance Date, the amount, if any,
by which the amount distributed on such Class on such Remittance Date pursuant
to Section 8.03(b)(i) is less than the amount specified in Section 8.03(b)(i).
"Subsidiary Interest Adjusted Principal Balance" means, as to any
Remittance 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, by which the aggregate Subsidiary Interest Principal Balance
of the Class S-1 and Class S-2 Interests exceeds the Pool Scheduled Principal
Balance, such excess to be allocated sequentially; i.e., first to the Class S-1
Interest up to its Subsidiary Interest Principal Balance, then to the Class S-
2(1) Interest any remaining excess, up to its Subsidiary Interest Principal
Balance, and last to the S-2(23) Interest.
"Subsidiary Interest Principal Balance" means, as to any Remittance Date
and each Class of Uncertificated Subsidiary Interests, the Original Principal
Balance of such Class less all amounts previously distributed under Section
8.03(c) in respect of such Class on account of principal.
"Subsidiary REMIC" means the segregated pool of assets (except the Yield
Maintenance Agreement, Basis Risk Reserve Fund and Yield Maintenance Reserve
Fund) described as follows, as to which a separate REMIC election is to be made:
(i) all the rights, benefits, and obligations arising from and in
connection with each Contract and any related Collateral Security,
(ii) all rights under any Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the owner of
such Contract and proceeds from the Errors and Omissions Protection
Policy and any blanket hazard policy to the extent such proceeds
relate to any Manufactured Home,
(iii)all rights under any FHA/VA Regulation pertaining to any FHA/VA
Contract,
(iv) all remittances, deposits and payments made into the Certificate
Account and amounts in the Certificate Account (other than payments on
the Uncertificated Subsidiary Interests),
(v) all proceeds in any way derived from any of the foregoing items, and
41
(vi) all documents contained in the Contract Files or the Land-and-Home
Contract Files.
"Transfer Agreement" means that certain Transfer Agreement between Conseco
Finance Securitizations Corp., as Purchaser, and Conseco Finance Corp., as
Seller, dated as of even date herewith.
"Trust" means the trust created by this Agreement, known as Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2001-4, the
corpus of which consists of
(i) all the rights, benefits, and obligations arising from and in
connection with each Contract and any related Collateral Security,
(ii) all rights under any Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the owner of
such Contract and proceeds from the Errors and Omissions Protection
Policy and any blanket hazard policy to the extent such proceeds
relate to any Manufactured Home,
(iii)all rights under any FHA/VA Regulation pertaining to any FHA/VA
Contract,
(iv) all rights of the Seller under the Transfer Agreement,
(v) all remittances, deposits and payments made into the Certificate
Account and amounts in the Certificate Account,
(vi) all proceeds in any way derived from any of the foregoing items,
(vii)all documents contained in the Contract Files or the Land-and-Home
Contract Files,
(viii)all rights under the Yield Maintenance Agreement,
(ix) the obligations and related demand note of the Originator delivered
pursuant to Section 3.06(c) and the related Staged-Funding Contract
Reserve Account, if any, and
(x) amounts in the Pre-Funding Account, the Basis Risk Reserve Fund and
the Yield Maintenance Reserve Fund.
"Uncertificated Intermediate Interests" means the Class I-A, Class I-AIO,
Class I-M1, Class I-M2, Class I-B1, Class I-B2 and Class I-Accrual Interests,
collectively.
"Uncertificated Subsidiary Interests" means the Class S-1 and Class S-2
Interests, collectively.
"Undelivered Contract" means as of any date of determination an Initial or
Additional Contract identified, on the exception report attached to the
Acknowledgement delivered by the
42
Trustee under Section 2.04, as a Land-and-Home Contract as to which the Trustee
did not receive the related Land-and-Home Contract File as of the Closing Date
and has not received the related Land-and-Home Contract File and remitted
payment to the Seller pursuant to Section 8.07(c).
"Undelivered Contract Subaccount" means the subaccount so designated and
established and maintained pursuant to Section 8.07.
"Underwriters" means Xxxxxx Brothers, Inc., Credit Suisse First Boston
Corporation, Deutsche Banc Alex. Xxxxx and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.
"Underwriting Agreement" means the Underwriting Agreement dated December
13, 2001 and related Terms Agreement dated as of December 13, 2001, each among
the Originator, the Seller and the Underwriters.
"Unfunded Contract" has the meaning specified in Section 3.06(c).
"Unfunded Contract Shortfall" has the meaning specified in Section 3.06(c).
"Unpaid Class A Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class A Interest Shortfall for the prior Remittance Date,
plus accrued interest (to the extent payment thereof is legally permissible) at
the Class A Remittance Rate on the amount thereof from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class A Principal Shortfall" means, as to the Class A Certificates
and any Remittance Date, the amount, if any, by which the aggregate of the Class
A Principal Shortfalls for prior Remittance Dates is in excess of the amounts
distributed on prior Remittance Dates to Holders of Class A Certificates
pursuant to Section 8.03(a)(vii)(B).
"Unpaid Class A-IO Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class A-IO Interest Shortfall for the prior
Remittance Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class A-IO Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-1 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class B-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class B-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
43
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of
(i) the amount, if any, of the remainder of:
(A) the Class B-1 Liquidation Loss Interest Amount, if any, for the
immediately prior Remittance Date, plus
(B) the Unpaid Class B-1 Liquidation Loss Interest Shortfall
determined as of such immediately prior Remittance Date, minus
(C) all amounts distributed to the Holders of the Class B-1
Certificates on account of any Unpaid Class B-1 Liquidation Loss
Interest Shortfall pursuant to Section 8.03(a)(x)(D) on such
immediately prior Remittance Date, plus
(ii) accrued interest (to the extent payment thereof is legally
permissible) at the Class B-1 Remittance Rate on the amount specified
in clause (i) from such prior Remittance Date to such current
Remittance Date (calculated in the manner specified in Section 1.03).
"Unpaid Class B-1 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class B-1 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class B-1 Certificates pursuant to Section
8.03(a)(x)(A).
"Unpaid Class B-2 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class B-2 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class B-2 Certificates pursuant to Section
8.03(a)(xi)(C).
"Unpaid Class B-3I Shortfall" means, as to any Remittance Date, the amount,
if any, by which the aggregate of the Class B-3I Shortfalls for prior Remittance
Dates is in excess of the amounts distributed on prior Remittance Dates to
Holders of Class B-3I Certificates pursuant to Section 8.03(a)(xv) in respect of
any Unpaid Class B-3I Shortfall.
"Unpaid Class M-1 Basis Risk Carryover Shortfall" means, with respect to
the Class M-1 Certificates and as to any Payment Date, the excess of
(a) the aggregate amount of all Class M-1 Basis Risk Carryover Shortfalls
over
(b) the sum of all payments in reduction of Class M-1 Basis Risk Carryover
Shortfalls on all previous Payment Dates pursuant to Sections 8.08 and
8.09,
plus interest (to the extent payment thereof is legally permissible) accrued
during the related Accrual Period at the Class M-1 Interest Rate for such
Payment Date (calculated without giving effect to the Adjusted Net WAC Cap Rate)
on the Unpaid Class M-1 Basis Risk Carryover
44
Shortfall for the immediately preceding Remittance Date (after giving effect to
any payment made in reduction thereof on such preceding Payment Date pursuant to
Sections 8.08 and 8.09).
"Unpaid Class M-1 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class M-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class M-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of
(i) the amount, if any, of the remainder of:
(A) the Class M-1 Liquidation Loss Interest Amount, if any, for the
immediately prior Remittance Date, plus
(B) the Unpaid Class M-1 Liquidation Loss Interest Shortfall
determined as of such immediately prior Remittance Date, minus
(C) all amounts distributed to the Holders of the Class M-1
Certificates on account of any Unpaid Class M-1 Liquidation Loss
Interest Shortfall pursuant to Section 8.03(a)(viii)(D) on such
immediately prior Remittance Date, plus
(ii) accrued interest (to the extent payment thereof is legally
permissible) at the Class M-1 Remittance Rate on the amount specified
in clause (i) from such prior Remittance Date to such current
Remittance Date (calculated in the manner specified in Section 1.03).
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of
(i) the amount, if any, of the remainder of
(A) the Class M-2 Liquidation Loss Interest Amount, if any, for the
immediately prior Remittance Date, plus
(B) the Unpaid Class M-2 Liquidation Loss Interest Shortfall
determined as of such immediately prior Remittance Date, minus
45
(C) all amounts distributed to the Holders of the Class M-2
Certificates on account of any Unpaid Class M-2 Liquidation Loss
Interest Shortfall pursuant to Section 8.03(a)(ix)(D) on such
immediately prior Remittance Date, plus
(ii) accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount specified
in clause (i) from such prior Remittance Date to such current
Remittance Date (calculated in the manner specified in Section 1.03).
"Unpaid Class M-1 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class M-1 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class M-1 Certificates pursuant to Section
8.03(a)(viii)(A).
"Unpaid Class M-2 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class M-2 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class M-2 Certificates pursuant to Section
8.03(a)(ix)(A).
"Unpaid Intermediate Interest Shortfall" means, as to any Remittance Date
and any Class of Uncertificated Intermediary Interests other than the Class I-
AIO Interest, the amount, if any, of the Intermediary Interest Shortfall for the
prior Remittance Date with respect to such Class, plus accrued interest (to the
extent payment thereof is legally permissible) at 1/12th of the Adjusted Net WAC
Cap Rate (or 2.50% in the case of the Class I-AIO Interest) on the amount
thereof from such prior Remittance Date to such current Remittance Date.
"Unpaid Subsidiary Interest Shortfall" means, as to any Remittance Date and
any Class of Uncertificated Subsidiary Interests, the amount, if any, of the
Subsidiary Interest Shortfall for the prior Remittance Date with respect to such
Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Net WAC Cap Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date.
"Weighted Average Contract Rate" means, as to any Remittance Date, the
weighted average (determined by Scheduled Principal Balance) of the Contract
Rates of all Contracts that were outstanding during the prior related Due
Period.
"Yield Maintenance Agreement" means the Yield Maintenance Agreement, also
referred to as the "Cap Agreement," effective as of December 18, 2001, between
the Trust and the LIBOR Cap Counterparty, relating to the Class M-1
Certificates.
"Yield Maintenance Reserve Fund" means the separate trust account created
and maintained pursuant to Section 8.08 in the name of the Trust in an Eligible
Institution.
SECTION 1.03 Calculations. All calculations of the amount of interest
accrued on the Certificates with respect to any Remittance Date shall be
calculated on the basis of a 360-day year of twelve 30-day months, except with
respect to the Class M-1 Certificates. Interest on the
46
Class M-1 Certificates will be calculated on the basis of a 360-day year and the
actual number of days elapsed in the related Accrual Period.
ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
SECTION 2.01 Closing.
(a) There is hereby created, by the Seller as settlor, a separate trust
which shall be known as Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-4. By the execution and delivery of this
Agreement, the Seller has agreed that it will elect or will cause an election to
be made to treat the pool of assets comprising each of the Subsidiary REMIC,
Intermediate REMIC and Master REMIC, excluding the Staged-Funding Contract
Reserve Account, the obligation and related demand note of the Originator
pursuant to Section 3.06(c) and the Pre-Funding Account, as a REMIC. The Trust
shall be administered pursuant to the provisions of this Agreement for the
benefit of the Certificateholders.
(b) The Seller hereby transfers, assigns, delivers, sells, sets over and
otherwise conveys to the Trustee on behalf of the Trust, by execution of an
assignment substantially in the form of Exhibit D hereto,
(i) all the right, title and interest of the Seller in and to the Initial
and Additional Contracts, including, without limitation, all right,
title and interest in and to the Collateral Security, all rights to
receive payments on or with respect to the Initial and Additional
Contracts (other than the principal and interest due on the Contracts
on or before the applicable Cut-off Date) and all rights of the Seller
under the Transfer Agreement,
(ii) all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing an Initial or Additional Contract for the
benefit of the owner of such Contract,
(iii)all rights under all FHA/VA Regulations pertaining to any Initial or
Additional Contract that is an FHA/VA Contract,
(iv) all rights of the Seller under the Transfer Agreement,
(v) the proceeds from the Errors and Omissions Protection Policy and all
rights under any blanket hazard insurance policy to the extent they
relate to the Manufactured Homes,
(vi) all documents contained in the Contract Files and the Land-and-Home
Contract Files,
(vii)$3,330,868.54 paid by the Underwriters of the Certificates to the
Trustee by order of the Seller out of the proceeds of the sale of the
Certificates (which such
47
Underwriters shall, by order of the Trust, remit directly to the
Staged-Funding Contract Reserve Account),
(viii)amounts on deposit in the Pre-Funding Account, the Basis Risk
Reserve Fund and the Yield Maintenance Reserve Fund,
(ix) all rights under the Yield Maintenance Agreement, and
(x) all proceeds and products in any way derived from any of the
foregoing.
The Seller agrees that it will use its best efforts (consistent with
prudent lending practices) to cause each Staged-Funding Contract to be fully
disbursed on or before the Funding Termination Date. The additional payment
obligations of any Obligor attributable to any further disbursements on any
Staged-Funding Contract made on or before the Funding Termination Date shall
automatically become the property of the Trust, without further action by the
Seller or the Trust. The payment to the Seller by the Trust and the transfer of
additional obligations to the Trust pursuant to this Section 2.01(c) and Section
3.06(c)(2) shall be a purchase by the Trust of qualified mortgages pursuant to a
fixed price contract within the meaning of Section 860G(a)(3) of the Code.
Although the parties intend that the conveyance of the Seller's right,
title and interest in and to the Contracts and the Collateral Security pursuant
to this Agreement and each Subsequent Transfer Instrument shall constitute a
purchase and sale and not a pledge of security for loans from the
Certificateholders, it is the intent of this Agreement that if such conveyances
are deemed to be a pledge of security for loans from the Certificateholders or
any other Persons including the Certificate Insurer (the "Secured Obligations"),
the parties intend that the rights and obligations of the parties to the Secured
Obligations shall be established pursuant to the terms of this Agreement. The
parties also intend and agree that the Seller shall be deemed to have granted to
the Trustee, and the Seller does hereby grant to the Trustee, a perfected first-
priority security interest in the items designated in Section 2.01(b)(i) through
2.01(b)(x) above and in each Subsequent Transfer Instrument, and all proceeds
thereof, to secure the Secured Obligations, 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 Certificates or the Secured Obligations, 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 to the Trustee each of the
documents listed below:
(i) the List of Contracts identifying all Initial and Additional
Contracts, certified by the Chairman of the Board, President or any
Vice President of the Seller;
(ii) a certificate of an officer of each of the Originator and Seller
substantially in the form of Exhibit E hereto;
(iii) an Opinion of Counsel for each of the Originator and Seller
substantially in the form of Exhibit F hereto;
48
(iv) the Trustee's acknowledgment in the form of Exhibit G hereto;
(v) a letter acceptable to the Underwriters from PricewaterhouseCoopers
LLP or another nationally recognized accounting firm, stating that
such firm has reviewed the Initial Contracts on a statistical
sampling basis and setting forth the results of such review;
(vi) copies of resolutions of the board of directors of the Seller or of
the executive committee of the board of directors of the Seller
approving the execution, delivery and performance of this Agreement,
the creation of the Trust and the transactions contemplated
hereunder, certified in each case by the secretary or an assistant
secretary of the Seller;
(vii) officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota;
(viii)evidence of filing (A) with the Secretary of State of Delaware of a
UCC-1 financing statement, executed by the Originator as debtor,
naming the Seller as secured party and listing the Contracts as
collateral, and (B) with the Secretary of State of Minnesota of a
UCC-1 financing statement, executed by the Seller as debtor, naming
the Trustee as secured party and listing the Contracts as collateral;
(ix) the Land-and-Home Contract File or Contract File, as applicable, for
each Initial and Additional Contract;
(x) an executed copy of the Assignment of the Seller substantially in the
form of Exhibit D hereto with respect to the Contracts;
(xi) an Officer's Certificate listing the Servicer's Servicing Officers;
(xii) evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy;
(xiii)evidence of deposit in the Certificate Account of all funds
received with respect to the Initial and Additional Contracts after
the Cut-off Date to the Closing Date, other than amounts due on or
before the Cut-off Date, together with an Officer's Certificate to
the effect that such amount is correct;
(xiv) an Officer's Certificate confirming that the Originator's internal
audit department has reviewed the original or a copy of each Initial
and Additional Contract and each related Contract File or Land-and-
Home Contract File, as applicable, that each Initial and Additional
Contract and related Contract File or Land-and-Home Contract File, as
applicable, conforms in all material respects with the List of
Contracts and that each such Contract File or Land-and-Home Contract
File, as applicable, is complete in all material respects and that
each Manufactured Home securing a Contract is covered by a Hazard
Insurance Policy as required by Section 3.02(f);
49
(xv) a letter from Xxxxx'x confirming that it has assigned the Class A
Certificates a rating of "Aaa," the Class M-1 Certificates a rating
of "Aa2," the Class M-2 Certificates a rating of "A2," and the Class
B-1 Certificates a rating of "Baa2;"
(xvi) a letter from Fitch confirming that it has assigned the Class A
Certificates a rating of "AAA," the Class M-1 Certificates a rating
of "AA," the Class M-2 Certificates a rating of "A," and the Class B-
1 Certificates a rating of "BBB;"
(xvii)a letter from Standard & Poor's confirming that it has assigned the
Class A Certificates a rating of "AAA," the Class M-1 Certificates a
rating of "AA," the Class M-2 Certificates a rating of "A," and the
Class B-1 Certificates a rating of "BBB;"
(xviii)the demand note described in Section 3.06(c)(5);
(xix) an executed copy of the Transfer Agreement;
(xx) evidence of the deposit of $3,330,868.54 in the Staged-Funding
Contract Reserve Account;
(xxi) evidence of the deposit of $229.11 in the Pre-Funding Account;
(xxii)evidence of the deposit in the Undelivered Contract Subaccount of
an amount equal to the difference between the aggregate Cut-off Date
Principal Balances of the Initial and Additional Contracts and the
aggregate Cut-off Date Principal Balances of the Undelivered
Contracts;
(xxiii)evidence of the deposit of $5,000 in the Basis Risk Reserve Fund;
and
(xxiv)any other documents or certificates that the Trustee may reasonably
request.
SECTION 2.03 Conveyance of the Subsequent Contracts.
(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 Contracts identified on the List of
Contracts attached to the Subsequent Transfer Instrument, including all rights
to receive payments on or with respect to the Subsequent Contracts due after the
applicable Cut-off Date, and all items with respect to such Subsequent Contracts
in the related Contract Files and Land-and-Home Contract Files. The transfer to
the Trustee by the Seller of the Subsequent Contracts shall be absolute and is
intended by the Seller, the Trustee and the Certificateholders to constitute and
to be treated as a sale of the Subsequent Contracts by the Seller to the Trust.
The purchase price paid by the Trustee shall be one hundred percent (100%)
of the aggregate Cut-off Date Principal Balances of such Subsequent Contracts.
The purchase price of
50
Subsequent Contracts 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 the Subsequent Contracts to the Trustee, and
the Trustee shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(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 Contracts;
(ii) the Seller shall have delivered the related Land-and-Home Contract
File for each Subsequent Land-and-Home Contract to the Custodian 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 Contracts identifying the related
Subsequent Contracts;
(iv) as of each Subsequent Transfer Date, 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, as certified in an Officer's
Certificate substantially in the form attached hereto as Exhibit P;
(v) such sale and transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC, Intermediate
REMIC and the Subsidiary REMIC) or the Certificateholders;
(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,
confirming the satisfaction of each condition precedent and the
representations specified in this Section 2.03 and in Sections 3.01
and 3.03;
(viii)the Seller and the Originator shall have delivered to the Trustee
Opinions of Counsel addressed to the Rating Agencies and the Trustee
with respect to the transfer of the Subsequent Contracts 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) the Seller shall have delivered to the Trustee a copy of the executed
Subsequent Transfer Agreement between the Originator and the Seller,
substantially in the form of Exhibit A to the Transfer Agreement and
dated as of the Subsequent Transfer Date.
51
(c) Before the last day of the Pre-Funding Period, the Seller shall deliver
to the Trustee each of the items listed below.
(1) A letter from PricewaterhouseCoopers LLP or another nationally
recognized accounting firm retained by the Seller (with copies
provided to the Rating Agencies, the Underwriters and the Trustee)
that is in form, substance and methodology the same as that delivered
under Section 2.02(v) of this Agreement, except that it shall address
the Subsequent Contracts and their conformity in all material respects
to the characteristics described in Section 3.04(c) of this Agreement.
(2) Evidence that as a result of the purchase by the Trust of the
Subsequent Contracts, the Class A, Class M and Class B-1 Certificates
shall not receive from any of the Rating Agencies a lower credit
rating than the rating assigned to such Certificates as of the Closing
Date.
(3) Evidence that the aggregate amount on deposit in the Pre-Funding
Account and the Staged-Funding Contract Reserve Account as of the
Closing Date, minus the aggregate Cut-off Date Principal Balance of
any Subsequent Contracts that had been specifically identified as
Subsequent Contracts as of the Closing Date (and purchased by the
Trust on or before the first Remittance Date), did not exceed 25% of
the aggregate Original Principal Balance of the Master Certificates.
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 acknowledging conveyance of the Contracts,
identified on the applicable List of Contracts and the related Contract Files
and Land-and-Home Contract Files to the Trustee and declaring that the Trustee,
directly or through a custodian, will hold all Contracts that have been
delivered in trust, upon the terms herein set forth, for the use and benefit of
all Certificateholders and on the Closing Date the Trustee shall issue to or
upon the order of the Seller Certificates representing ownership of a beneficial
interest in 100% of the Trust.
(b) If, in its review of the Land-and-Home Contract Files and the Contract
Files as described in Exhibits H-1 and H-2, the Trustee or its Custodian
discovers a breach of the representations or warranties set forth in Sections
2.02(xiv), 3.02, 3.03, 3.04 or 3.05, the Seller and the Originator shall cure
such breach or repurchase or replace such Contract pursuant to Section 3.06.
SECTION 2.05 REMIC Provisions.
(a) The Originator, as Servicer, and the Class C Subsidiary
Certificateholder, Class C Intermediate Certificateholder and the Class C Master
Certificateholder, by acceptance thereof, each agrees that, in accordance with
the requirements of Section 860D(b)(1) of the Code, the federal tax return of
each of the Subsidiary REMIC, Intermediate REMIC and Master REMIC
52
for its first taxable year shall provide that the Subsidiary REMIC, Intermediate
REMIC or Master REMIC, as the case may be (excluding the obligation and related
demand note of the Originator pursuant to Section 3.06(c), the Staged-Funding
Contract Reserve Account, the Pre-Funding Account, the Yield Maintenance Reserve
Fund and the Basis Risk Reserve Fund) elects to be treated as a REMIC for such
taxable year and all subsequent taxable years. In furtherance of the foregoing,
the Trustee (at the direction of the Originator, the Seller or the Servicer) and
the Originator, the Seller and the Servicer shall take, or refrain from taking,
all such action as is necessary to maintain the status of each of the Subsidiary
REMIC, Intermediate REMIC or Master REMIC as a REMIC under the 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.
(b) The Regular Certificates are being issued in ten classes and are hereby
designated by the Originator as constituting 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
Pass-Though Rate (or Notional Assumed Final
Class Per Annum Principal Amount) Maturity Date(1)
--------------------- ---------------------------- ---------------------- -------------------------
Class A-1 3.22% $ 105,000,000 September 2033
Class A-2 5.15% $ 90,000,000 September 2033
Class A-3 6.09% $ 38,000,000 September 2033
Class A-4 the lesser of 7.36% per $ 143,437,000 September 2033
year or the Adjusted Net
WAC Cap Rate
Class A-IO (2) $ (95,000,000) September 2033
Class M-1(3) a floating rate equal to $ 32,063,000 September 2033
the least of one month
LIBOR plus 1.75% per
year, the Adjusted Net
WAC Cap Rate, and 15.00%
per year
Class M-2 the lesser of 8.59% per $ 23,037,000 September 2033
year or the Adjusted Net
WAC Cap Rate
Class B-1 the lesser of 9.40% per $ 23,275,000 September 2033
year or the Adjusted Net
WAC Cap Rate
Class B-2 the lesser of 9.40% per $ 20,188,000 September 2033
year or the Adjusted Net
WAC Cap Rate
Class B-3I (4) $(475,000,000) September 2033
53
_______________
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Remittance Date in the month 14 months following the month of the maturity
date for the Contract 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) The Class A-IO Certificates will receive on each Remittance Date the
distribution on such Remittance Date to the Class I-AIO Interest under
Section 8.03(b)(i)(B), which is equivalent to interest accrued at the Class
A-IO Pass-Through Rate on the Class A-IO Notional Amount. Thus, the Class
A-IO Certificates shall effectively accrue interest on an initial Notional
Amount and at a rate as described in the Prospectus Supplement. For federal
tax purposes and pursuant to Treas. Reg. 1.860G-1(a)(2)(v), the Class A-IO
Certificates will be collectively entitled to 100% of the interest payable
on the Class I-AIO Interest.
(3) In addition to representing a regular interest in the Master REMIC, the
Class M-1 Certificate also represents the right to receive funds from the
Yield Maintenance Reserve Fund and the Basis Risk Reserve Fund pursuant to
Sections 8.08 and 8.09.
(4) The Class B-3I Certificates are interest-only Certificates entitled to the
payment of the Class B-3I Distribution Amount. Nonetheless, solely for
federal income tax purposes, the Class B-3I Certificate shall be entitled to
the payment of the Class B-3I Formula Distribution Amount.
The Seller does not represent that any Class of Regular Certificates 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. The Class C Master Certificate is being issued in a single Class and 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.
(c) The Uncertificated Intermediate Interests are being issued in thirty-
two 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:
Pass-Through Original Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
--------------------- ----------------------------- -------------------------- --------------------------
Class I-A1 Adjusted Net WAC Cap Rate $ 52,500,000 September 2033
Class I-A2 Adjusted Net WAC Cap Rate $ 45,000,000 September 2033
Class I-A3 Adjusted Net WAC Cap Rate $ 19,000,000 September 2033
Class I-A4 Adjusted Net WAC Cap Rate $ 71,718,500 September 2033
Class I-AIO(1) (2) (2) September 2033
Class I-AIO(2) (2) (2) September 2033
Class I-AIO(3) (2) (2) September 2033
54
Pass-Through Original Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
--------------------- ----------------------------- -------------------------- --------------------------
Class I-AIO(4) (2) (2) September 2033
Class I-AIO(5) (2) (2) September 2033
Class I-AIO(6) (2) (2) September 2033
Class I-AIO(7) (2) (2) September 2033
Class I-AIO(8) (2) (2) September 2033
Class I-AIO(9) (2) (2) September 2033
Class I-AIO(10) (2) (2) September 2033
Class I-AIO(11) (2) (2) September 2033
Class I-AIO(12) (2) (2) September 2033
Class I-AIO(13) (2) (2) September 2033
Class I-AIO(14) (2) (2) September 2033
Class I-AIO(15) (2) (2) September 2033
Class I-AIO(16) (2) (2) September 2033
Class I-AIO(17) (2) (2) September 2033
Class I-AIO(18) (2) (2) September 2033
Class I-AIO(19) (2) (2) September 2033
Class I-AIO(20) (2) (2) September 2033
Class I-AIO(21) (2) (2) September 2033
Class I-AIO(22) (2) (2) September 2033
Class I-AIO(23) (2) (2) September 2033
Class I-M1 Adjusted Net WAC Cap Rate $ 16,031,500 September 2033
Class I-M2 Adjusted Net WAC Cap Rate $ 11,518,500 September 2033
Class I-B1 Adjusted Net WAC Cap Rate $ 11,637,500 September 2033
Class I-B2 Adjusted Net WAC Cap Rate $ 10,094,000 September 2033
55
Pass-Through Original Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
--------------------- ----------------------------- -------------------------- --------------------------
Class I-Accrual Adjusted Net WAC Cap Rate $237,500,000 September 2033
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Remittance Date in the month 14 months following the month of the maturity
date for the Contract 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.
(2) Each Class I-AIO Interest comprising the Class I-AIO Interest is entitled to
that specified portion of the interest paid on a Class S-2 Interest as
designated in Section 8.03(c)(i)(B). Therefore, solely for federal income
tax purposes, the corresponding Pass-Through Rate and initial Notional
Amount of each Class I-AIO Interest as of the Closing Date is that
designated in Section 8.03(b)(i)(B) and applicable at such time.
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. The Class C Intermediate Certificate is being
issued in a single Class and 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 are being issued in twenty-four
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 are
irrevocably established as of the Closing Date:
Pass-Through Original
Class Rate Per Annum Principal Balance Maturity Date
---------------- -------------------------- ------------------------ ----------------------
Class S-1 Net WAC Cap Rate $380,000,000 September 2033
Class S-2(1) Net WAC Cap Rate $ 5,000,000 September 2033
Class S-2(2) Net WAC Cap Rate $ 5,300,000 September 2033
Class S-2(3) Net WAC Cap Rate $ 5,100,000 September 2033
Class S-2(4) Net WAC Cap Rate $ 4,700,000 September 2033
Class S-2(5) Net WAC Cap Rate $ 4,600,000 September 2033
Class S-2(6) Net WAC Cap Rate $ 4,300,000 September 2033
Class S-2(7) Net WAC Cap Rate $ 4,000,000 September 2033
Class S-2(8) Net WAC Cap Rate $ 3,900,000 September 2033
Class S-2(9) Net WAC Cap Rate $ 3,500,000 September 2033
Class S-2(10) Net WAC Cap Rate $ 3,500,000 September 2033
56
Pass-Through Original
Class Rate Per Annum Principal Balance Maturity Date
---------------- -------------------------- ------------------------ ----------------------
Class S-2(11) Net WAC Cap Rate $ 3,100,000 September 2033
Class S-2(12) Net WAC Cap Rate $ 3,000,000 September 2033
Class S-2(13) Net WAC Cap Rate $ 2,900,000 September 2033
Class S-2(14) Net WAC Cap Rate $ 2,700,000 September 2033
Class S-2(15) Net WAC Cap Rate $ 2,500,000 September 2033
Class S-2(16) Net WAC Cap Rate $ 2,400,000 September 2033
Class S-2(17) Net WAC Cap Rate $ 2,200,000 September 2033
Class S-2(18) Net WAC Cap Rate $ 2,100,000 September 2033
Class S-2(19) Net WAC Cap Rate $ 1,900,000 September 2033
Class S-2(20) Net WAC Cap Rate $ 1,900,000 September 2033
Class S-2(21) Net WAC Cap Rate $ 1,700,000 September 2033
Class S-2(22) Net WAC Cap Rate $ 1,600,000 September 2033
Class S-2(23) Net WAC Cap Rate $ 23,100,000 September 2033
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Remittance Date in the month 14 months following the month of the maturity
date for the Contract 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 will, in fact, mature on any given date, except that each regular
interest of the Subsidiary REMIC will absolutely mature by the Assumed Final
Maturity Date as indicated above. The Class C Subsidiary Certificate is being
issued in a single Class and 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) 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.
(f) 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,
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(ii) dispose of any portion of the Subsidiary REMIC, the Intermediate REMIC
or the Master REMIC, other than as provided in Sections 3.06, 3.07 and
8.05,
(iii)engage in any "prohibited transaction," as defined in Sections
860F(a)(2) and (5) of the Code, except as may be contemplated by
Section 3.06(c),
(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 status
of the Uncertificated Subsidiary Interests as "regular interests"
in the Subsidiary REMIC, the status of the Class C Subsidiary
Certificate 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 C Intermediate Certificate as the sole class
of "residual interests" in the Intermediate REMIC, the status of
the Regular Certificates as "regular interests" in the Master
REMIC, or the status of the Class C Master Certificate 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.
(g) 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 Contract, 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, Intermediate REMIC or 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, Intermediate
REMIC or Master REMIC, as defined in Section 860F of the Code, or cause the
Subsidiary REMIC, Intermediate REMIC or Master REMIC to fail to qualify as a
REMIC at any time that the Uncertificated Subsidiary Interests, Class C
Subsidiary Certificate, Uncertificated Intermediate Interests, Class C
Intermediate Certificate, Regular Certificates or Class C Master
58
Certificate 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, Intermediate REMIC or Master REMIC of any "income from
nonpermitted assets," within the meaning of Section 860F(a)(2)(B) of the Code.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Seller and Originator makes the following representations and
warranties on which the Trustee will rely in accepting the Contracts in trust
and issuing the Certificates on behalf of the Trust. The repurchase or
substitution obligation of the Originator set forth in Section 3.06 constitutes
the sole remedy available to the Trust or the Certificateholders for a breach of
a representation or warranty of the Originator set forth in Section 2.02(xiv),
3.02, 3.03, 3.04 or 3.05 of this Agreement.
SECTION 3.01 Representations and Warranties Regarding the Seller. The
Seller represents and warrants to the Trustee and the Certificateholders,
effective on the Closing Date and each Subsequent Transfer Date, that each of
the statements set forth below is true.
(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.
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(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 Articles of Incorporation
or Bylaws of the Seller, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Seller or Originator is a
party or by which the Seller may be bound.
(e) Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its properties
or with respect to this Agreement or the Certificates which, if adversely
determined, would in the opinion of the Seller have a material adverse effect on
the transactions contemplated by this Agreement.
(f) Licensing. The Seller is duly registered as a finance company in each
state in which Contracts were originated, to the extent such registration is
required by applicable law.
SECTION 3.02 Representations and Warranties Regarding Each Contract. The
Originator has made the representations and warranties set forth in this Section
3.02 to the Seller in the Transfer Agreement, which representations and
warranties the Seller has assigned to the Trustee for the benefit of the
Certificateholders, as of the Closing Date with respect to each Initial and
Additional Contract, and as of the applicable Subsequent Transfer Date with
respect to each Subsequent Contract identified on the List of Contracts attached
to the related Subsequent Transfer Agreement.
(a) List of Contracts. The information set forth in the applicable List of
Contracts is true and correct as of its date.
(b) Payments. As of the Cut-off Date, the most recent scheduled payment
was made by or on behalf of the Obligor (without any advance from the Originator
or any Person acting at the request of the Originator) or was not past due for
more than 59 days (in the case of an Initial or Additional Contract) or 30 days
(in the case of a Subsequent Contract).
(c) No Waivers. The terms of the Contract have not been waived, altered or
modified in any respect, except by instruments or documents identified in the
Contract File or Land-and-Home Contract File, as applicable.
(d) Binding Obligation. The Contract is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally.
(e) No Defenses. The Contract is not subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
(f) Insurance Coverage. The Manufactured Home securing the Contract is
covered by a Hazard Insurance Policy in the amount required by Section 5.09.
Each Manufactured Home
60
secured by an FHA/VA Contract which was, at the time of origination of the
related Contract, located within a federally designated special flood hazard
area is covered by insurance coverage at least equal to that required by Section
5.09 or such lesser coverage as may be available under the federal flood
insurance program. With respect to any other Contract that is not an FHA/VA
Contract, the Originator has obtained:
(i) a statement from the Obligor's insurance agent that the Manufactured
Home was, at the time of origination of the Contract, not in a
federally designated special flood hazard area; or
(ii) evidence that, at the time of origination, flood insurance was in
effect, which coverage is at least equal to that required by Section
5.09 or such lesser coverage as may be available under the federal
flood insurance program.
All premiums due as of the Closing Date on such insurance have been paid in
full.
(g) Origination. The Contract was originated by a manufactured housing
dealer and purchased by the Originator, or originated by the Originator
directly, in the regular course of its business.
(h) Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract pursuant to this Agreement or pursuant to transfers of
Certificates, or the ownership of the Contract by the Trust, unlawful or render
the Contract unenforceable. The Seller has received all consents and approvals
necessary under the terms of the Contract to or of the transfer of the Contract
to the Trust.
(i) Compliance with Law. At the date of origination of the Contract, all
requirements of any federal and state laws, rules and regulations applicable to
the Contract, including, without limitation, usury, truth in lending and equal
credit opportunity 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 inspection, and shall deliver to the Trustee upon demand, evidence
of compliance with all such requirements. Such compliance is not affected by
the Trust's ownership of the Contract.
(j) Contract in Force. The Contract has not been satisfied or subordinated
in whole or in part or rescinded, and the Manufactured Home securing the
Contract has not been released from the lien of the Contract in whole or in
part.
(k) Valid Security Interest. Each Contract (other than the Land-and-Home
Contracts) creates a valid and enforceable perfected first priority security
interest in favor of the Originator in the Manufactured Home covered thereby as
security for payment of the Cut-off Date Principal Balance of such Contract.
The Originator has assigned all of its right, title and interest in such
Contract, including the security interest in the Manufactured Home covered
thereby, to the Seller, and the Seller has assigned all of its right, title and
interest in such Contract, including the security interest in the Manufactured
Home covered thereby, to the Trustee. The Trustee has and will have under this
Agreement a valid and continuing security interest (as defined in the
61
Minnesota UCC) in such Contract and Manufactured Home, which security interest
is prior to all other liens, and is enforceable against creditors of and
purchasers from the Originator and the Seller.
Each Mortgage is a valid first lien in favor of the Seller on real property
securing the amount owed by the Obligor under the related Land-and-Home Contract
subject only to
(i) the lien of current real property taxes and assessments,
(ii) covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally in the area wherein the
property subject to the Mortgage is located or specifically reflected
in the appraisal obtained in connection with the origination of the
related Land-and-Home Contract obtained by the Seller and
(iii)other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to
be provided by such Mortgage.
Each Land-and-Home Contract is covered by an American Land Title Association, or
equivalent form, lender's title insurance policy. The Seller has assigned all
of its right, title and interest in such Land-and-Home Contract and related
Mortgage, including the security interest in the Manufactured Home covered
thereby, to the Trustee. The Trustee has and will have under this Agreement a
valid and continuing security interest (as defined in the Minnesota UCC) in such
Land-and-Home Contract, which security interest is prior to all other liens, and
is enforceable against creditors of and purchasers from the Originator and the
Seller.
The Contract constitutes an instrument, tangible chattel paper, and account
or a payment intangible within the meaning of the Minnesota UCC.
(l) Capacity of Parties. The signature(s) of the Obligor(s) on the
Contract are genuine and all parties to the Contract had full legal capacity to
execute the Contract.
(m) Good Title. In the case of a Contract purchased from a manufactured
housing dealer, the Originator purchased the Contract for fair value and took
possession thereof in the ordinary course of its business, without knowledge
that the Contract was subject to a security interest. Except for any pledge
terminated contemporaneously with or prior to the transfer of the Contract to
the Seller, the Originator has not sold, assigned, pledged, granted a security
interest in, or otherwise conveyed the Contract to any Person. The Originator
has not authorized the filing of and is not aware of any financing statements
against the Originator that include a description of collateral covering the
Contract other than a financing statement relating to the security interest
granted to the Seller under the Transfer Agreement. The Originator is not aware
of any judgment or tax lien filings against the Originator. At the time of the
transfer of the Contract by the Originator to the Seller under the terms of the
Transfer Agreement, the Originator had good and marketable title thereto free
and clear of any encumbrance, equity, loan, pledge, charge, claim or security
interest and was the sole owner thereof with full right to
62
transfer the Contract to the Seller. With respect to any Contract bearing a
stamp indicating that such Contract has been sold to another party, such other
party's interest in such Contract has been released.
(n) No Defaults. As of the applicable Cut-off Date, there was no default,
breach, violation or event permitting acceleration existing under the Contract
and no event which, with notice and the expiration of any grace or cure period,
would constitute such a default, breach, violation or event permitting
acceleration under such Contract (except payment delinquencies permitted by
clause (b) above). The Originator has not waived any such default, breach,
violation or event permitting acceleration except payment delinquencies
permitted by clause (b) above. As of the Closing Date or the Subsequent
Transfer Date, as applicable, the related Manufactured Home is, to the best of
the Originator's knowledge, free of damage and in good repair. To the best of
the Originator's knowledge, no Manufactured Home has suffered damage that is not
covered by a Hazard Insurance Policy, including, but not limited to, hurricanes,
earthquakes, floods, tornadoes, hailstorms, straight-line winds, sinkholes,
mudslides, volcanic eruptions, meteorites and other natural disasters.
(o) No Liens. As of the Closing Date or the Subsequent Transfer Date, as
applicable, there are, to the best of the Originator's knowledge, no liens or
claims which have been filed for work, labor or materials affecting the
Manufactured Home or any related Mortgaged Property securing the Contract which
are or may be liens prior to, or equal or coordinate with, the lien of the
Contract.
(p) Equal Installments. Except for 22 Step-up Rate Contracts included
among the Initial Contracts and no Step-up Rate Contracts included among the
Additional Contracts, each Contract has a fixed Contract Rate and provides for
level monthly payments which fully amortize the loan over its term. Of the
Step-up Rate Contracts which are still bearing interest at their initial
Contract Rates, 20 provide for two rate increases and the remaining two provide
for a single rate increase.
(q) Enforceability. The Contract contains customary and enforceable
provisions so as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security provided thereby.
(r) One Original. There is only one original executed Contract (other than
the original executed copy retained by the Obligor), which Contract has been
delivered to the Trustee or its custodian on or before the Closing Date or the
Subsequent Transfer Date, as applicable. The Custodian has acknowledged that it
holds the Contract solely as the Trustee's agent.
(s) Loan-to-Value Ratio. At the time of their origination all of the
Contracts had Loan-to-Value Ratios not greater than 100%.
(t) [RESERVED]
63
(u) Not Real Estate. With respect to each Contract other than a Land-and-
Home Contract, the related Manufactured Home is not considered or classified as
part of the real estate on which it is located under the laws of the
jurisdiction in which it is located.
(v) Notation of Security Interest. With respect to each Contract other
than a Land-and-Home Contract, if the related Manufactured Home is located in a
state in which notation of a security interest on the title document is required
or permitted to perfect such security interest, the title document shows, or if
a new or replacement title document with respect to such Manufactured Home is
being applied for such title document will be issued within 180 days and will
show, the Originator or its assignee as the holder of a first priority security
interest in such Manufactured Home; if the related Manufactured Home is located
in a state in which the filing of a financing statement under the UCC is
required to perfect a security interest in manufactured housing, such filings or
recordings have been duly made and show the Originator or its assignee as
secured party. If the related Manufactured Home secures a Land-and-Home
Contract, such Manufactured Home is subject to a Mortgage properly filed in the
appropriate public recording office or such Mortgage will be properly filed in
the appropriate public recording office within 180 days, naming the Seller as
mortgagee. In either case, the Trustee has the same rights as the secured party
of record would have (if such secured party were still the owner of the
Contract) against all Persons (including the Seller and the Originator and any
trustee in bankruptcy of the Seller or the Originator) claiming an interest in
such Manufactured Home.
(w) Secondary Mortgage Market Enhancement Act. The related Manufactured
Home is a "manufactured home" within the meaning of 00 Xxxxxx Xxxxxx Code,
Section 5402(6). Each manufactured housing dealer from whom the Originator
purchased such Contract, if any, was then approved by the Originator in
accordance with the requirements of the Secretary of Housing and Urban
Development set forth in 24 CFR (S) 201.27. At the origination of each
Contract, the Originator was approved for insurance by the Secretary of Housing
and Urban Development pursuant to Section 2 of the National Housing Act.
(x) Qualified Mortgage. The Contract represents a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code. The Originator represents
and warrants that, either as of the date of origination or the Closing Date, the
fair market value of the property securing each Contract was not less than 80%
of the "adjusted issue price" (within the meaning of the REMIC Provisions) of
such Contract. Each Manufactured Home is a "single-family residence" which has
a minimum of 400 square feet of living space and a minimum width in excess of
102 inches and which is of a kind which is customarily used at a fixed location,
pursuant to the requirements of Section 25(e)(10) of the Code.
(y) Credit Life. No Obligor obtained a prepaid single-premium credit life
policy in connection with the origination of the Contract.
(z) Section 32. No Contract 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."
SECTION 3.03 Additional Representations and Warranties. The Seller hereby
represents and warrants (a) and (b) below to the Trustee for the benefit of the
Certificateholders, as of the
64
Closing Date with respect to each Initial and Additional Contract and as of each
Subsequent Transfer Date with respect to each Subsequent Contract identified on
the List of Contracts attached to the related Subsequent Transfer Instrument.
(a) Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract under this Agreement or pursuant to transfers of the Certificates
unlawful or render the Contract unenforceable. The Seller has duly executed a
valid blanket assignment of the Contracts transferred to the Trust, and has
transferred all its right, title and interest in such Contracts. 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 Contract and has the
authority to sell, transfer and assign such Contract to the Trust under the
terms of this Agreement. The Seller has not sold, assigned, pledged, granted a
security interest in, or otherwise conveyed the Contract to any Person. Seller
has not authorized the filing of and is not aware of any financing statements
against the Seller that include a description of collateral covering the
Contract other than a financing statement relating to the security interest
granted to the Trust hereunder. The Seller is not aware of any judgment or tax
lien filings against the Seller. At the time of the transfer of the Contract by
the Seller to the Trust under the terms of this Agreement, the Seller had good
and marketable title thereto free and clear of any encumbrance, equity, loan,
pledge, charge, claim or security interest and was the sole owner thereof with
full right to transfer the Contract to the Trust.
SECTION 3.04 Representations and Warranties Regarding the Contracts in the
Aggregate. The Originator has made the representations and warranties set forth
below this Section 3.04 to the Seller in the Transfer Agreement, which
representations and warranties the Seller has assigned to the Trustee for the
benefit of the Certificateholders, as of the Closing Date with respect to the
Initial and Additional Contracts, and as of each Subsequent Transfer Date with
respect to the related Subsequent Contracts.
(a) Amounts. The aggregate principal amounts payable by Obligors under the
Contracts (assuming all Staged-Funding Contracts were fully disbursed) as of the
Cut-off Date equal the Cut-off Date Pool Principal Balance. The aggregate
principal amounts payable by Obligors under the Initial Contracts (assuming all
Staged-Funding Contracts included among the Initial Contracts were fully
disbursed) as of the Cut-off Date equal $474,165,507.21. The aggregate
principal amounts payable by Obligors under the Initial and Additional Contracts
(assuming all Staged-Funding Contracts included among the Additional Contracts
were fully disbursed) as of the Cut-off Date equal approximately $475,000,000.
(b) Characteristics of Initial and Additional Contracts. The Initial and
Additional Contracts have the following characteristics as of the Cut-off Date:
(i) of the Initial Contracts, the Obligors on not more than 10% (by Cut-
off Date Principal Balance) are located in any one state except for
Texas; of the Initial and Additional Contracts, the Obligors on not
more than 13.45% are located in any
65
one state, the Obligors on not more than 0.24% are located in an area
with the same zip code and the Obligors on not more than 0.18% are
located in California in an area with the same zip code;
(ii) no Initial or Additional Contract has a remaining maturity of fewer
than 2 months or more than 360 months;
(iii)the final scheduled payment date on the Initial or Additional
Contract with the latest maturity is in July 25, 2032;
(iv) of the Initial Contracts, approximately 74.51% (by Cut-off Date
Principal Balance) is attributable to loans to purchase new
Manufactured Homes and approximately 25.49% to used Manufactured
Homes; of the Initial and Additional Contracts, approximately 74.51%
is attributable to loans to purchase new Manufactured Homes and
approximately 25.49% to used Manufactured Homes;
(v) no less than 32.93% of the Initial and Additional Contracts (by Cut-
off Date Principal Balance) is attributable to Land-and-Home
Contracts;
(vi) the Weighted Average Contract Rate of the Initial and Additional
Contracts as of the Cut-off Date is at least 11.940% per annum;
(vii)at least 73.74% of the Initial and Additional Contracts (by Cut-off
Date Principal Balance) is attributable to loans for the purchase of
multi-Section Manufactured Homes;
(viii)the weighted average (by Cut-off Date Principal Balance) loan to
value ratio of the Initial and Additional Contracts is not more than
87.24%;
(ix) no Initial Contract was originated before August 9, 1983 and no
Additional Contract was originated before June 19, 2001; and
(x) not more than 26.24% of the Initial and Additional Contracts (by Cut-
off Date Principal Balance) are secured by Manufactured Homes located
in a mobile home park.
(c) Characteristics of All Contracts. The Contracts have the following
characteristics as of the end of the Pre-Funding Period:
(i) the Weighted Average Contract Rate is not less than 11.90%, and not
more than 6.82% of the Cut-off Date Pool Principal Balance is
attributable to Contracts with a Contract Rate of less than 8.00%;
(ii) the weighted average (by Cut-off Date Pool Principal Balance) Loan-to-
Value Ratio of the Contracts is not more than 88%;
(iii)not less than 71% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of new Manufactured Homes;
66
(iv) not more than 29% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of single-Section Manufactured
Homes, and not less than 71% of the Cut-off Date Pool Principal
Balance is attributable to loans for the purchase of double-Section
Manufactured Homes;
(v) not less than 28% of the Cut-off Date Pool Principal Balance is
attributable to Land-and-Home Contracts;
(vi) not more than 29% of the Cut-off Date Pool Principal Balance is
attributable to loans secured by Manufactured Homes located in parks;
(vii)the final scheduled payment date on the Contract with the latest
maturity is not later than July 25, 2032;
(viii)not more than 13% of the Cut-off Date Pool Principal Balance is
attributable to loans with a Conseco Finance credit score of between
F0 and F4;
(ix) not more than 18.50% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of Manufactured Homes that had
been repossessed;
(x) not more than 1% of the Cut-off Date Pool Principal Balance as of the
end of the Pre-Funding Period is attributable to Initial or Additional
Contracts that were 60 or more days delinquent as of the Closing Date;
and
(xi) not more than 13% of the Cut-off Date Pool Principal Balance is
attributable to loans with a low side override.
(d) Staged-Funding Contracts. Approximately $54,471,416.63 of the Initial
and Additional Contracts, by Cut-off Date Principal Balance, are Staged-Funding
Contracts that had not been fully disbursed by the Cut-off Date. Approximately
$51,140,548.09 of such amount has been disbursed by the Closing Date, and
approximately $3,330,868.54 remains to be disbursed on or before the Funding
Termination Date.
(e) 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
Contracts that are described in the List of Contracts.
(f) Marking Records. By the Closing Date or Subsequent Transfer Date, as
applicable, the Originator has caused the portions of the Electronic Ledger
relating to the Contracts to be clearly and unambiguously marked to indicate
that such Contracts constitute part of the Trust and are owned by the Trust in
accordance with the terms of the trust created hereunder.
(g) No Adverse Selection. Except for the effect of the representations and
warranties made in Sections 3.02 and 3.03 hereof, no adverse selection
procedures have been employed in selecting the Contracts.
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SECTION 3.05 Representations and Warranties Regarding the Contract Files
and Land-and-Home Contract Files. The Originator has made the representations
and warranties set forth below in this Section 3.05 to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders, as of the Closing Date
with respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts.
(a) Possession. Immediately prior to the Closing Date or the Subsequent
Transfer Date, as applicable, the Originator will have possession of each
original Contract and the related Contract File or Land-and-Home Contract File,
except for the missing notes described in Section 3.03(r) as to which the
Originator has delivered to the Trustee or its Custodian a copy of the notes and
note lost affidavits. There are and there will be no custodial agreements in
effect materially and adversely affecting the rights of the Originator to make,
or cause to be made, any delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts and the Contract Files and Land-and-Home Contract Files by the
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 Repurchase of Contracts or Substitution of Contracts for Breach of
Representations and Warranties.
(a) The Originator shall repurchase a Contract, at its Repurchase Price,
not later than the first Determination Date that is 90 or more 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 of
the Originator set forth in Sections 2.02(xiv), 3.02, 3.03 or 3.05 of this
Agreement that materially adversely affects the Trust's or the
Certificateholders' interest in such Contract and which breach has not been
cured; 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 Contract incorrectly described on the List of
Contracts with respect to unpaid principal balance, which the
Originator would otherwise be required to repurchase pursuant to this
Section, the Originator may, in lieu of repurchasing such Contract,
deliver to the Seller for deposit in the Certificate Account no later
than the first Determination Date that is 90 or more 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 on the immediately following
Remittance Date as a collection of principal or interest on such
Contract, 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.
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Notwithstanding the foregoing, the Originator shall repurchase any Land-and-Home
Contract, at such Contract's Repurchase Price, or substitute for it an Eligible
Substitute Contract as described in Section 3.06(b), if the Seller has failed to
deliver the related Land-and-Home Contract File to the Trustee within 30 days of
the Closing Date.
(b) On or prior to the date that is the second anniversary of the Closing
Date, the Originator, at its election, may substitute one or more Eligible
Substitute Contracts for any Contracts that it is obligated to repurchase
pursuant to Section 3.06(a) (such Contracts being referred to as the "Replaced
Contracts") upon satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the Contracts to be
substituted for the Replaced Contracts and the Contract Files related
to such Contracts and the Originator shall have marked the Electronic
Ledger indicating that such Contracts constitute part of the Trust;
(ii) the Contracts to be substituted for the Replaced Contracts are
Eligible Substitute Contracts and the Originator delivers an Officers'
Certificate, substantially in the form of Exhibit K-2 hereto, to the
Trustee certifying that such Contracts are Eligible Substitute
Contracts;
(iii)the Originator shall have delivered to the Seller evidence of filing
of a UCC-1 financing statement executed by the Originator as debtor,
naming the Seller as secured party and 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 Delaware listing such Contracts as collateral, or shall
have delivered to the Seller or the Trustee, as the case may be, an
amended List of Contracts;
(iv) in respect of Eligible Substitute Contracts that are Land-and-Home
Contracts:
(A) the Originator shall have delivered to the Seller, or its
Custodian, the related Land-and-Home Contract Files; and
(B) the Originator shall have delivered to the Trustee an opinion of
counsel satisfactory to the Trustee to the effect that the
Trustee holds a perfected first priority lien in the real estate
securing such Eligible Substitute Contracts, or evidence of
recordation of the assignment to the Trustee on behalf of the
Trust of each Mortgage securing such Eligible Contracts;
(v) the Originator shall have delivered to the Trustee an Opinion of
Counsel
(A) to the effect that the substitution of such Contracts for such
Replaced Contracts will not cause the Master REMIC, Intermediate
REMIC 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
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(vi) if the aggregate Scheduled Principal Balance of such Replaced
Contracts is greater than the aggregate Scheduled Principal Balance of
the Contracts being substituted, the Originator shall have delivered
to the Seller for deposit in the Certificate 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 Contracts
to, and delete such Replaced Contracts from, the List of Contracts. Such
substitution shall be effected prior to the first Determination Date that occurs
90 or more 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 substitution of a Contract, the Originator
shall give written notice of such substitution to the Rating Agencies.
(c) The terms and conditions in this subsection (c) apply in addition to
subsections (a) and (b) above.
(1) On or before the Funding Termination Date, the Originator or the
Seller shall deliver one or more Officer's Certificates to the
Trustee, identifying those Staged-Funding Contracts that have been
fully disbursed in accordance with the terms of such Contract on or
before the Funding Termination Date and specifying that portion of the
funds held in the Staged-Funding Contract Reserve Account attributable
to those Staged-Funding Contracts. On or before the Funding
Termination Date, the Originator or the Seller shall deliver an
Officer's Certificate to the Trustee, specifying any Staged-Funding
Contracts which were not fully disbursed by the Funding Termination
Date (each Staged-Funding Contract that was not so fully disbursed
being hereinafter referred to as an "Unfunded Contract"), and the Cut-
off Date Principal Balance of each Unfunded Contract.
(2) On or before the Funding Termination Date, the Originator shall either
repurchase any Unfunded Contract in accordance with Section 3.06(a)
(or the unfunded portion thereof, by depositing in the Certificate
Account any undisbursed amount with respect to such Unfunded
Contract), or shall substitute an Eligible Substitute Contract for
such Unfunded Contract in accordance with Section 3.06(b). With
respect to the repurchase of an Unfunded Contract pursuant to this
Section 3.06(c), an amount of the Repurchase Price equal to the
Unfunded Contract Shortfall attributable to such Unfunded Contract
shall be treated as a refund to the Trust of the purchase price paid
by the Trust for additional obligations of the Obligor on such
Contract under Section 2.01(c), and the remainder of the Repurchase
Price shall be treated as paid to the Trust for such Unfunded
Contract.
(3) If the Originator shall have failed to repurchase an Unfunded Contract
(or the unfunded portion thereof, by depositing in the Certificate
Account any undisbursed amount with respect to such Unfunded Contract)
or to substitute an Eligible Substitute Contract therefor in
accordance with subsection (2) above,
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then the disbursed principal balance of such Unfunded Contract as
owned by the Trust shall not be increased after the Funding
Termination Date, notwithstanding any further disbursements that may
be made to the related Obligor by the Originator after the Funding
Termination Date. The Servicer shall thereafter allocate principal and
interest collected on the Contract between the Trust and the
Originator on a pro rata basis in accordance with the disbursed
principal balance as of the Funding Termination Date, with the result
that payments of interest and principal collected with respect to such
disbursed principal balance as of the Funding Termination Date shall
be deemed collected by the Trust. The aggregate differential between
the Cut-off Date Principal Balance of all such Unfunded Contracts as
specified in the List of Contracts and the disbursed principal balance
of such Unfunded Contracts as of the Funding Termination Date (the
"Unfunded Contract Shortfall") shall be added to the Formula Principal
Distribution Amount with respect to the Remittance Date in March 2002.
(4) On the Business Day prior to each Remittance Date until and including
the Remittance Date immediately following the Funding Termination
Date, the Originator shall pay any Class A Interest Shortfall, Class
M-1 Interest Shortfall, Class M-2 Interest Shortfall or Class B-1
Interest Shortfall occurring on such Remittance Date, if and to the
extent such shortfall is caused by the difference between (i) the
interest that would have been payable on all Staged-Funding Contracts
in the related month had such Contracts been fully disbursed on the
Closing Date and (ii) the interest actually payable on such Contracts
in the related month according to the terms of such Contracts.
(5) To further evidence its obligation to repurchase Unfunded Contracts
pursuant to subsection (2) above and to deposit any Class A Interest
Shortfall, Class M-1 Interest Shortfall, Class M-2 Interest Shortfall
and Class B-1 Interest Shortfall pursuant to subsection (4) above, the
Originator shall deliver to the Trustee, on the Closing Date, a demand
note in an amount no less than the aggregate Cut-off Date Principal
Balances of the Staged-Funding Contracts. After the Funding
Termination Date or such earlier date on which the Originator either
has fully disbursed or repurchased each Staged-Funding Contract as
required herein, the Trustee shall return such demand note to the
Originator for cancellation and/or destruction.
(d) Upon receipt by the Trust by deposit in the Certificate Account of the
Repurchase Price under subsection (a) or (c) above, or the delivery of an
Eligible Substitute Contract pursuant to subsection (b) or (c) above, and upon
receipt of a certificate of a Servicing Officer in the form attached hereto as
Exhibit K-1 or K-2, the Trustee shall convey and assign to the Originator all of
the Trust's right, title and interest in the repurchased Contract or Replaced
Contract without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of the Trustee.
(e) The Originator shall defend and indemnify the Trustee and the
Certificateholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out of
any claims which may be asserted against or incurred by any
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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 or Substitution Under Certain Circumstances.
Notwithstanding any provision of this Agreement to the contrary, no
repurchase or substitution pursuant to Section 3.06 (other than a repurchase or
substitution pursuant to Section 3.06(c)) shall be made unless the Originator
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 Subsidiary REMIC, Intermediate REMIC or Master REMIC to fail
to qualify as a REMIC while any regular interest in the Subsidiary
REMIC, Intermediate REMIC or Master REMIC, respectively, 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.
The Servicer shall attempt to obtain such Opinion of Counsel. In the case of a
repurchase or deposit pursuant to Section 3.06(a) or 3.06(c), 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 Contract 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 hereof 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)(1) of the Code or
imposed on "contributions after start up date" under Section 860G(d) of the Code
from amounts otherwise distributable to Class C Subsidiary Certificateholders.
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 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 Staged-Funding Contract Reserve Account.
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(a) The Trustee shall establish the Staged-Funding Contract Reserve Account
on behalf of the Trust, which must be an Eligible Account, and shall deposit
therein the amount specified in Section 2.02(xx). The Account shall be entitled
"U.S. Bank National Association, as Trustee for the benefit of holders of
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 2001-4."
(b) Upon receipt by the Trustee of an Officer's Certificate pursuant to
Section 3.06(c)(1) to the effect that one or more Staged-Funding Contracts have
been fully disbursed in accordance with the terms of such Contract, on or before
the Funding Termination Date, the Trustee shall release to the Originator that
portion of the funds held in the Staged-Funding Contract Reserve Account
attributable to those Staged-Funding Contracts (as specified in such Officer's
Certificate).
(c) If the Originator fails to satisfy its obligations under Section
3.06(c)(2) hereof the Trustee shall withdraw from the Staged-Funding Contract
Reserve Account that amount necessary to satisfy the Originator's obligations
under Section 3.06(c)(2), and if the funds withdrawn from the Staged-Funding
Contract Reserve Account are insufficient to satisfy such obligations, the
Trustee shall demand payment under the demand note delivered pursuant to Section
3.06(c)(5) in the amount of such deficiency, and shall apply said funds in the
fashion provided in the second sentence in Section 3.06(c)(2). Any amount so
applied shall be deposited in the Certificate Account and treated for all
purposes under this Agreement as an amount paid by the Originator to repurchase
Contracts under Section 3.06(c).
(d) The Staged-Funding Contract Reserve Account shall be part of the Trust
but not part of the Subsidiary REMIC, Intermediate REMIC or Master REMIC. The
Trustee on behalf of the Trust shall be the legal owner of the Staged-Funding
Contract Reserve Account. The Originator shall be the beneficial owner of the
Staged-Funding Contract Reserve Account, subject to the foregoing power of the
Trustee to apply amounts in the Staged-Funding Contract Reserve Account to
satisfy the obligations of the Originator under Section 3.06(c)(2). Funds in
the Staged-Funding Contract Reserve Account shall, at the direction of the
Originator, be invested in Eligible Investments that mature no later than the
Funding Termination Date. All net income and gain from such investments shall
be distributed to the Originator on the Funding Termination Date. Any losses on
such investments shall be deposited in the Staged-Funding Contract Reserve
Account by the Originator out of its own funds immediately as realized. All
amounts earned on amounts on deposit in the Staged-Funding Contract Reserve
Account shall be taxable to the Originator.
(e) Any funds remaining in the Staged-Funding Contract Reserve Account
after the Funding Termination Date shall be distributed to the Originator.
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01 Custody of Contract Files and Land-and-Home Contract Files.
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(a) Subject to the terms and conditions of this Section the Trustee
appoints the Custodian to maintain custody of the Contract Files and the Land-
and-Home Contract Files for the benefit of the Certificateholders and the
Trustee. In the event that the Trustee is no longer acting as Custodian of the
Contract Files or the Land-and-Home Contract Files, upon execution and delivery
of an agreement between the Trustee and the Person assuming the duties of the
Trustee hereunder as Custodian with respect to such Files, the replacement
Custodian shall concurrently execute an acknowledgment of receipt of such Files
substantially in the form of Exhibit H hereto.
(b) The Custodian shall agree to maintain the Contract Files and Land-and-
Home Contract Files at its office where they are currently maintained, or at
such other offices of the Custodian in the State of Minnesota as shall from time
to time be identified to the Trustee by written notice. The Custodian may
temporarily move individual Contract Files and Land-and-Home Contract Files or
any portion thereof without notice as necessary to conduct collection and other
servicing activities in accordance with its customary practices and procedures.
(c) The Custodian shall have and perform the following powers and duties:
(i) hold the Contract Files and Land-and-Home Contract Files on behalf of
the Certificateholders and the Trustee, maintain accurate records
pertaining to each Contract to enable it to comply with the terms and
conditions of this Agreement, maintain a current inventory thereof,
conduct annual physical inspections of Contract Files and Land-and-
Home Contract Files held by it under this Agreement and certify to the
Trustee annually that it continues to maintain possession of such
Contract Files and Land-and-Home Contract Files;
(ii) implement policies and procedures, in writing and signed by an
Authorized Officer, with respect to persons authorized to have access
to the Contract Files and Land-and-Home Contract Files on the
Custodian's premises and the receipting for Contract Files and Land-
and-Home Contract Files taken from their storage area by an employee
of the Custodian for purposes of servicing or any other purposes; and
(iii)attend to all details in connection with maintaining custody of the
Contract Files and Land-and-Home Contract Files on behalf of the
Certificateholders and the Trustee.
(d) In performing its duties under this Section, the Custodian agrees to
act with reasonable care, using that degree of skill and care that it exercises
with respect to similar contracts owned and/or serviced by it. The Custodian
shall promptly report to the Trustee any failure by it to hold the Contract
Files or Land-and-Home Contract Files as herein provided and shall promptly take
appropriate action to remedy any such failure. In acting as custodian of the
Contract Files and Land-and-Home Contract Files, the Custodian shall agree
further not to assert any beneficial ownership interests in the Contracts or the
Contract Files or Land-and-Home Contract Files. The Custodian shall agree to
indemnify the Certificateholders and the Trustee for any and all liabilities,
obligations, losses, damages, payments, costs or expenses of any kind whatsoever
which may be imposed on, incurred or asserted against the Certificateholders and
the
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Trustee as the result of any act or omission by the Custodian relating to the
maintenance and custody of the Contract Files or Land-and-Home Contract Files;
provided, however, that the Custodian will not be liable for any portion of any
such amount resulting from the negligence or willful misconduct of any
Certificateholder, the Trustee or the Servicer.
SECTION 4.02 Filings. On or prior to the Closing Date, the Originator shall
cause the UCC-1 financing statements referred to in Section 2.02(viii) to be
filed. Such financing statements are sufficient when filed to perfect the
security interest in the Contracts granted to the Trustee under this Agreement.
The Trustee shall cause to be filed all necessary continuation statements of the
UCC-1 financing statements. From time to time the Servicer shall take and cause
to be taken such actions and execute such documents as are necessary to perfect
and protect the Trustee's first priority security interest in the Contracts and
their proceeds and the Manufactured Homes against all other persons, including,
without limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title. The
Servicer will maintain the Trustee's first priority perfected security interest
in each Manufactured Home and a first lien on each Mortgaged Property so long as
the related Contract is property of the Trust. The Seller and the Originator
authorize the Trustee and the Servicer to file all financing statements
necessary or desirable to perfect the Trustee's security interest in the
Contracts and the proceeds thereof.
All UCC-1 financing statements filed or to be filed against the Seller or
Originator in favor of the Trust in connection with this Agreement describing
the Contracts shall 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."
SECTION 4.03 Name Change or Relocation.
(a) During the term of this Agreement, the Originator shall not change its
name, identity, structure or jurisdiction of incorporation or relocate its chief
executive office without first giving notice thereof to the Seller, the Trustee,
the Servicer and the Certificate Insurer. In addition, following any such
change in the name, identity, structure or location of the chief executive
office of the Originator, the Originator shall give written notice of any such
change to Standard & Poor's, Xxxxx'x and Fitch.
(b) If any change in the Originator's name, identity, structure or
jurisdiction of incorporation or the relocation of its chief executive office
would make any financing or continuation statement or notice of lien filed under
this Agreement seriously misleading within the meaning of applicable provisions
of the UCC or any title statute or would cause any such financing or
continuation statement or notice of lien to become unperfected (whether
immediately or with lapse of time), the Originator, no later than five days
after the effective date of such change, shall file, or cause to be filed, such
amendments or financing statements as may be required to preserve, perfect and
protect the Certificateholders' interest in the Contracts and proceeds thereof
and in the Manufactured Homes.
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SECTION 4.04 Chief Executive Office. During the term of this Agreement, the
Originator will maintain its chief executive office in one of the States of the
United States, except Tennessee.
SECTION 4.05 Costs and Expenses. The Servicer agrees to pay all reasonable
costs and disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Certificateholders' right,
title and interest in and to the Contracts (including, without limitation, the
security interests in the Manufactured Homes granted thereby).
ARTICLE V
SERVICING OF CONTRACTS
SECTION 5.01 Responsibility for Contract Administration. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Contracts and perform or cause to be performed all contractual and customary
undertakings of the holder of the Contracts to the Obligor. 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 Contracts 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 contracts
serviced by the Servicer; provided, however, that
(i) such degree of skill and care shall be at least as favorable as the
degree of skill and care generally applied by servicers of
manufactured housing installment sales contracts for institutional
investors and
(ii) notwithstanding the foregoing, the Servicer shall not release or waive
the right to collect the unpaid balance on any Contract.
The Servicer shall comply with FHA/VA Regulations in servicing any FHA/VA
Contracts (and will pay any required premiums) so that the related insurance of
the Federal Housing Administration or partial guarantee of the Veterans
Administration remains in full force and effect, except for good faith disputes
relating to FHA/VA Regulations that will not cause the termination or reduction
of such insurance or guarantee.
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 Contract.
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SECTION 5.04 Inspection; Computer Tape.
(a) At all times during the term hereof, the Servicer shall afford the
Trustee, the Certificate Insurer and their authorized agents reasonable access
during normal business hours to the Servicer's records, which have not
previously been provided to the Trust, relating to the Contracts and will cause
its personnel to assist in any examination of such records by the Trustee or its
authorized agents. 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 Contract 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 Contract in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep available
a copy of the List of Contracts at its principal executive office for inspection
by Certificateholders.
(c) On or before the ninth Business Day of each related Due Period, the
Servicer will provide to the Trustee a Computer Tape setting forth a list of all
the outstanding Contracts and the outstanding principal balance of each such
Contract as of the end of the next related Due Period.
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 must be an Eligible Account.
The Certificate Account shall be entitled "U.S. Bank National Association as
Trustee for the benefit of holders of Manufactured Housing Contract Pass-Through
Certificates, Series 2001-4 (Conseco Finance Corp., Servicer)." The Servicer
shall pay into the Certificate Account as promptly as practicable (not later
than the next Business Day) following receipt thereof all payments from Obligors
and Net Liquidation Proceeds, other than late payment penalty fees, extension
fees and assumption fees, which shall be retained by the Servicer as additional
compensation for servicing the Contracts. All amounts paid into the Certificate
Account under this Agreement shall be held in trust for the Trustee and the
Certificateholders 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 Remittance Date. 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 Remittance Date pursuant to Section
8.03(a). An amount equal to any net loss on such investments shall be deposited
in the Certificate Account by the Class C Subsidiary Certificateholder 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.
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The Trustee may trade with itself or an Affiliate in the purchase or sale
of such Eligible Investments.
The Originator, the Servicer and the Seller acknowledge that to the extent
regulations of the Comptroller of the Currency or other applicable regulatory
agency grant the Originator, Seller or Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Originator, the Seller
and the Servicer specifically waive receipt of such confirmations.
(c) If at any time the Trustee receives notice (from Standard & Poor's,
Xxxxx'x, Fitch or the Servicer or otherwise) that the Certificate Account has
ceased to be an Eligible Account, the Trustee must, as soon as practicable but
in no event later than 5 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 must notify
each of the Rating Agencies and the Servicer of the location of the Certificate
Account.
SECTION 5.06 Enforcement.
(a) The Servicer shall, consistent with customary servicing procedures and
the terms of this Agreement, act with respect to the Contracts in such manner as
will maximize the receipt of principal and interest on such Contracts and
Liquidation Proceeds with respect to Liquidated Contracts.
The Servicer shall exercise its discretion, consistent with customary
servicing procedures and the terms of this Agreement, with respect to the
enforcement of defaulted Contracts in such manner as will maximize the receipt
of principal and interest with respect thereto, including but not limited to the
sale of such Contract to a third party, the modification of such Contract, or
foreclosure upon the related Collateral Security and disposition thereof.
(b) The Servicer may xxx to enforce or collect upon Contracts, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement shall
be deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Trustee on behalf of the Trust shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Contract,
including bringing suit in its name or the names of the Certificateholders.
(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Trustee's behalf to reassign the Contract or to resell the
related Manufactured Home to the person against whom recourse exists at the
price set forth in the document creating the recourse.
(d) So long as Conseco Finance Corp. is the Servicer, the Servicer may
grant to the Obligor on any Contract any rebate, refund or adjustment out of the
Certificate Account that the
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Servicer in good faith believes is required because of prepayment in full of the
Contract. The Servicer will not permit any rescission or cancellation of any
Contract.
(e) So long as Conseco Finance Corp. is the Servicer, the Servicer may,
consistent with its customary servicing procedures and consistent with Section
5.02, grant to the Obligor on any Contract an extension of payments due under
such Contract, provided that Obligors may not be solicited for extensions, no
such extension may extend beyond the final scheduled payment date of the
Contract with the latest maturity, as specified in Section 3.04(c), and no more
than one extension of payments under a Contract may be granted in any twelve-
month period.
(f) The Servicer may enforce any due-on-sale clause in a Contract if such
enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Contract is permitted by the Servicer
upon conveyance of the related Manufactured Home, the Servicer shall use its
best efforts to obtain an assumption agreement in connection therewith and add
such assumption agreement to the related Contract File or Land-and-Home Contract
File.
(g) Any provision of this Agreement to the contrary notwithstanding, the
Servicer shall not agree to the modification or waiver of any provision of a
Contract if such modification or waiver would be treated as a taxable exchange
under the REMIC Provisions.
(h) In the event that any Contract that was 60 or more days delinquent as
of the Closing Date, or Subsequent Transfer Date if a Subsequent Contract (each,
a "Delinquent Contract") goes into foreclosure, if acquiring title to the
related Mortgaged Property or Manufactured Home would cause the adjusted basis,
for federal income tax purposes, of Delinquent Contracts that are currently in
foreclosure or repossession, along with any other assets owned by the Subsidiary
REMIC other than "qualified mortgages", qualified "foreclosure property" and
"permitted investments" within the meaning of Section 860G of the Code, to
exceed 0.75% of the Pool Scheduled Principal Balance, the Servicer shall not
acquire title to that Mortgaged Property or Manufactured Home on behalf of the
Subsidiary REMIC. Instead, the Servicer shall dispose of the Mortgaged Property
or Manufactured Home for cash in a foreclosure sale. In addition, if the
Servicer determines that the adjusted basis of Delinquent Contracts that are
currently in foreclosure or repossession on any Remittance Date, along with any
other assets owned by the Subsidiary REMIC, other than "qualified mortgages",
"foreclosure property" and "permitted investments" with the meaning of Section
860G of the Internal Revenue Code, exceeds 1.0% of the Pool Scheduled Principal
Balance after giving effect to prepayments on the Contracts, then prior to such
Remittance Date, the Servicer shall dispose of sufficient Mortgaged Properties
and Manufactured Homes securing Delinquent Contracts and acquired upon
foreclosure repossession, for cash, so that the adjusted basis of Delinquent
Contracts that are currently in foreclosure or repossession, along with any
other assets owned by the Subsidiary REMIC, other than "qualified mortgages",
"foreclosure property" and "permitted investments" within the meaning of Section
860G of the Code, will be less than 1.0% of the Pool Scheduled Principal
Balance. In either event, the Servicer may acquire, for its own account and not
on behalf of the Subsidiary REMIC, the Mortgaged Property or Manufactured Home
at the foreclosure sale for an amount not less than the greater of: (i) the
highest amount bid by any
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other person at the foreclosure sale, or (ii) the estimated fair value of the
Mortgaged Property or Manufactured Home, as determined by the Servicer in good
faith.
SECTION 5.07 Trustee to Cooperate.
(a) Upon payment in full on any Contract, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the Servicer)
on the next succeeding Remittance 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). The
Servicer is authorized to execute an instrument in satisfaction of such Contract
and to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the lien on the
related real estate. The Servicer shall determine when a Contract has been paid
in full; to the extent that insufficient payments are received on a Contract
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.
(b) From time to time as appropriate for servicing and foreclosure in
connection with any Land-and-Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt signed
by such Servicing Officer, cause the original Land-and-Home Contract and the
related Land-and-Home Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such Land-
and-Home Contract to be released to the Servicer with a notation that the Land-
and-Home Contract 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 C Certificateholders' rights and remedies with
respect to Contracts.
(c) The Servicer's receipt of a Land-and-Home Contract and/or Land-and-Home
Contract File shall obligate the Servicer to return the original Land-and-Home
Contract and the related Land-and-Home Contract File to the Trustee when its
need by the Servicer has ceased unless the Contract shall be liquidated or
repurchased or replaced as described in Section 3.06.
SECTION 5.08 Costs and Expenses. All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, including all fees and expenses
incurred in connection with the enforcement of Contracts (including enforcement
of defaulted Contracts and repossessions of Manufactured Homes securing such
Contracts) shall be paid by the Servicer and the Servicer shall not be entitled
to reimbursement hereunder, except that the Servicer shall be reimbursed out of
the Liquidation Proceeds of a Liquidated Contract for Liquidation Expenses
incurred by it. The Servicer shall not incur such Liquidation Expenses unless it
determines in its good faith business judgment that incurring such expenses will
increase the Net Liquidation Proceeds on the related Contract.
SECTION 5.09 Maintenance of Insurance.
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(a) Except as otherwise provided in subsection (b) of this Section 5.09,
the Servicer shall cause to be maintained with respect to each Contract one or
more Hazard Insurance Policies which provide, at a minimum, the same coverage as
a standard form fire and extended coverage insurance policy that is customary
for manufactured housing, issued by a company authorized to issue such policies
in the state in which the related Manufactured Home is located and in an amount
which is not less than the maximum insurable value of such Manufactured Home or
the principal balance due from the Obligor on the related Contract, whichever is
less; provided, however, that the amount of coverage provided by each Hazard
Insurance Policy shall be sufficient to avoid the application of any co-
insurance clause contained therein; and provided, further, that such Hazard
Insurance Policies may provide for customary deductible amounts. With respect
to: (x) a Manufactured Home securing an FHA/VA Contract, if such Manufactured
Home's location was, at the time of origination of the related FHA/VA Contract,
within a federally designated special flood hazard area, the Servicer shall also
cause such flood insurance to be maintained, which coverage shall be at least
equal to the minimum amount specified in the preceding sentence or such lesser
amount as may be available under the federal flood insurance program; and (y)
any Contract that is not an FHA/VA Contract, the Originator shall obtain (i) a
statement from the Obligor's insurance agent that the Manufactured Home was, at
the time of origination of the Contract, not in a federally designated special
flood hazard area, or (ii) evidence that, at the time of origination, flood
insurance was in effect, which coverage was at least equal to the minimum amount
specified in the preceding sentence or such lesser amount as may be available
under the federal flood insurance program. Each Hazard Insurance Policy caused
to be maintained by the Servicer shall contain a standard loss payee clause in
favor of the Servicer and its successors and assigns. If any Obligor is in
default in the payment of premiums on its Hazard Insurance Policy or Policies,
the Servicer shall pay such premiums out of its own funds and may separately add
such premium to the Obligor's obligation as provided by the Contract, but shall
not add such premium to the remaining principal balance of the Contract.
(b) The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 5.09, and shall, to the extent that the related
Contract does not require the Obligor to maintain a Hazard Insurance Policy with
respect to the related Manufactured Home, maintain one or more blanket insurance
policies covering losses on the creditor's interest in the Contracts resulting
from the absence or insufficiency of individual Hazard Insurance Policies. Any
such blanket policy shall be substantially in the form and in the amount carried
by the Servicer as of the date of this Agreement. The Servicer shall pay the
premium for such policy on the basis described therein and shall deposit into
the Certificate Account from its own funds any deductible amount with respect to
claims under such blanket insurance policy relating to the Contracts. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to claims under individual Hazard Insurance Policies maintained pursuant
to subsection (a) of this Section. If the insurer under such blanket insurance
policy shall cease to be acceptable to the Servicer, the Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy.
(c) With respect to each Manufactured Home that has been repossessed in
connection with a defaulted Contract, the Servicer shall either (i) maintain one
or more Hazard Insurance Policies thereon or (ii) self-insure such Manufactured
Homes and deposit into the Certificate
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Account from its own funds any losses caused by damage to such Manufactured Home
that would have been covered by a Hazard Insurance Policy.
(d) The Servicer shall keep in force throughout the term of this Agreement
(i) a policy or policies of insurance covering errors and omissions for failure
to maintain insurance as required by this Agreement and (ii) a fidelity bond.
Such policy or policies and such fidelity bond shall be in such form and amount
as is generally customary among Persons which service a portfolio of
manufactured housing installment sales contracts and installment loan agreements
having an aggregate principal amount of $100,000,000 or more and which are
generally regarded as servicers acceptable to institutional investors.
SECTION 5.10 Repossession. Notwithstanding the standard of care specified
in Section 5.02, the Servicer shall commence procedures for the repossession of
any Manufactured Home or the foreclosure upon any Mortgaged Property or take
such other steps that in the Servicer's reasonable judgment will maximize the
receipt of principal and interest or Net Liquidation Proceeds with respect to
the Contract secured by such Manufactured Home or Mortgaged Property (which may
include retitling or filing a recorded assignment of the Mortgage) subject to
the requirements of the applicable state and federal law, no later than five
Business Days after the time when such Contract becomes a Defaulted Contract;
provided that if the Servicer has actual knowledge that a Mortgaged Property is
affected by hazardous waste, then the Servicer shall not cause the Trust to
acquire title to such Mortgaged Property in a foreclosure or similar proceeding.
For purposes of the proviso in the preceding sentence, the Servicer shall not be
deemed to have actual knowledge that a Mortgaged Property is affected by
hazardous waste unless it shall have received written notice that hazardous
waste is present on such property and such written notice has been made a part
of the Land-and-Home Contract File with respect to the related Contract. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be consistent with Section 5.02. In the event that title to any Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed
or certificate of sale shall be issued to the Trustee, as Trustee, or, at its
election, to its nominee on behalf of the Trustee, as Trustee.
SECTION 5.11 Commingling of Funds. So long as Conseco Finance Corp. is the
Servicer, any collections in respect of Contracts collected by Conseco Finance
Corp. shall, prior to the deposit thereof in the Certificate Account, be held in
bank accounts entitled substantially as follows: "[name of depository], as agent
for U.S. Bank National Association as Trustee, other trustees, and Conseco
Finance Corp., as their interests may appear."
SECTION 5.12 Retitling; Security Interests.
(a) If, at any time, a Service Transfer has occurred and Conseco Finance
Corp. is no longer the Servicer and the new Servicer is unable to foreclose upon
a Manufactured Home because the title document for such Manufactured Home does
not show such Servicer or the Trustee as the holder of the first priority
security interest in the Manufactured Home, such Servicer shall take all
necessary steps to apply for a replacement title document showing it or the
Trustee as the secured party.
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(b) In order to facilitate the Servicer's actions, as described in
subsection (a) of this section, Conseco Finance Corp. will provide the Servicer
with any necessary power of attorney permitting it to retitle the Manufactured
Home.
(c) If the Servicer is still unable to retitle the Manufactured Home,
Conseco Finance Corp. will take all actions necessary to act with the Servicer
to foreclose upon the Manufactured Home, including, as appropriate, the filing
of any UCC-1 or UCC-2 financing statements necessary to perfect the security
interest in any Manufactured Home that constitutes a fixture under the laws of
the jurisdiction in which it is located and all actions necessary to perfect the
security interest in any Manufactured Home that is considered or classified as
part of the real estate on which it is located under the laws of the
jurisdiction in which it is located.
(d) The Originator shall
(i) deliver to the Trustee an Opinion of Counsel to the effect that
assignment and recordation of the Mortgages, securing Land-and-Home
Contracts relating to real estate located in any state other than
those states specified in such Opinion of Counsel (the "recordation
states"), is not necessary to effect the assignment to the Trustee of
the Originator's lien on the real property securing such Land-and-Home
Contracts, and
(ii) file in the appropriate recording offices within 60 days after the
Closing Date (or within 30 days after receipt of the recorded
Mortgage, if later) the assignments to the Trustee on behalf of the
Trust of the Mortgages securing all Land-and-Home Contracts secured by
Mortgages relating to real estate located in the recordation states.
SECTION 5.13 Covenants, Representations and Warranties of Servicer. By its
execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Trust relies in accepting
the Contracts and issuing the Certificates.
(a) Organization and Good Standing. The Servicer 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 Servicer 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 Servicer, or its
ability to carry out its obligations hereunder.
(b) Authorization; Binding Obligations. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or
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similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(c) No Consent Required. The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses, approvals
and authorizations as have been obtained.
(d) No Violations. The execution, delivery and performance by the Servicer
of this Agreement and the fulfillment of its terms will not violate any
provision of any existing law or regulation or any order or decree of any court
or the related Certificate of Incorporation or Bylaws of the Servicer, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Servicer is a party or by which the Servicer may be
bound.
(e) Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Servicer have a material
adverse effect on the transactions contemplated by this Agreement.
(f) Chief Executive Office and Jurisdiction of Incorporation. The chief
executive office of the Servicer is at 1100 Landmark Towers, 000 Xx. Xxxxx
Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000. The Servicer is a Delaware corporation.
(g) No Default. The Servicer 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 its condition (financial or other) or operations or its properties or the
consequences of which would materially and adversely affect its performance
hereunder. The Servicer 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.
(h) No Impairment. The Servicer shall do nothing to impair the rights of
the Trust, or the Certificateholders in the Certificates.
(i) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Contract, except in accordance with Section 5.06.
ARTICLE VI
REPORTS AND TAX MATTERS
SECTION 6.01 Monthly Reports.
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(a) No later than 1:00 p.m. on each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent, the Originator (if the Originator is
not the Servicer) and the Rating Agencies a "Monthly Report," substantially in
the form of Exhibit M hereto.
(b) If the applicable Monthly Report indicates that there is a Class M-1
Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a
Class B-1 Interest Deficiency Amount, the Servicer shall promptly notify the
Trustee, by telephone, of the aggregate amount of such Class M-1 Interest
Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1 Interest
Deficiency Amount. On the day one Business Day prior to the related Remittance
Date, the Trustee shall determine the total amount of funds in the Certificate
Account available to pay such deficiency in accordance with Section 8.03(d) and
shall promptly notify the Servicer of such amount. If the total amount of funds
in the Certificate Account is not sufficient to pay the deficiency, the Trustee
shall promptly notify the Servicer, and shall reflect such deficiency in the
reports delivered to Certificateholders pursuant to Section 6.05.
SECTION 6.02 Certificate of Servicing Officer. Each Monthly Report pursuant
to Section 6.01 shall be accompanied by a certificate of a Servicing Officer
substantially in the form of Exhibit I, 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, Standard &
Poor's, Xxxxx'x, Fitch or a Certificateholder, furnish the Trustee and/or
Standard & Poor's, Xxxxx'x, Fitch or a Certificateholder 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, 2002, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to 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.
(a) The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class A Certificates, Class A-IO, Class M-1
Certificates, Class M-2 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3I Certificates on or before the third Business Day
next preceding each Remittance Date. The Trustee and the Servicer shall inform
any Certificateholder or any Underwriter inquiring by telephone of the
information contained in the most recent Monthly Report.
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(b) Concurrently with each distribution charged to the Certificate Account
the Trustee, so long as it has received the Monthly Report from the Servicer,
shall forward or cause to be forwarded by mail to each Holder of a Class A
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 Class A
Certificates allocable to interest (including any Unpaid Class M-1
Basis Risk Carryover Shortfall), separately identifying any Unpaid
Class A Interest Shortfall included in such distribution and any
remaining Unpaid Class A Interest Shortfall after giving effect to
such distribution;
(ii) the amount of such distribution to Holders of each class of Class A
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein, and
any remaining Unpaid Class A Principal Shortfall after giving effect
to such distribution;
(iii) the Class Principal Balance for each class of Class A Certificates
and the Class A-IO Notional Principal Amount, after giving effect to
the distribution of principal on such Remittance Date;
(iv) the Class A Percentage for such Remittance Date and the following
Remittance Date;
(v) the Pool Scheduled Principal Balance of the Contracts for such
Remittance Date;
(vi) the Pool Factor;
(vii) the number and aggregate principal balances of Contracts delinquent
(a) 30-59 days and (b) 60 or more days;
(viii) the number of Manufactured Homes that were repossessed during the
month ending immediately prior to such Remittance Date, the number
of repossessed Manufactured Homes that remain in inventory as of the
last day of the related Due Period and repossessed Manufactured
Homes purchased by the Originator or a subsidiary of the Originator
from the Trust (during the related Due Period and cumulatively) by
number of Contracts, aggregate Scheduled Principal Balance of such
Contracts and aggregate purchase price;
(ix) number of Contracts and aggregate Scheduled Principal Balance of
Contracts extended or otherwise amended during the Due Period
preceding current Remittance Date.
(x) the Class M-1 Distribution Test (as set forth in Exhibit M hereto);
(xi) the Class M-2 Distribution Test (as set forth in Exhibit M hereto);
(xii) the Class B Distribution Test (as set forth in Exhibit M hereto);
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(xiii) the Weighted Average Contract Rate and Adjusted Weighted Average
Contract Rate;
(xiv) the Class M-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xv) the Class M-2 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvi) the Class B-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvii) the Overcollateralization Amount, if any, for such Remittance Date;
and
(xviii)the Additional Principal Distribution Amount, if any, to be
distributed on such Remittance Date pursuant to Section
8.03(a)(xiv).
In the case of information furnished pursuant to clauses (i) through (iii)
above, the amounts shall be expressed as a dollar amount per Class A Certificate
or Class A-IO Certificate with a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class A Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Certificates during such calendar year. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in force.
(c) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates on such
Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class M-1 Certificateholders as part of the Monthly
Report, the following information:
(i) the amount of such distribution to Holders of Class M-1 Certificates
allocable to interest, separately identifying any Unpaid Class M-1
Interest Shortfall included in such distribution, any remaining
Unpaid Class M-1 Interest Shortfall after giving effect to such
distribution, any Class M-1 Liquidation Loss Interest Amount
included in such distribution and any remaining unpaid Class M-1
Liquidation Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-1 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein and any remaining
Unpaid Class M-1 Principal Shortfall after giving effect to such
distribution;
(iii) the Class M-1 Principal Balance and the Class M-1 Adjusted Principal
Balance (if different) after giving effect to the distribution of
principal on such Remittance Date;
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(iv) the Class M-1 Percentage for such Remittance Date and the following
Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-1 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
(d) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates and Class M-1
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class M-2 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class M-2 Certificates
allocable to interest, separately identifying any Unpaid Class M-2
Interest Shortfall included in such distribution, any remaining
Unpaid Class M-2 Interest Shortfall after giving effect to such
distribution, any Class M-2 Liquidation Loss Interest Amount
included in such distribution and any remaining unpaid Class M-2
Liquidation Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-2 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein and any remaining
Unpaid Class M-2 Principal Shortfall after giving effect to such
distribution;
(iii) the Class M-2 Principal Balance and the Class M-2 Adjusted Principal
Balance (if different) after giving effect to the distribution of
principal on such Remittance Date;
(iv) the Class M-2 Percentage for such Remittance Date and the following
Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
$1,000 denomination.
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Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-2 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
(e) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1 and Class M-2
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class B-1 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-1 Certificates
allocable to interest, separately identifying any Unpaid Class B-1
Interest Shortfall included in such distribution, any remaining
Unpaid Class B-1 Interest Shortfall after giving effect to such
distribution, any Class B-1 Liquidation Loss Interest Amount
included in such distribution and any remaining Unpaid Class B-1
Liquidation Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-1 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein, and any remaining
Unpaid Class B-1 Principal Shortfall after giving effect to such
distribution;
(iii) the Class B-1 Principal Balance and the Class B-1 Adjusted Principal
Balance (if different) after giving effect to the distribution of
principal on such Remittance Date;
(iv) the Class B Percentage for such Remittance Date and the following
Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-1 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
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(f) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2 and
Class B-1 Certificates on such Remittance Date. The Servicer shall also furnish
to the Trustee, which shall forward such report to the Class B-2
Certificateholders as part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-2 Certificates
allocable to interest, separately identifying any Unpaid Class B-2
Interest Shortfall included in such distribution and any remaining
Unpaid Class B-2 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-2 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein, and any Unpaid Class
B-2 Principal Shortfall after giving effect to such distribution;
(iii) the amount, if any, by which the Class B-2 Formula Distribution
Amount for such Remittance Date exceeds the remaining Amount
Available for such Remittance Date;
(iv) the Class B-2 Principal Balance and Class B-2 Adjusted Principal
Balance, if different, after giving effect to the distribution of
principal on such Remittance Date;
(v) the Class B Percentage for such Remittance Date and the following
Remittance Date;
(vi) the information described above in Section 6.05(b)(v) through
(xviii);
(vii) the Class B-2 Liquidation Loss Amount, if any, for such Remittance
Date;
(viii) the Weighted Average Contract Rate of all outstanding Contracts.
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-2 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
(g) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-3I Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such
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Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class B-3I Certificateholders as part of the Monthly
Report, the following information:
(i) the Class B-3I Formula Distribution Amount for such Remittance Date;
and
(ii) the Class B-3I Distribution Amount for such Remittance Date.
(h) Copies of all reports provided to the Trustee for the
Certificateholders shall also be provided to Standard & Poor's, Moody's and
Fitch and to the Class C Certificateholders. In addition, Certificate Owners
may receive copies of any reports provided to the Trustee for the
Certificateholders, upon written request together with a certification that they
are Certificate Owners and payment of reproduction and postage expenses
associated with the distribution of such reports, from the Trustee at the
Corporate Trust Office.
SECTION 6.06 Payment of Taxes. The Servicer shall be responsible for and
agrees to prepare, make and 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 Subsidiary REMIC,
Intermediate REMIC or Master REMIC 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 Subsidiary REMIC, Intermediate REMIC or
Master REMIC 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 execution of
any and all such tax returns, statements and documents. The Servicer, if and for
so long as it is a Class C Certificateholder, shall be designated the "tax
matters person" on behalf of the Subsidiary REMIC, Intermediate REMIC and Master
REMIC, respectively, 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 a Class C
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 Subsidiary REMIC, Intermediate REMIC and Master REMIC,
respectively, if, and during such time as, the Servicer is not the holder of a
Class C Certificate. The Servicer may, at its expense, retain such outside
assistance as it deems necessary in the performance of its obligations under
this paragraph.
Each of the Holders of the Certificates, 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 Subsidiary REMIC, Intermediate REMIC or Master REMIC. The
Originator, as agent for the tax matters person, shall represent the Subsidiary
REMIC, the Intermediate REMIC or the Master REMIC in connection with all
examinations of the affairs of the Subsidiary REMIC, Intermediate REMIC or
Master REMIC by tax authorities, including resulting administrative and judicial
proceedings. Each of the holders of the Certificates, by acceptance thereof,
agrees to cooperate with the Originator in such matters and to do or refrain
from doing any or all things reasonably required by the Originator to conduct
such proceedings, provided that no such action shall be required by the
Originator of any
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Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class C Subsidiary Certificateholder, Class C Intermediate
Certificateholder and Class C Master Certificateholder shall pay, on behalf of
the Subsidiary REMIC, Intermediate REMIC or Master REMIC, respectively, 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
Subsidiary REMIC, Intermediate REMIC or Master REMIC as a 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, the Trustee, the Originator or such Servicer, as the case
may be, shall indemnify the Class C Certificateholders for the payment of any
such tax or charge. The Trustee shall be entitled to withhold from amounts
otherwise distributable to the Class C Certificateholders any taxes or charges
payable by the Class C Certificateholders hereunder.
In the event a Class C 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 Seller shall provide to the Internal
Revenue Service and the persons specified in Sections 860E(e)(3) 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 such
Class C Certificate to such a disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent
required by the REMIC Provisions, the Seller shall, upon the written request of
persons designated in Section 860E(e)(3) of the Code, furnish to such requesting
party and the Internal Revenue Service information sufficient to compute the
present value of anticipated excess inclusions within 60 days of the receipt of
such written request.
ARTICLE VII
SERVICE TRANSFER
SECTION 7.01 Event of Termination.
"Event of Termination" means the occurrence of any of the following:
(i) any failure by the Servicer to make any deposit into an account
required to be made hereunder and the continuance of such failure for
a period of five Business Days after the Servicer has become aware, or
should have become aware, that such deposit was required;
(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 after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the
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Trustee or to the Servicer and the Trustee by Holders of Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates and Class
B Certificates evidencing, as to any such Class, Percentage Interests
aggregating not less than 25%;
(iii)any assignment by the Servicer of its duties hereunder except as
specifically permitted hereunder, or any attempt to make such an
assignment;
(iv) if (x) the Servicer's long-term debt rating from Standard & Poor's is
not then "BBB-" or higher, or (y) the Servicer's long-term debt rating
from Xxxxx'x is not then "Baa3" or higher, or (z) the Servicer's long-
term debt rating from Fitch is not then "BBB-" or higher, and
(A) if such Remittance Date occurs between January 1, 2002 and
December 31, 2002, the Cumulative Realized Losses as of such
Remittance Date are greater than 2.50% of the Cut-off Date Pool
Principal Balance;
(B) if such Remittance Date occurs between January 1, 2003 and
December 31, 2003, the Cumulative Realized Losses as of such
Remittance Date are greater than 5.50% of the Cut-off Date Pool
Principal Balance;
(C) if such Remittance Date occurs between January 1, 2004 and
December 31, 2004, the Cumulative Realized Losses as of such
Remittance Date are greater than 7.50% of the Cut-off Date Pool
Principal Balance;
(D) if such Remittance Date occurs between January 1, 2005 and
December 31, 2005, the Cumulative Realized Losses as of such
Remittance Date are greater than 10.50% of the Cut-off Date Pool
Principal Balance;
(E) if such Remittance Date occurs between January 1, 2006 and
December 31, 2006, the Cumulative Realized Losses as of such
Remittance Date are greater than 12.60% of the Cut-off Date Pool
Principal Balance;
(F) if such Remittance Date occurs between January 1, 2007 and
December 31, 2007, the Cumulative Realized Losses as of such
Remittance Date are greater than 13.50% of the Cut-off Date Pool
Principal Balance;
(G) if such Remittance Date occurs between January 1, 2008 and
December 31, 2008, the Cumulative Realized Losses as of such
Remittance Date are greater than 14.25% of the Cut-off Date Pool
Principal Balance;
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(v) if (x) the Servicer's long-term debt rating from each of Standard &
Poor's and Fitch is then "BBB-" or higher, and (y) the Servicer's
long-term debt rating from Xxxxx'x is then "Baa3" or higher, and
(A) if such Remittance Date occurs between January 1, 2002 and
December 31, 2002, the Cumulative Realized Losses as of such
Remittance Date are greater than 3.25% of the Cut-off Date Pool
Principal Balance;
(B) if such Remittance Date occurs between January 1, 2003 and
December 31, 2003, the Cumulative Realized Losses as of such
Remittance Date are greater than 6.90% of the Cut-off Date Pool
Principal Balance;
(C) if such Remittance Date occurs between January 1, 2004 and
December 31, 2004, the Cumulative Realized Losses as of such
Remittance Date are greater than 9.60% of the Cut-off Date Pool
Principal Balance;
(D) if such Remittance Date occurs between January 1, 2005 and
December 31, 2005, the Cumulative Realized Losses as of such
Remittance Date are greater than 13.65% of the Cut-off Date Pool
Principal Balance;
(E) if such Remittance Date occurs between January 1, 2006 and
December 31, 2006, the Cumulative Realized Losses as of such
Remittance Date are greater than 16.40% of the Cut-off Date Pool
Principal Balance;
(F) if such Remittance Date occurs between January 1, 2007 and
December 31, 2007, the Cumulative Realized Losses as of such
Remittance Date are greater than 17.50% of the Cut-off Date Pool
Principal Balance;
(G) if such Remittance Date occurs between January 1, 2008 and
December 31, 2008, the Cumulative Realized Losses as of such
Remittance Date are greater than 18.45% of the Cut-off Date Pool
Principal Balance;
(vi) a court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect
of the Servicer in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Servicer, as the
case may be, or for any substantial liquidation of its affairs, and
such order remains undischarged and unstayed for at least 60 days;
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(vii) 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; or
(viii) the failure of the Servicer to be an Eligible Servicer.
SECTION 7.02 Transfer. If an Event of Termination has occurred and is
continuing, either the Trustee or Certificateholders with aggregate Percentage
Interests representing 25% or more of the Trust, by notice in writing to the
Servicer (and to the Trustee if given by the Certificateholders) may with the
prior written consent of the Certificate Insurer (or, with respect to an Event
of Termination pursuant to Sections 7.01(iv) or (v) at the direction of the
Certificate Insurer, shall) terminate all (but not less than all) of the
Servicer's management, administrative, servicing and collection functions (such
termination being herein called a "Service Transfer"). On receipt of such notice
(or, if later, on a date designated therein), or upon resignation of the
Servicer in accordance with Section 12.01, all authority and power of the
Servicer under this Agreement, whether with respect to the Contracts, the
Contract Files, the Land-and-Home Contract Files or otherwise (except with
respect to the Certificate Account, the transfer of which shall be governed by
Section 7.06), shall pass to and be vested in the Trustee pursuant to and under
this Section 7.02; and, without limitation, the Trustee is authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments (including, without
limitation, documents required to make the Trustee or a successor servicer the
sole lienholder or legal title holder of record of each Manufactured Home) and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. Each of the Originator and the Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Trustee 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 Contracts and
the execution of any documents required to make the Trustee or a successor
servicer the sole lienholder or legal title holder of record in respect of each
Manufactured Home. The Servicer shall be entitled to receive any other amounts
which are payable to the Servicer under the Agreement, at the time of the
termination of its activities as Servicer. The Servicer shall transfer to the
new servicer
(i) the Servicer's records relating to the Contracts in such electronic
form as the new servicer may reasonably request and
(ii) any Contracts, Contract Files and Land-and-Home Contract Files in the
Servicer's possession.
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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 or
the resignation of the Servicer in accordance with Section 12.01, the Trustee
shall be the successor in all respects to the 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 Servicer by the terms and provisions hereof and
the Servicer shall be relieved of such responsibilities, duties and liabilities
arising after such Service Transfer; provided, however, that (i) the Trustee
will not assume any obligations of the Originator pursuant to Section 3.06 and
(ii) the Trustee shall not be liable for any acts or omissions of the Servicer
occurring prior to such Service Transfer or for any breach by the Servicer of
any of its obligations contained herein or in any related document or agreement.
As compensation therefor, the Trustee shall be entitled to receive reasonable
compensation out of the Monthly Servicing Fee and the Additional Monthly
Servicing Fee. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, an Eligible Servicer
acceptable to the Certificate Insurer 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 Contracts 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 the Additional 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.
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, the Rating Agencies
and the Certificateholders 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 Rating Agencies and the Certificateholders at their
respective addresses appearing on the Certificate Register.
(c) The Trustee shall give written notice to the Rating Agencies at least
30 days prior to the date upon which any Eligible Servicer (other than the
Trustee) is to assume the responsibilities of Servicer pursuant to Section 7.03,
naming such successor Servicer.
SECTION 7.05 Effect of Transfer. After the Service Transfer, the Trustee or
new Servicer may notify Obligors to make payments directly to the new Servicer
that are due under the Contracts after the effective date of the Service
Transfer.
(a) After the Service Transfer, the replaced Servicer shall have no further
obligations with respect to the management, administration, servicing or
collection of the Contracts and the
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new Servicer shall have all of such obligations, except that the replaced
Servicer will transmit or cause to be transmitted directly to the new Servicer
for its own 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 Contracts.
(b) 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 3.06, 11.06 and 11.11(f))
other than those relating to the management, administration, servicing or
collection of the Contracts.
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 an Eligible Account with an institution other than the Servicer and
promptly transfer all funds in the Certificate Account to such new account,
which shall thereafter be deemed the Certificate Account for the purposes
hereof.
ARTICLE VIII
PAYMENTS
SECTION 8.01 Monthly Payments.
(a) Subject to the terms of this Article VIII, each Holder of a Certificate
as of a Record Date shall be paid on the next succeeding Remittance Date by
check mailed on such Remittance Date to such Certificateholder at the address
for such Certificateholder appearing on the Certificate Register (or, if such
Certificateholder holds a Class of Class A Certificates, Class M Certificates,
or Class B Certificates with an aggregate Percentage Interest of at least 5% or
a Class B-3I, Class C Subsidiary, Class C Intermediate or Class C Master
Certificateholder holds a Class B-3I, Class C Subsidiary, Class C Intermediate
or Class C Master Certificate with an aggregate Percentage Interest of at least
20% and so requests, by wire transfer pursuant to instructions delivered to the
Trustee at least ten days prior to such Remittance Date), the sum equal to such
Certificateholder's Percentage Interest of all amounts distributed on the
applicable Class of Certificates. Final payment of any Certificate shall be
made only upon presentation of such 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 Xxxxxxxxx,
00
the Originator, the Seller nor the Servicer shall have any responsibility
therefor except as otherwise provided by applicable law. To the extent
applicable and not contrary to the rules of the Depository, the Trustee shall
comply with the provisions of the forms of the Class A, Class M, and Class B
Certificates as set forth in Exhibits X-0, X-0, B and C hereto.
(c) The Trustee shall either act as the paying agent or shall appoint an
institution meeting the eligibility requirements set forth in Section 11.06 to
be the paying agent (in either case, the "Paying Agent") and cause it to make
the payments to the Certificateholders required hereunder. The Trustee's
Corporate Trust Office at 000 Xxxx Xxxxx Xxxxxx, 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 that it will notify
the Trustee of any failure by the Servicer to make funds available to the Paying
Agent for the payment of amounts due on the Certificates.
SECTION 8.02 Permitted Withdrawals from the Certificate Account. The
Trustee may, 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 Contracts for the following purposes:
(i) to make payments in the amounts and in the manner provided for in
Section 8.03;
(ii) to pay to the Originator with respect to each Contract 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;
(iii)to reimburse the Servicer out of Liquidation Proceeds for Liquidation
Expenses incurred by it, to the extent such reimbursement is permitted
pursuant to Section 5.08;
(iv) to withdraw any amount deposited in the Certificate Account that was
not required to be deposited therein; or
(v) to make any rebates or adjustments deemed necessary by the Servicer
pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clause (ii), the
Servicer's entitlement thereto is limited to collections or other recoveries on
the related Contract, the Servicer shall keep and maintain separate accounting,
on a Contract by Contract basis, for the purpose of justifying any withdrawal
from the Certificate Account pursuant to such clause.
SECTION 8.03 Payments.
(a) On each Remittance Date the Trustee shall withdraw from the Certificate
Account the Amount Available (as determined on the immediately preceding
Determination Date), plus (x) on the Post-Funding Remittance Date any Pre-Funded
Amount and (y) on the Funding
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Termination Date any amount withdrawn from the Staged-Funding Contract Reserve
Account and deposited in the Certificate Account as described in Section
3.08(c), and apply such funds to make payment in the following order of
priority, subject to Section 8.03(e):
(i) if neither Conseco Finance Corp. nor a wholly owned subsidiary of
Conseco Finance Corp. is the Servicer, to pay the Monthly Servicing
Fee and any other compensation owed to the Servicer pursuant to
Section 7.03, except the Additional Monthly Servicing Fee;
(ii) On each Remittance Date occurring in January 2002 through and
including June 2004 and from the Class B-3I Formula Distribution
Amount otherwise payable to the Class B-3I Certificateholders, any
current Cap Provider Fee outstanding;
(iii) after payment of the amount specified in clauses (i)-(ii) above, to
the Class A and Class A-IO Certificateholders as follows:
(A) the amount in clause (i)(A) of the definition of Class A Formula
Distribution Amount to the Class A-1 Certificateholders; the
amount in clause (i)(B) to the Class A-2 Certificateholders; the
amount in clause (i)(C) to the Class A-3 Certificateholders; the
amount in clause (i)(D) to the Class A-4 Certificateholders; and
the amount in clause (i) of the definition of Class A-IO Formula
Distribution Amount to the Class A-IO Certificateholders; or, if
the available amount is less than the sum of the amounts
specified in this clause (A), pro rata to each class of Class A
and the Class A-IO Certificates based on the amount of interest
payable pursuant to this clause;
(B) the Unpaid Class A Interest Shortfall and the Unpaid Class A-IO
Interest Shortfall pro rata to each class of Class A and the
Class A-IO Certificates based on the Unpaid Class A Interest
Shortfall and the Unpaid Class A-IO Interest Shortfall;
(iv) after payment of the amounts specified in clauses (i)-(iii) above,
to the Class M-1 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class M-1 Formula
Distribution Amount;
(B) any Unpaid Class M-1 Interest Shortfall;
(v) after payment of the amounts specified in clauses (i)-(iv) above, to
the Class M-2 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class M-2 Formula
Distribution Amount;
(B) any Unpaid Class M-2 Interest Shortfall;
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(vi) after payment of the amounts specified in clauses (i)-(v) above, to
the Class B-1 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class B-1 Formula
Distribution Amount;
(B) any Unpaid Class B-1 Interest Shortfall;
(vii) after payment of the amounts specified in clauses (i)-(vi) above, to
the Class A Certificateholders as follows:
(A) if there is a Class A Principal Deficiency Amount as of such
Remittance Date, the remaining Amount Available, pro rata to each
class of Class A Certificates based on the related Class
Principal Balance (but in no event shall such amount exceed the
related Class Principal Balance);
(B) the Unpaid Class A Principal Shortfall to the Class A-1, Class X-
0, Class A-3 and Class A-4 Certificateholders in the order of
priority set forth in clause (C) below, but to each Class of
Class A Certificates, no more than the Unpaid Class A Principal
Shortfall attributable to such Class;
(C) if such Remittance Date is on or prior to the Class A-4 Cross-
Over Date, the Class A Percentage of the Formula Principal
Distribution Amount to the Class A Certificateholders as follows:
(1) to the Class A-1 Certificateholders, but in no event more
than the Class A-1 Principal Balance;
(2) to the Class A-2 Certificateholders, but in no event more
than the Class A-2 Principal Balance;
(3) to the Class A-3 Certificateholders, but in no event more
than the Class A-3 Principal Balance; and
(4) to the Class A-4 Certificateholders, but in no event more
than the Class A-4 Principal Balance;
(viii) after payment of the amounts specified in clauses (i)-(vii) above,
to the Class M-1 Certificateholders as follows:
(A) any Unpaid Class M-1 Principal Shortfall;
(B) the Class M-1 Percentage of the Formula Principal Distribution
Amount (plus, if such Remittance Date is on the Class A-4 Cross-
Over Date, the amount by which the Class A Percentage of the
Formula Principal Distribution Amount exceeds the Class A
Principal Balance on such date), but in no event more than the
Class M-1 Principal Balance;
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(C) any Class M-1 Liquidation Loss Interest Amount;
(D) any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
(ix) after payment of the amounts specified in clauses (i)-(viii) above,
to the Class M-2 Certificateholders as follows:
(A) any Unpaid Class M-2 Principal Shortfall;
(B) the Class M-2 Percentage of the Formula Principal Distribution
Amount (plus, if such Remittance Date is on the Class M-1 Cross-
Over Date, the amount, if any, by which the sum of the Class A
Percentage and the Class M-1 Percentage of the Formula Principal
Distribution Amount exceeds the sum of the Class A and Class M-1
Principal Balances on such date), but in no event more than the
Class M-2 Principal Balance;
(C) any Class M-2 Liquidation Loss Interest Amount;
(D) any Unpaid Class M-2 Liquidation Loss Interest Shortfall;
(x) after payment of the amounts specified in clauses (i)-(ix) above, to
the Class B-1 Certificateholders as follows:
(A) any Unpaid Class B-1 Principal Shortfall;
(B) the Class B Percentage of the Formula Principal Distribution
Amount (plus, if such Remittance Date is on the Class M-2 Cross-
Over Date, the amount, if any, by which the sum of the Class A,
Class M-1 and Class M-2 Percentages of the Formula Principal
Distribution Amount exceeds the sum of the Class A, Class M-1 and
Class M-2 Principal Balances on such date), but in no event more
than the Class B-1 Principal Balance;
(C) any Class B-1 Liquidation Loss Interest Amount;
(D) any Unpaid Class B-1 Liquidation Loss Interest Shortfall;
(xi) after payment of the amounts specified in clauses (i)-(x) above, to
the Class B-2 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class B-2 Formula
Distribution Amount;
(B) any Unpaid Class B-2 Interest Shortfall;
(C) any Unpaid Class X-0 Xxxxxxxxx Xxxxxxxxx;
000
(X) if such Remittance Date is on or after the Class B-1 Cross-Over
Date, the Class B Percentage of the Formula Principal
Distribution Amount (minus, if such Remittance Date is on the
Class B-1 Cross-Over Date, the amount of the Class B Percentage
of the Formula Principal Distribution Amount actually distributed
to the Class B-1 Certificateholders on such date, and plus, if
such Remittance Date is on the Class B-1 Cross-Over Date, the
amount, if any, by which the Formula Principal Distribution
Amount exceeds the sum of the Class A Principal Balance, the
Class M-1 Principal Balance, the Class M-2 Principal Balance and
the Class B-1 Principal Balance on such date);
(xii) to the Basis Risk Reserve Fund from the Class B-3I Formula
Distribution Amount otherwise payable to the Class B-3I
Certificateholders, (A) the sum of the Unpaid Class M-1 Basis Risk
Carryover Shortfall after taking into account any amounts to be
applied to the payment thereof in accordance with Section 8.08
hereof and (B) the Basis Risk Reserve Shortfall;
(xiii) if Conseco Finance Corp. or a wholly owned subsidiary of the Company
is the Servicer, after payment of the amounts specified in clauses
(i)-(xii) above, to pay the Monthly Servicing Fee and any other
compensation owed to the Servicer pursuant to Section 7.02, and if
Conseco Finance Corp. or a wholly owned subsidiary of Conseco
Finance is not the Servicer, to pay the Additional Monthly Servicing
Fee to the Servicer;
(xiv) after payment of the amounts specified in clauses (i)-(xiii) above,
to the Certificateholders any Additional Principal Distribution
Amount, as follows and in no case more than the Class Principal
Balance of any Class:
(A) to the Class A Certificateholders (sequentially, beginning with
Class A-1), until the first Remittance Date on which the
Overcollateralization Amount equals $9,500,000; and
(B) on each Additional Principal Payment Date (as defined in Section
8.05(d)), to the Class M-1, Class M-2, Class B-1 and Class B-2
Certificateholders pro rata based upon the Class Principal
Balance of each Class and then, if the Class M and Class B
Certificates have been paid in full, to the Class A
Certificateholders;
(xv) after payment of the amounts specified in clauses (i)-(xiv) above,
the Class B-3I Distribution Amount to the Class B-3I
Certificateholders;
(xvi) after payment of the amounts specified in clauses (i) -(xv) above,
to reimburse the Class C Certificateholders for expenses incurred by
and reimbursable to them pursuant to Section 10.06; and
(xvii) after payment of the amounts specified in clauses (i)-(xvi) above,
any remaining funds to the Class C Master Certificateholders.
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(b) On each Remittance Date, the Uncertificated Intermediate Interests
shall receive distributions, to the extent of the Adjusted Amount Available plus
the amounts described in Section 8.03(d), in the following order of priority:
(i) to each Class of Uncertificated Intermediate Interests, pro rata
based on its respective entitlement, accrued interest as follows:
(A) for each such Class other than the Class I-AIO Interest, 1/12th
of the Adjusted Net WAC Cap Rate times the Intermediate Interest
Principal Balance of such Class; provided that interest accrued
on the Class I-Accrual Interest shall be paid as principal to the
Intermediate REMIC Accretion Directed Interests pursuant to
Section 8.03(b)(ii), and added to the Intermediate Interest
Principal Balance of the Class I-Accrual Interest, in an amount
equal to the sum of (x) one-half the Overcollateralization Amount
Increase for that Remittance Date plus (y) any amount by which
one-half the aggregate of the Overcollateralization Amount
Increases on prior Remittance Dates exceeds the aggregate amount
so paid to the Intermediate REMIC Accretion Directed Interests
and added to the Class I-Accrual Interest (such excess not to
accrue interest); and
(B) for the Class I-AIO Interest, interest equal to (A) 2.50% per
annum multiplied by the sum of the Subsidiary Interest Adjusted
Principal Balance of the (1) Class S-2(1) Interest through and
including the March 2002 Remittance Date, (2) Class S-2(2)
Interest through and including the June 2002 Remittance Date, (3)
Class S-2(3) Interest through and including the September 2002
Remittance Date, (4) Class S-2(4) Interest through and including
the December 2002 Remittance Date, (5) Class S-2(5) Interest
through and including the March 2003 Remittance Date, (6) Class
S-2(6) Interest through and including the June 2003 Remittance
Date, (7) Class S-2(7) Interest through and including the
September 2003 Remittance Date, (8) Class S-2(8) Interest through
and including the December 2003 Remittance Date, (9) Class S-2(9)
Interest through and including the March 2004 Remittance Date,
(10) Class S-2(10) Interest through and including the June 2004
Remittance Date, (11) Class S-2(11) Interest through and
including the September 2004 Remittance Date, (12) Class S-2(12)
Interest through and including the December 2004 Remittance Date,
(13) Class S-2(13) Interest through and including the March 2005
Remittance Date, (14) Class S-2(14) Interest through and
including the June 2005 Remittance Date, (15) Class S-2(15)
Interest through and including the September 2005 Remittance
Date, (16) Class S-2(16) Interest through and including the
December 2005 Remittance Date, (17) Class S-2(17) Interest
through and including the March 2006 Remittance Date, (18) Class
S-2(18) Interest through and including the June 2006 Remittance
Date, (19) Class S-2(19) Interest through and including the
September 2006 Remittance Date, (20) Class S-2(20) Interest
through and including the December 2006 Remittance Date, (21)
Class S-2(21) Interest through and including the March 2007
Remittance
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Date, (22) Class S-2(22) Interest through and including the June
2007 Remittance Date, (23) Class S-2(23) Interest through and
including the September 2007 Remittance Date and (B) 0%
thereafter, plus
(C) any Unpaid Intermediate Interest Shortfall with respect to such
Class;
(ii) To the Class I-Accrual Interest, principal in an amount equal to
one-half the principal distributed on the Class A, Class M and
Class B Certificates on such Remittance Date; and to each
Intermediate REMIC Accretion Directed Interest, principal (including
that payable to the Intermediate REMIC Accretion Directed Interests
as described in Section 8.03(b)(i)(A)) in an amount equal to one-
half the principal distributed to its Corresponding Certificate
Class on such Remittance Date. Realized losses shall be allocated to
each Class of Uncertificated Intermediate Interests in an amount
sufficient to reduce the Intermediate REMIC Principal Balance of (i)
the Class I-Accrual Interest to one-half the sum of (A) the Pool
Scheduled Principal Balance, (B) the Pre-Funded Amount and (C) the
Overcollateralization Amount and (b) each Class of Intermediate
REMIC Accretion Directed Interests to one-half the Class Principal
Balance of its Corresponding Certificate Class after giving effect
to distributions on such Remittance Date.
(iii) To the Class C Intermediate Certificateholder, any remaining Amount
Available.
(c) On each Remittance Date, the Uncertificated Subsidiary Interests shall
receive distributions, to the extent of the Adjusted Amount Available plus the
amount described in Section 8.03(d), in the following order of priority:
(i) Payment of the Monthly Servicing Fee and other compensation owed to
the Servicer, if any, in the amount specified in Section 8.03(a)(i);
(ii) Each of the Class S-1 and Class S-2 Interests shall receive
distributions of interest, pro rata based on their respective
entitlements, in an amount equal to (i) 1/12 of the Weighted Average
Contract Rate times the Subsidiary Interest Principal Balance of
such Class, plus (ii) any Unpaid Subsidiary Interest Shortfall with
respect to such Class;
(iii) Distributions of principal shall be made to each Class S-1 and Class
S-2 Interest sequentially, i.e., first to the Class S-1 Interest,
second to the Class S-2(1) Interest and last (after each other Class
S-2 Interest) to the Class S-2(23) Interest, in an amount equal to
its respective Subsidiary Interest Principal Balance; and
(iv) Any remaining Amount Available shall be distributed to the Class C
Subsidiary Certificateholder.
(d) If the applicable Monthly Report indicates a Class M-1 Interest
Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a Class B-1
Interest Deficiency Amount for such Remittance Date, the Trustee shall withdraw
from the Certificate Account (to the extent of funds on deposit therein one
Business Day prior to such Remittance Date, after
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distribution of the Amount Available pursuant to Section 8.03(a)) an amount
equal to the Class M-1 Interest Deficiency Amount, the Class M-2 Interest
Deficiency Amount and the Class B-1 Interest Deficiency Amount (or the amount of
such funds in the Certificate Account, if less) and distribute such amount,
first to the Class M-1 Certificateholders up to the amount of the Class M-1
Interest Deficiency Amount (or pro rata, if such funds are less than the Class
M-1 Interest Deficiency Amount), if any, then to the Class M-2
Certificateholders up to the amount of the Class M-2 Interest Deficiency Amount
(or pro rata, if such funds are less than the Class M-2 Interest Deficiency
Amount), if any, and then to the Class B-1 Certificateholders up to the amount
of the Class B-1 Interest Deficiency Amount (or pro rata, if such remaining
funds are less than the Class B-1 Interest Deficiency Amount); provided,
however, that
(i) no such withdrawal shall be made with respect to the Class M-1
Interest Deficiency Amount if the Cumulative Realized Losses as of
such Remittance Date are greater than $124,687,500;
(ii) no such withdrawal shall be made with respect to the Class M-2
Interest Deficiency Amount if the Cumulative Realized Losses as of
such Remittance Date are greater than $103,906,250;
(iii)no withdrawal with respect to Class B-1 Interest Deficiency Amount
shall be made if the Cumulative Realized Losses as of such Remittance
Date are greater than $83,125,000;
(iv) no withdrawal with respect to a Class M-1 Interest Deficiency Amount
shall be made if the aggregate withdrawals with respect to all prior
Class M-1 Interest Deficiency Amounts equal $1,923,780;
(v) no withdrawal with respect to a Class M-2 Interest Deficiency Amount
shall be made if the aggregate withdrawals with respect to all prior
Class M-2 Interest Deficiency Amounts equal $1,484,159; and
(vi) no withdrawal with respect to a Class B-1 Interest Deficiency Amount
shall be made if the aggregate withdrawals with respect to all prior
Class B-1 Interest Deficiency Amounts equal $1,640,888.
(e) Notwithstanding the priorities set forth above, any Pre-Funded Amount
deposited in the Certificate Account shall be applied solely to pay principal of
the Class A Certificates and any amount withdrawn from the Capitalized Interest
Account and deposited in the Certificate Account shall be applied solely as
described in Section 8.06.
(f) If the Trustee shall not have received the applicable Monthly Report by
any Remittance Date, the Trustee shall distribute all funds then in the
Certificate Account to Certificateholders in accordance with Section 8.03(a), to
the extent of such funds, on such Remittance Date.
SECTION 8.04 [RESERVED].
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SECTION 8.05 Class C Subsidiary Certificateholder's Purchase Option;
Additional Principal Distribution Amount.
(a) Subject to the conditions in subsection (b) below, the Class C
Subsidiary Certificateholder shall have the option to purchase all of the
Contracts and all property acquired in respect of any Contract remaining in the
Trust at a price (such price being referred to as the "Minimum Purchase Price")
equal to the greater of:
(i) the sum of (A) 100% of the principal balance of each Contract (other
than any Contract as to which title to the underlying property has
been acquired and whose fair market value is included pursuant to
clause (B) below), plus (B) the fair market value of such acquired
property (as determined by the Originator as of the close of business
on the third Business Day next preceding the date upon which notice of
any such termination is furnished to Certificateholders pursuant to
Section 12.04) or
(ii) the aggregate fair market value (as determined by the Originator as of
the close of business on such third Business Day) of all of the assets
of the Trust,
plus, in either case, (x) any Unpaid Class A Interest Shortfall, any Unpaid
Class M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest
Shortfall, any Unpaid Class M-2 Interest Shortfall, any Unpaid Class M-2
Liquidation Loss Interest Shortfall, any Unpaid Class B-1 Interest Shortfall,
any Unpaid Class B-1 Liquidation Loss Interest Shortfall and any Unpaid Class B-
2 Interest Shortfall as well as one month's interest at the applicable Contract
Rate on the Scheduled Principal Balance of each Contract (including any Contract
as to which the related Manufactured Home has been repossessed) and (y) the
excess of $3,948,000 over the sum of the Cap Provider Fees paid under Section
8.03(a)(ii) on all Remittance Dates preceding the purchase date..
(b) The purchase by the Class C Subsidiary Certificateholder of all of the
Contracts pursuant to Section 8.05(a) above shall be at the option of the Class
C Subsidiary Certificateholder, but shall be conditioned upon (i) the Pool
Scheduled Principal Balance, at the time of any such purchase, aggregating not
more than 10% of the Cut-off Date Pool Principal Balance, (ii) such purchase
being made pursuant to a plan of complete liquidation of each of the Subsidiary
REMIC, Intermediate REMIC and Master REMIC in accordance with Section 860F of
the Code, as provided in Section 12.03, (iii) the Class C Subsidiary
Certificateholder having provided the Trustee, the Servicer and the Depository
(if any) with at least 30 days' written notice specifying the purchase date,
which shall be a Remittance Date, and (iv) the Class C Subsidiary
Certificateholder having delivered to the Trustee an unqualified Opinion of
Counsel stating that payment of the purchase price to the Certificateholders
will not constitute a voidable preference or fraudulent transfer under the
United States Bankruptcy Code.
The Trustee shall acknowledge in writing its receipt of notice given under
this Section 8.05(b). On the purchase date specified in its notice, the Class C
Subsidiary Certificateholder shall deliver the purchase price to the Trustee, in
immediately available funds, the Trustee shall pay the sum described in Section
8.06(a)(y) to the LIBOR Cap Counterparty and deposit the balance of the purchase
price in the Certificate Account for distribution in accordance with
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Section 12.03, and the Trustee and the Servicer shall release to the Class C
Subsidiary Certificateholder the Contract Files and Land-and-Home Contract Files
for all the purchased Contracts. The Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
(c) The Class C Subsidiary Certificateholder may assign its rights under
this Section 8.05, separately from its other rights as Holder of the Class C
Subsidiary Certificate, by giving written notice of such assignment to the
Trustee and the Servicer. Following the Trustee's receipt of such notice 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 8.05(a).
(d) The Servicer shall notify the Trustee, any assignee described in
Section 8.05(c), and the Class C Subsidiary Certificateholder (whether or not
the Class C Subsidiary Certificateholder has then assigned its rights under this
Section 8.05 pursuant to subsection (c)), no later than two Business Days after
the Determination Date occurring in the first Due Period which includes the date
on which the Pool Scheduled Principal Balance first becomes less than or equal
to 10% of the Cut-off Date Pool Principal Balance, to the effect that the Pool
Scheduled Principal Balance is then less than or equal to 10% of the Cut-off
Date Pool Principal Balance.
(e) If the Class C Subsidiary Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option described
in subsection (b) by the Remittance Date occurring in the month following the
Determination Date specified in subsection (C), then on the following Remittance
Date and each Remittance Date thereafter (each, an "Additional Principal Payment
Date") the Certificates shall be entitled to receive the Additional Principal
Distribution Amount pursuant to Section 8.03(a)(xiv).
SECTION 8.06 [RESERVED].
SECTION 8.07 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. The
Pre-Funding Account shall be entitled "Pre-Funding Account, U.S. Bank National
Association as Trustee for the benefit of holders of Certificates, Series 2001-
4." The Trustee shall maintain within the Pre-Funding Account two subaccounts,
the Pre-Funding Subaccount and the Undelivered Contract Subaccount. The
Undelivered Contract Subaccount pertains to those Land-and-Home Contracts
transferred to the Trust on the Closing Date that are Undelivered Contracts.
Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee
for the Holders of the Certificates for the uses and purposes set forth herein.
(b) Amounts on deposit in the Pre-Funding Subaccount shall be withdrawn by
the Trustee as provided below.
(1) On any Subsequent Transfer Date, the Trustee shall withdraw an amount
equal to 100% of the Cut-off Date Principal Balance of each Subsequent
Contract transferred and assigned to the Trustee on such Subsequent
Transfer Date and pay
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such amount to or upon the order of the Seller
upon satisfaction of the conditions set forth in Section 2.03(b) with
respect to such transfer and assignment.
(2) On the Business Day immediately preceding the Post-Funding Remittance
Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Pre-Funding Subaccount, net of investment
earnings.
(c) The Trustee shall deposit in the Undelivered Contract Subaccount the
amount received from the Seller pursuant to Section 2.02(xxi). Amounts on
deposit in the Undelivered Contract Subaccount shall be withdrawn by the Trustee
as described below.
(1) If the Seller delivers the related Land-and-Home Contract File for an
Undelivered Contract to the Trustee at least two Business Days before
the last day of the Pre-Funding Period, the Trustee shall withdraw an
amount equal to 100% of the Cut-off Date Principal Balance of such
Contract and pay such amount to or upon the order of the Seller.
(2) [Reserved]
(3) The Seller shall give the Trustee telephonic notice of its intended
delivery of Land-and-Home Contract Files. The Trustee will use
reasonable efforts to process the Land-and-Home Contract Files and
remit any amount payable for them to the Seller in a timely manner.
(4) On the Business Day immediately preceding the Post-Funding Remittance
Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Undelivered Contract Subaccount, net of
investment earnings.
(d) The Pre-Funding Account shall be part of the Trust but not part of the
Master REMIC, Intermediate REMIC or Subsidiary 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 Investment" and that
mature no later than the Business Day prior to the next succeeding Remittance
Date. All amounts earned on deposits in the Pre-Funding Account shall be
taxable to the Seller. Any losses on such investments shall be deposited in the
Pre-Funding Account by the Seller immediately as realized. The Trustee shall
release to the Seller all investment earnings in the Pre-Funding Account on the
Post-Funding Remittance Date.
SECTION 8.08 Yield Maintenance Reserve Fund.
(a) On or before the Closing Date, the Trustee shall establish a Yield
Maintenance Reserve Fund, which must be an Eligible Account, on behalf of the
Class M-1 Certificateholders. The Trustee shall deposit in the Yield
Maintenance Reserve Fund any Reserve Fund Addition received from the LIBOR Cap
Counterparty pursuant to the Yield Maintenance Agreement. The Trustee shall
demand payment of all money payable by the LIBOR Cap Counterparty under the
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Yield Maintenance Reserve Agreement. The Yield Maintenance Reserve Fund shall
be entitled "Yield Maintenance Reserve Fund, U.S. Bank National Association as
Trustee for the benefit of holders of Manufactured Housing Certificates, Series
2001-4, Class M-1." On each Remittance Date the Trustee shall pay directly to
the Class M-1 Certificateholders, the lesser of the Unpaid Class M-1 Basis Risk
Carryover Shortfall and the amount on deposit in the Yield Maintenance Reserve
Fund.
(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 8.08(a). For all Federal tax purposes, all amounts
transferred by a REMIC to the Yield Maintenance Reserve Fund pursuant to Section
8.03(a)(ii) shall be treated as amounts distributed by a REMIC to the Class B-3I
Certificateholder or its transferee. 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 Remittance Date. All net income and gain from such investments
shall be distributed to the Class B-3I Certificateholder on such Remittance
Date. All 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 8.09 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.
The Trustee shall deposit therein on each Payment Date any amount available for
that purpose pursuant to Section 8.03(a)(xii). The Basis Risk Reserve Fund
shall be entitled "Basis Risk Reserve Fund, U.S. Bank Trust National Association
as Trustee for the benefit of holders of Manufactured Housing Certificates,
Series 2001-4, Class M-1." On each Remittance Date the Trustee shall pay
directly to the Class M-1 Certificateholders, the Unpaid Class M-1 Basis Risk
Carryover Shortfall (reduced by amounts paid pursuant to Section 8.08(a)). Any
remainder in excess of $5,000 shall be paid to the Class B-3I Certificateholder,
until the final Remittance Date when any remainder shall be so paid.
(b) 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 8.09(a).
For all Federal tax purposes, all amounts transferred by a REMIC to the Basis
Risk Reserve Fund pursuant to Section 8.03(a)(xii) 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 Remittance Date. All net income
and gain from such investments shall be distributed to the Class B-3I
Certificateholder on such Remittance Date. All amounts earned on amounts on
deposit in the
109
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.
ARTICLE IX
THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS
SECTION 9.01 The Certificates.
(a) The Uncertificated Subsidiary Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the original Subsidiary Interest
Principal Balance specified with respect to such Class of Uncertificated
Subsidiary Interests. The Class C Subsidiary Certificate shall be substantially
in the form set forth in Exhibit J hereto, and shall, on original issue, be
executed by the Trustee on behalf of the Trust upon order of the Originator.
The Class C Subsidiary Certificate shall be issuable in Percentage Interests,
and shall be evidenced by a single Class C Subsidiary Certificate issued on the
Closing Date to Green Tree Finance Corp.-Two.
(b) The Uncertificated Intermediate Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the Original Principal Balance
specified with respect to such Class of Uncertificated Intermediate Interests.
The Class C Intermediate Certificate shall be substantially in the form set
forth in Exhibit J hereto, and shall, on original issue, be executed by the
Trustee on behalf of the Trust upon order of the Originator. The Class C
Intermediate Certificate shall be issuable in Percentage Interests, and shall be
evidenced by a single Class C Intermediate Certificate issued on the Closing
Date to Green Tree Finance Corp.-Two.
(c) The Class A, the Class A-IO, the Class M, the Class B, the Class B-3I
and the Class C Master Certificates shall be substantially in the forms set
forth in Exhibits A, B, C-1, C-2, J and K, respectively, 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 A, the Class A-IO, the Class M, and the Class B
Certificates shall be evidenced by
(i) one or more Class A-1 Certificates representing $105,000,000 initial
aggregate principal balance,
(ii) one or more Class A-2 Certificates representing $90,000,000 initial
aggregate principal balance,
(iii) one or more Class A-3 Certificates representing $38,000,000 initial
aggregate principal balance,
(iv) one or more Class A-4 Certificates representing $143,437,000 initial
aggregate principal balance,
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(v) one or more Class A-IO Certificates representing $95,000,000 Original
Notional Principal Amount,
(vi) one or more Class M-1 Certificates representing $32,063,000 initial
aggregate principal balance,
(vii) one or more Class M-2 Certificates representing $23,037,000 initial
aggregate principal balance,
(viii)one or more Class B-1 Certificates representing $23,275,000 initial
aggregate principal balance,
(ix) one or more Class B-2 Certificates representing $20,188,000 initial
aggregate principal balance.
Beneficial ownership of the Class A, Class A-IO, Class M and Class B-1
Certificates shall be held through Book-Entry Certificates. The Class B-2
Certificates shall not be Book-Entry Certificates as of the Closing Date but may
at the option of the Class B-2 Certificateholder be converted into Book-Entry
Certificates at any time thereafter, upon compliance with the normal procedures
of the Trustee and the Depository. The Class A, Class A-IO, Class M and Class B
Certificates shall be issuable in minimum dollar denominations of $1,000 and
integral dollar multiples of $1,000 in excess thereof. The Class B-3I, Class C
Master, Class C Intermediate and Class C Subsidiary Certificates shall be
issuable in Percentage Interests and shall each be evidenced by a single
certificate issued on the Closing Date to Green Tree Finance Corp.-Two.
(d) The Certificates shall be executed by manual signature on behalf of the
Trustee by a duly authorized Responsible Officer or authorized signatory.
Certificates 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 did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless such Certificate has
been executed by manual signature in accordance with this Section, and such
signature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their execution, except for those
Certificates executed on the Closing Date, which shall be dated the Closing
Date.
SECTION 9.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.02 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.
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(b) The provisions of this Subsection (b) also apply with respect to any
transfers of Certificates.
(1) Subject to clauses (2) and (3) below, no transfer of a Class B-2
Certificate, Class B-3I Certificate or Class C Certificate shall be
made by the Originator or any other Person unless such transfer is
exempt from the registration requirements of 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, (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 L attached hereto, which
investment letter shall not be an expense of the Trustee or the
Originator. Any Class B-2 Certificateholder, Class B-3I
Certificateholder or Class C 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.
(2) No transfer of a Class B-2 Certificate, a Class B-3I Certificate or a
Class C Certificate or any interest therein, shall be made to any
employee benefit plan, trust or account that is subject to ERISA, or
that is described in Section 4975(e)(1) of the Code (each, a "Plan"),
or to any person investing on behalf of or with "plan assets" or a
plan unless the prospective transferee of a Certificate or interest
therein provides the Servicer and the Trustee with a certification of
facts and, at its own expense, an Opinion of Counsel which establish
to the satisfaction of the Servicer and the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975
of the Code or cause the Servicer, the Originator or the Trustee to be
deemed a fiduciary of such Plan or result in the imposition of an
excise tax under Section 4975 of the Code.
(3) Notwithstanding anything to the contrary contained herein,
(A) neither the Class C Subsidiary Certificate nor the Class C Master
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,
(i) 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,
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(ii) 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
(iii) a cooperative described in Section 1381(a)(2)(C) of the
Code, and
(B) prior to any registration of any transfer, sale or other
disposition of the Class C Subsidiary Certificate or Class C
Master 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 for 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 noneconomic
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 C Certificate by any Disqualified Organization
will not result in the imposition of federal income tax upon the
Subsidiary REMIC, Intermediate REMIC or Master REMIC or any
Certificateholder or any other person or otherwise adversely affect
the status of the Subsidiary REMIC, Intermediate REMIC or Master 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 the Class C 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 to not be the Class C
Certificateholder for any purpose hereunder, including, but not
limited to, the receipt of distributions on the Class C Certificate,
and shall be deemed to have no interest whatsoever in the Class C
Certificate. Each Class C Certificateholder, by his acceptance
thereof, shall be deemed for all purposes to have consented to the
provisions of this Section 9.02(b)(3).
(4) 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 to not be the Certificateholder for any purpose hereunder,
including, but not limited to, the receipt of distributions on such
Certificate, and shall be deemed to have no interest whatsoever in
such Certificate.
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(5) The Trustee shall give notice to Standard & Poor's, Moody's and Fitch
promptly following any transfer, sale or other disposition of a Class
B-3I or Class C Certificate.
(c) At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of authorized denominations of a like aggregate original
denomination, upon surrender of such Certificates to be exchanged at such
office. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every 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 the Book-Entry 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 Book-Entry Certificates;
(iii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;
(v) the Trustee shall deal with the Depository, Depository Participants
and indirect participating firms as representatives of the
Certificate Owners of the Book-Entry Certificates for purposes of
exercising the rights of Holders under this Agreement, and requests
and directions for and votes of such representatives shall not be
deemed to be inconsistent if they are made with respect to different
Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants
with respect to indirect participating firms and persons shown on the
books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
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(e) If
(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
(iii) 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 Class A Certificates, Class M Certificates and Class B Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates and Class B Certificates by the Depository, accompanied
by registration instructions from the Depository for registration, the Trustee
shall issue the Definitive Certificates. Neither the 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 two Class A Certificates, one Class A-IO Certificate, one Class M-1
Certificate, one Class M-2 Certificate, and one Class B-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 related Original Principal
Balance or Original Notional Principal Amount, respectively. At any time after
the Closing Date, subject to compliance with the normal procedures of the
Trustee and the Depository, the Class B-2 Certificateholders may deliver to the
Depository one Class B-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 B-2 Certificate. If, however,
the aggregate principal amount of a Class of Class A Certificates, Class M
Certificates or Class B Certificates exceeds $400,000,000, one such Class A
Certificate, Class M Certificate and/or Class B Certificate will be issued with
respect to each $400,000,000 of principal amount and an additional Certificate
of such Class or Classes will be issued with respect to any remaining principal
amount. Each such Class A, Class M and Class B 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 Issuer 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
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OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
SECTION 9.03 No Charge; Disposition of Void Certificates. No service charge
shall be made to a Certificateholder for any transfer or exchange of
Certificates, 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 Certificates. All Certificates
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. If any
mutilated 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, and 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 has been acquired by a bona fide purchaser,
the Trustee shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and original denomination. Upon the issuance of any new 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
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 shall be
found at any time.
SECTION 9.05 Persons Deemed Owners. Prior to due presentation of a
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 is registered as the owner of such 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' 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 as of
the most recent Record Date. If Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more (hereinafter referred to as
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates 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 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, by receiving and holding a
Certificate, agrees with the Certificate
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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 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. For all purposes of
this Agreement, the execution and delivery of Certificates by the Authenticating
Agent pursuant to this Section shall be deemed to be the execution and delivery
of Certificates "by the Trustee."
ARTICLE X
INDEMNITIES
SECTION 10.01 Seller's and Originator's Indemnities. The Seller and
Originator will jointly and severally defend and indemnify the Trust, the
Trustee (including the Custodian, the Paying Agent and any other agents of the
Trustee), the Certificate Insurer and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation of any third-party
claims
(i) arising out of or resulting from the origination of any Contract
(including but not limited to truth in lending requirements) or the
servicing of such Contract prior to its transfer to the Trust (but
only to the extent such cost, expense, loss, damage, claim or
liability is not provided for by the Originator's repurchase of such
Contract pursuant to Section 3.06) or
(ii) arising out of or resulting from the use or ownership of any
Manufactured Homes by the Originator or the Servicer or any Affiliate
of either.
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 any subsequent Servicer after a
Service Transfer.
SECTION 10.02 Liabilities to Obligors. No obligation or liability to any
Obligor under any of the Contracts is intended to be assumed by the Trust or the
Certificateholders under or as a result of this Agreement and the transactions
contemplated hereby and, to the maximum extent permitted and valid under
mandatory provisions of law, the Trust and the Certificateholders 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, the Paying Agent and any other capacities of or agents of the
Trustee) and the Certificateholders from, any taxes which may at any time be
asserted with respect to, and as of the date of, the transfer of the Contracts
to the Trust, including, without limitation, any sales, gross receipts, general
corporation, personal
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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), any tax imposed on the Trust as a result of the Originator's
repurchase of any Contract pursuant to Section 3.06(c), 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 or the
Trustee under this Agreement or imposed against the Trust, a Certificateholder
or otherwise.
SECTION 10.04 Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian, the Paying Agent and
any other capacities of or agents of the Trustee), the Certificate Insurer and
the Certificateholders against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation, in respect of any action taken or omitted to be taken by
the Servicer with respect to any Contract. This indemnity shall survive any
Service Transfer (but the original Servicer's obligations under this Section
10.04 shall not relate to any actions of any subsequent Servicer after a Service
Transfer) and any payment of the amount owing under, or any repurchase by the
Originator of, any such Contract.
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 Trustee pursuant to this Article and the Trustee thereafter
collects any of such amounts from others, the Trust 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 C Certificateholder, pursuant
to Section 6.06, pays any taxes or charges imposed upon the Subsidiary REMIC,
Intermediate REMIC or Master REMIC, as the case may be, as a REMIC 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 C Certificateholder shall
be entitled to be reimbursed therefor out of the Certificate Account as provided
in Section 8.03; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class C 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 by the Originator, the
Trustee or any Servicer to comply with the provisions of Section 2.04.
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.
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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 as to form 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
subsections (a) - (d) below apply.
(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 with aggregate Percentage Interests
representing 25% or more of the Trust 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.
(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 Holders of Certificates
evidencing, as to any Class, Percentage Interests representing 25% or more.
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, subsections (a) - (e) below apply.
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(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 it hereunder in good faith and in accordance with such Opinion of
Counsel.
(c) The Trustee shall be under no obligation to exercise any of the 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 Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more; 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, if paid by the Trustee, shall be reimbursed by the Servicer
upon demand.
(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 or Contracts. The Trustee
assumes no responsibility for the correctness of the recitals contained herein
or in the Certificates (other than the Trustee's execution thereof). The Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
the Certificates (other than its execution thereof) or of any Contract, Contract
File, Land-and-Home Contract 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
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Contracts to the Trust by the Originator and the Seller or deposited into or
withdrawn from the Certificate Account by the Servicer.
SECTION 11.04 Rights of Certificateholders to Direct Trustee and to Waive
Event of Termination. Holders of Class A Certificates, Holders of Class A-IO
Certificates, Holders of Class M Certificates and Holders of Class B
Certificates evidencing, as to each such Class, Percentage Interests
representing 25% or more 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; and provided
further that the Trustee shall instead follow the directions of Holders of Class
A Certificates, Holders of Class A-IO Certificates, Holders of Class M
Certificates and Holders of Class B Certificates evidencing, as to each such
Class, Percentage Interests aggregating 51% or more whenever it receives
conflicting directions from Class A Certificateholders, Class A-IO
Certificateholders, Class M Certificateholders and Class B Certificateholders.
Holders of Class A Certificates, Holders of Class A-IO Certificates, Holders of
Class M Certificates and Holders of Class B Certificates evidencing, as to each
such Class, Percentage Interests representing 51% or more may on behalf of
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 12.07 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. Following the Class M-2
Cross-Over Date, if all distributions payable to the Class A Certificateholders,
Class A-IO Certificateholders and the Class M Certificateholders have either
been made or provided for in accordance with this Agreement, then the Holders of
Class B-1 Certificates may exercise the rights given to the Class A
Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section. Following the Class B-1 Cross-Over Date,
if all distributions payable to the Class A Certificateholders, Class A-IO
Certificateholders and the Class M Certificateholders have either been made or
provided for in accordance with this Agreement, then the Holders of Class B-2
Certificates may exercise the rights given to the Class A Certificateholders,
Class A-IO Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section.
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses. The Servicer
agrees to pay the fees and expenses set forth in subsections (a) - (c) below.
(a) The Servicer shall 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).
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(b) The Servicer shall, 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, except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
(c) The Servicer shall 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 this trust and its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
All such payments by the Servicer shall be made from its own funds. The
covenants in this Section 11.05 shall be for the benefit of the Trustee in its
capacities as Trustee, Custodian, Paying Agent and Certificate Registrar
hereunder, and shall survive the termination of this Agreement.
SECTION 11.06 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 a Title I approved lender pursuant
to FHA Regulations, shall not be an Affiliate of the Originator, 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 11.06, 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 a long-term deposit rating (or, if
the Trustee is a wholly owned subsidiary of a bank holding company system and
not rated, the bank holding company shall have a long-term senior unsecured debt
rating) from Standard & Poor's of at least BBB, or as shall be otherwise
acceptable to Standard & Poor's, and a rating from Xxxxx'x (if rated by Xxxxx'x)
of at least Baa3, or as shall be otherwise acceptable to Xxxxx'x and Fitch. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.07.
SECTION 11.07 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. A copy of any such notice
shall be sent to Standard & Poor's, Xxxxx'x and Fitch. 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 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.
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If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.06 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 11.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.08.
SECTION 11.08 Successor Trustee. Any successor Trustee appointed as
provided in Section 11.07 shall execute, acknowledge and deliver to the
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 Contracts, Contract Files
and Land-and-Home Contract Files and any related documents and statements held
by it hereunder; and, if the Land-and-Home Contract Files 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.
No successor Trustee shall accept appointment as provided in this Section
11.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 11.08, the Servicer shall cause notice of the succession of such Trustee
hereunder to be mailed to each 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 11.09 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 such Person shall be eligible under the provisions of Section 11.06,
without
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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 Standard & Poor's, Xxxxx'x and Fitch in the event
it is a party to any merger, conversion or consolidation.
SECTION 11.10 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 Subsidiary REMIC,
the Intermediate REMIC and the Master REMIC and the Trustee shall execute such
returns.
SECTION 11.11 Obligor Claims. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Contracts based upon provisions therein complying with, or
upon other rights or remedies arising from, any legal requirements applicable to
the Contracts, including, without limitation, the Federal Trade Commission's
Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses
(16 C.F.R. (S) 433) as amended from time to time. The Trustee and Originator
agree to the provisions set forth below.
(a) 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
seller of home improvements, in the arrangement, origination or making of
Contracts. The Trustee is the holder of the Contracts only as trustee on behalf
of the Certificateholders, and not as a principal or in any individual or
personal capacity.
(b) The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments, pursuant to such legal actions.
(c) The Trustee will pay, solely from available Trust monies, affirmative
claims for recovery by Obligors only pursuant to final judicial orders or
judgments, or judicially approved settlement agreements, resulting from such
legal actions.
(d) 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.
(e) The Trustee will cooperate with and assist Certificateholders in their
defense of legal actions by Obligors 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.
(f) The Originator hereby agrees to indemnify, hold harmless and defend the
Trustee, Certificateholders from and against any and all liability, loss, costs
and expenses of the Trustee, Certificateholders resulting from any affirmative
claims for recovery asserted or collected by Obligors under the Contracts.
Notwithstanding any other provision of this Agreement, the obligation of the
Originator under this Section 11.11(f) shall not terminate upon a Service
Transfer pursuant to Article VII.
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SECTION 11.12 Appointment of Co-Trustee or Separate Trustee. The Servicer
shall have the power from time to time to appoint one or more persons or
corporations to act either as co-trustees jointly with the Trustee, or as
separate trustees, or as custodians, for the purpose of conforming to any legal
requirement, restriction or condition (x) with respect to the holding of the
Contracts, the Contract Files and the Land-and-Home Contract Files or (y) with
respect to the enforcement of a Contract in any state in which a Manufactured
Home is located or in any state in which any portion of the Trust is located.
The separate trustees, co-trustees, or custodians so appointed shall be trustees
or custodians for the benefit of all Certificateholders and shall, subject to
the provisions of the following paragraph, have such powers, rights and remedies
as shall be specified in the instrument of appointment; provided, however, that
no such appointment shall, or shall be deemed to, constitute the appointee an
agent of the Trustee.
Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all powers, duties, obligations and rights conferred upon the Trustee
in respect of the receipt, custody and payment of monies shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or imposed
upon the Trustee, to the extent also imposed upon such separate
trustees, co-trustees or custodians, shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee, co-trustee, or custodian jointly, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed, the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations (including holding of the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee, co-trustee, or custodian;
(iii)no separate trustee, co-trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other
separate trustee, co-trustee or custodian hereunder; and
(iv) the Servicer may at any time accept the resignation of or remove any
separate trustee, co-trustee or custodian, so appointed by it.
If any separate trustee, co-trustee or custodian 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 or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Servicer if
and only to the extent the Servicer shall have consented in writing to his or
its appointment, which consent shall not be unreasonably withheld.
SECTION 11.13 Agents of Trustee. To the extent not prohibited by law and
not inconsistent with the terms of this Agreement (including, without
limitation, Section 11.12), the
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Trustee may, with the prior consent of the Servicer, appoint one or more agents
to carry out ministerial matters on behalf of the Trustee under this Agreement.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Servicer Not to Assign Duties or Resign; Delegation of
Servicing Functions. The Servicer may not sell or assign its rights and duties
as Servicer hereunder, except as expressly provided for herein, provided that
the Servicer may pledge or assign the right to receive all or any portion of the
Monthly Servicing Fee payable to it. The 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 applicable
law or is in material conflict by reason of applicable law with any other
activities carried on by it. Any such determination permitting the resignation
of the Servicer shall be evidenced by an Opinion of Counsel for the Servicer to
such effect addressed and 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 Sections
7.02 and 7.03.
Notwithstanding the foregoing, the Servicer agrees to comply with the
provisions of subsections (a)-(c) below.
(a) Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Servicer shall satisfy
the criteria set forth in the definition of an Eligible Servicer. The Servicer
shall promptly notify Standard & Poor's, Xxxxx'x and Fitch of any such merger to
which it is a party.
(b) Any Person acquiring all or substantially all of the manufactured
housing division of Conseco Finance Corp., who assumes all of the obligations of
the Servicer hereunder and who satisfies the criteria set forth in the
definition of "Eligible Servicer," shall become the Servicer hereunder. The
Servicer shall promptly notify Standard & Poor's, Xxxxx'x and Fitch of any such
acquisition.
(c) 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 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.
SECTION 12.02 Maintenance of Office or Agency. The Trustee will maintain in
St. Xxxx, Minnesota, an office or agency where Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustee in respect of the Certificates and this Agreement may be
served. On the date hereof the Trustee's office for such
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purposes is located at 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx-Xxxx. The Trustee will give prompt written notice to
Certificateholders and the Certificate Insurer of any change in the location of
the Certificate Register or any such office or agency.
SECTION 12.03 Termination.
(a) This Agreement, the Trust and each of the Subsidiary REMIC,
Intermediate REMIC and Master REMIC shall terminate (after distribution of all
amounts due to Certificateholders pursuant to Sections 8.01 and 8.03) on the
earlier of (i) the Remittance Date on which the Pool Scheduled Principal Balance
is reduced to zero and all amounts payable to Certificateholders on such
Remittance Date have been distributed to Certificateholders or (ii) the
Remittance Date on which the Class C Subsidiary Certificateholder (or its
assignee) purchases the Contracts pursuant to Section 8.05; 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.
(b) Any termination of the Master REMIC, Intermediate REMIC or Subsidiary
REMIC must be conducted so as to qualify as a "qualified liquidation of such
REMIC within the meaning of the REMIC provisions. The Trustee's acknowledgement
of a notice given under Section 8.05(b) shall constitute a plan of complete
liquidation of the Subsidiary REMIC, the Intermediate REMIC and the Master REMIC
within the meaning of Section 860F of the Code. Each Certificateholder hereby
irrevocably approves and appoints the Trustee as its attorney-in-fact for the
purposes of adoption of the plan of complete liquidation.
(c) Notice of any termination, specifying the Final Remittance Date (which
shall be a date that would otherwise be a Remittance Date) upon which all
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee (upon direction by the Servicer ten days prior to the date such notice
is to be mailed) by letter to the Certificate Registrar, the Rating Agencies and
the Certificateholders mailed no later than ten Business Days before the Final
Remittance Date specifying
(i) the Final Remittance Date upon which final payment on the Certificates
will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee therein designated;
(ii) the amount of any such final payment; and
(iii) that the Record Date otherwise applicable to such Remittance Date is
not applicable, payments being made only upon presentation and
surrender of the Certificates at the office or agency of the Trustee
therein specified.
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Each such notice shall, to the extent required by the REMIC Provisions or other
applicable law, be signed on behalf of the Trust and each of the Subsidiary
REMIC, the Intermediate REMIC and the Master REMIC by the Trustee.
(d) On the Final Remittance Date, upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of priority, to Certificateholders on the Final
Remittance Date in proportion to their respective Percentage Interests an amount
equal to
(i) as to Class A Certificates, the Class A Principal Balance, together
with any Unpaid Class A Interest Shortfall and one month's interest
at the related Remittance Rate on the related Class Principal
Balance (or Class A-IO Notional Principal Balance), respectively
(calculated in the manner specified in Section 1.03),
(ii) as to Class M-1 Certificates, the Class M-1 Principal Balance
together with any Unpaid Class M-1 Interest Shortfall, any Unpaid
Class M-1 Liquidation Loss Interest Shortfall and one month's
interest at the Class M-1 Remittance Rate on the Class M-1 Principal
Balance,
(iii) as to Class M-2 Certificates, the Class M-2 Principal Balance
together with any Unpaid Class M-2 Interest Shortfall, any Unpaid
Class M-2 Liquidation Loss Interest Shortfall and one month's
interest at the Class M-2 Remittance Rate on the Class M-2 Principal
Balance,
(iv) as to Class B-1 Certificates, the Class B-1 Principal Balance
together with any Unpaid Class B-1 Interest Shortfall, any Unpaid
Class B-1 Liquidation Loss Interest Shortfall and one month's
interest at the Class B-1 Remittance Rate on the Class B-1 Principal
Balance,
(v) as to Class B-2 Certificates, the Class B-2 Principal Balance
together with any Unpaid Class B-2 Interest Shortfall and one
month's interest at the Class B-2 Remittance Rate on the Class B-2
Principal Balance,
(vi) as to Class B-3I Certificates, the Class B-3I Distribution Amount
for that Remittance Date, and
(vii) as to Class C Master Certificate, the amount which remains on
deposit in the Certificate Account (other than amounts retained to
meet claims) after application pursuant to clauses (i)-(vi) above;
provided, however, that if the Final Remittance Date occurs as a result of the
sale of the Contracts pursuant to 8.05, the amount so distributed to the
Certificateholders shall not exceed the Minimum Purchase Price, and any balance
shall be paid to the purchaser of the Contracts. The distribution on the Final
Remittance Date shall be in lieu of the distribution otherwise required to be
made on such Remittance Date in respect of each Class of Certificates.
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(e) In the event that all of the Certificateholders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Originator shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
three months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Originator shall transfer to itself all
amounts remaining on deposit in the Certificate Account, to hold in trust for
Certificateholders who have not surrendered their Certificates for cancellation,
together with the final record list of Certificateholders, and the Originator
shall take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain in trust hereunder.
(f) Each Certificateholder hereby irrevocably approves and appoints the
Trustee as its attorney-in-fact for the purposes of adoption of the plan of
complete liquidation.
SECTION 12.04 Acts of Certificateholders.
(a) Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver or
other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates of the specified Class or Classes evidencing, as
to each such Class, Percentage Interests aggregating 51% or more.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
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 of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(d) The ownership of Certificates shall be proved by the Certificate
Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind every holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done by the Trustee,
the Servicer or the Originator in reliance thereon, whether or not notation of
such action is made upon such Security.
(f) The Trustee may require such additional proof of any matter referred to
in this Section as it shall deem necessary.
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SECTION 12.05 Calculations. Except as otherwise provided in Section 1.03,
all interest rate and basis point calculations under this Agreement will be made
on the basis of a 360-day year and twelve 30-day months and will be carried out
to at least three decimal places.
SECTION 12.06 Assignment or Delegation by Originator. 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 of each Class evidencing,
as to each such Class, Percentage Interests aggregating 66 2/3% or more, and any
attempt to do so without such consent shall be void. It is understood that the
foregoing does not prohibit the pledge or assignment by the Originator of any
right to payment pursuant to Article VIII.
Notwithstanding the foregoing, any person into which the Originator may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Originator shall be a party, or any Person
succeeding to the business of the Originator, shall be the successor of the
Originator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Originator shall promptly notify Standard &
Poor's, Moody's and Fitch of any such merger to which it is a party.
SECTION 12.07 Amendment.
(a) This Agreement may be amended from time to time by the Originator, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
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
each of the Subsidiary REMIC, Intermediate REMIC and Master REMIC 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 Subsidiary REMIC,
Intermediate REMIC, Master REMIC and the Certificateholders, including, without
limitation, to implement any provision permitted by law that would enable a
REMIC to avoid the imposition of any tax, to add or amend any provision as
required by Standard & Poor's, Xxxxx'x, Fitch or any other nationally recognized
statistical rating organization in order to improve or maintain the rating of
any Class of Class A Certificates, Class M Certificates or Class B Certificates,
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 Originator, 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 Holders of Certificates
of each Class affected thereby evidencing, as to each such Class, Percentage
Interests aggregating 51% or more, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall
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(i) reduce in any manner the amount of, or delay the timing of,
collections of payments on the Contracts 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 Subsidiary REMIC, Intermediate
REMIC or Master REMIC as a REMIC under the Code,
(iv) adversely affect the status of the Subsidiary REMIC, Intermediate
REMIC or Master REMIC as a REMIC or the status of the Regular
Certificates as "regular interests" in the Master REMIC or
(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
all Class C Certificateholders, 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 C Certificateholders.
(c) This Agreement shall not be amended under this Section without the
consent of 100% of Certificateholders if such amendment would result in the
disqualification of any of the Subsidiary REMIC, the Intermediate REMIC or the
Master REMIC as a REMIC under the Code.
(d) Concurrently with the solicitation of any consent pursuant to this
Section 12.07, the Trustee shall furnish written notification to the Rating
Agencies of such solicitation. Promptly after the execution of any amendment
pursuant to this Section 12.07, the Trustee shall furnish written notification
of the substance of such amendment to the Rating Agencies and each
Certificateholder.
(e) It shall not be necessary for the consent of Certificateholders under
this Section 12.07 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
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 unqualified Opinion of Counsel to the Servicer
to the effect that such amendment is authorized or permitted by the Agreement.
131
(h) In the absence of the consent described in subsection (c) 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 Subsidiary REMIC,
Intermediate REMIC or Master REMIC as a REMIC or the status of the
Regular Certificates as "regular interests" in the Master REMIC, and
(ii) will not 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.
(i) Notwithstanding anything to the contrary herein, so long as the Yield
Maintenance Agreement is in effect, this Agreement may not be amended without
the consent of the LIBOR Cap Counterparty if such amendment would (1) reduce in
any manner or delay payments to the LIBOR Cap Counterparty, (2) adversely affect
in any material respect the interests of the LIBOR Cap Counterparty in any
manner other than as described in clause (1), or (3) modify the consents
required by the immediately preceding clauses (1) and (2).
(j) Upon the execution of any amendment or consent pursuant to this Section
12.07, 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 hereunder shall be bound thereby.
SECTION 12.08 Notices. All communications and notices pursuant hereto to
the Servicer, the Originator and the Trustee 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 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
132
If to the Originator or Servicer:
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Trustee:
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx-Xxxx
Telecopier Number: (000) 000-0000
If to Standard & Poor's:
Standard & Poor's Rating Services,
a division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Securities, Surveillance Group
Telecopier Number: (000) 000-0000
If to Fitch:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
If to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Financing, Manufactured Housing Surveillance
Group
Telecopier Number: (000) 000-0000
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 shall
be in writing and delivered or mailed at the address shown in the Certificate
Register.
133
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.
134
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this 18th
day of December, 2001.
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
135
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class [A-1][A-2][A-3][A-4] No.
(Senior)
Remittance Rate: [_______%] [Rate equal
Cut-off Date: as defined in the Pooling to the lesser of (i) _____% and (ii) the Adjusted
and Servicing Agreement dated as of Net WAC Cap Rate]
December 1, 2001
Denomination: $1,000
First Remittance Date: Aggregate Denomination of
January, 2002 All Class [A-1][A-2][A-3][A-4] Certificates:
$__________________
Servicer:
Conseco Finance Corp. Maturity Date: _________________
(or if such day is not a Business Day, then the
next succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-4, CLASS [A-1][A-2][A-3][A-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 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 Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2001-4 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date. The Trust has been created pursuant to a Pooling and Servicing
Agreement (the "Agreement"), dated as of December 1, 2001, among Conseco Finance
Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one
A-1-1
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 first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in January 2002, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class of Class A Certificates with an aggregate Percentage Interest of at
least 5% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the portion of the Class A
Distribution Amount to be distributed to such Class of Class A Certificates. The
Maturity Date of this Certificate is ____________________ or the next succeeding
Business Day if such ________________ 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 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
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 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 Issuer 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
A-1-2
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the 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 Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-1-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-4 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated:________________
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATE
TRUST 2001-4
By U.S. BANK NATIONAL ASSOCIATION
By
-----------------------------------------
Authorized Signatory
A-1-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate 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.
Date: _______________
By
---------------------------------------------
Signature
X-0-0
XXXXXXX X-0
FORM OF CLASS A-IO 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.
Class A-IO No.
(Senior)
Remittance Rate: 2.500%
Cut-off Date: as defined in the
Pooling and Servicing Agreement Denomination:
dated as of December 1, 2001
Aggregate Original Notional Principal Amount
First Remittance Date: of all Class A-IO Certificates: $95,000,000
January 1, 2002
Maturity Date: September 1, 2033
Servicer: (or if such day is not a
Conseco Finance Corp. Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-4, CLASS A-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 AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original notional principal amount set
forth above in Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificate Trust 2001-4 (the "Trust"), which includes among its assets a pool
of manufactured housing installment sale contracts and installment loan
agreements (including, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date. The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of December 1, 2001, among
Conseco Finance Corp., as Originator and Servicer (the "Originator"), Conseco
Finance Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). 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
A-2-1
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 first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in January 2002, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
Class A-IO Certificates with an aggregate Percentage Interest of at least 5% and
so desires, by wire transfer pursuant to instructions delivered to the Trustee
at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the portion of the Class A
Distribution Amount to be distributed to the Class A-IO Certificates. The
Maturity Date of this Certificate is September 1, 2033 or the next succeeding
Business Day if such September 1, 2033 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST-ONLY CERTIFICATE. THE HOLDER OF THE
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.
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
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 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 Issuer 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
A-2-2
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.
The Originator, the Seller, the 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 Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-2-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-4 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated:_______________
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATE
TRUST 2001-4
By U.S. BANK NATIONAL ASSOCIATION
By
---------------------------------------------
Authorized Signatory
A-2-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate 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.
Date: _______________
By
---------------------------------------------
Signature
A-2-5
EXHIBIT B
FORM OF CLASS M-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND THE CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] No.
(Subordinate)
Remittance Rate: [Rate equal to the lesser of
Cut-off Date: as defined in the (i) 8.59% and (ii) the Adjusted Net WAC Cap
Pooling and Servicing Agreement dated Rate] [A Floating Rate equal to the least of
as of December 1, 2001 (i) One-Month LIBOR plus 1.75%, (ii) the
Adjusted Net WAC Cap Rate, and 15.00% per annum]
First Remittance Date:
January 1, 2002 Denomination: $1,000
Servicer: Aggregate Denomination of
Conseco Finance Corp. All Class M-[1][2]
Certificates: $__________
Maturity Date: _________________
(or if such day is not a Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-4, CLASS M-[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 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 Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2001-4 (the "Trust"), which
B-1
includes among its assets a pool of manufactured housing installment sale
contracts and installment loan agreements (including, without limitation, all
related security interests and any and all rights to receive payments which are
due pursuant thereto after the applicable Cut-off Date). The Trust has been
created pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated
as of December 1, 2001 among Conseco Finance Corp., as Originator and Servicer
(the "Originator"), Conseco Finance Securitizations Corp., as Seller (the
"Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). 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 first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in January 2002, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class M-[1][2] Certificate with an aggregate Percentage Interest of at least
5% and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [M-1/M-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is
____________________________ or the next succeeding Business Day if such
_____________________ 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 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
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 Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
B-2
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer 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.
The Originator, the Seller, the 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 Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-4 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: _____________
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATE
TRUST 2001-4
By U.S. BANK NATIONAL ASSOCIATION
By
---------------------------------------------
Authorized Signatory
B-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate 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
---------------------------------------------
Authorized Signatory
B-5
EXHIBIT C-1
FORM OF CLASS B-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE Class A
CERTIFICATES, THE CLASS M-1 CERTIFICATES [,] [AND] THE CLASS M-2 CERTIFICATES
[AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN 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.]
[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.]
Class B-[1][2] No.
(Subordinate)
Remittance Rate: Rate equal to the lesser of (i) ____%
Cut-off Date: as defined in the Pooling and (ii) the Adjusted Net WAC Cap Rate
and Servicing Agreement dated as of
December 1, 2001 Denomination: $1,000
Aggregate Denomination of All Class B-[1][2]
First Remittance Date:
January 1, 2002 Certificates: $___________
Servicer: Maturity Date: ____________________
Conseco Finance Corp. (or if such day is not a Business Day, then the next
succeeding Business Day)
CUSIP: _____
C-1-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-4, CLASS B-[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 AGREEMENT.
This certifies that _______________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificate Trust 2001-4 (the "Trust"), which includes among its assets a pool
of manufactured housing installment sale contracts and installment loan
agreements (including, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of December 1, 2001, among
Conseco Finance Corp., as Originator and Servicer (the "Originator"), Conseco
Finance Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). 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 first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in January 2002 so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class of Class B Certificates with an aggregate Percentage Interest of at
least 5% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [B-1/B-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is
___________________________, or the next succeeding Business Day if such
__________________ 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 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
C-1-2
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
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 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 Issuer 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.]
The Originator, the Seller, the 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 Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
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IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-4 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated:________________
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATE
TRUST 2001-4
By U.S. BANK NATIONAL ASSOCIATION
By
---------------------------------------------
Authorized Signatory
C-1-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate 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-1-5
EXHIBIT C-2
FORM OF CLASS B-3I 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 IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B 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.
Class B-3I No._____
(Subordinate)
Percentage Interest: _____%
Cut-off Date: as defined in the Pooling
and Servicing Agreement dated as of Maturity Date: ___________________
December 1, 2001 (or if such day is not a Business Day, then the next
succeeding Business Day)
First Remittance Date:
January 1, 2002
Servicer:
Conseco Finance Corp.
C-2-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-4, CLASS B-3I (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 AGREEMENT.
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the undivided Percentage Interest set forth above in Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificate Trust 2001-4 (the "Trust"),
which includes among its assets a pool of manufactured housing installment sale
contracts and installment loan agreements (including, without limitation, all
related security interests and any and all rights to receive payments which are
due pursuant thereto after the applicable Cut-off Date). The Trust has been
created pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated
as of December 1, 2001, among Conseco Finance Corp., as Originator and Servicer
(the "Originator"), Conseco Finance Securitizations Corp., as Seller (the
"Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). 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 first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each related Due Period commencing in January 2002 so long
as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-3I Certificates with an aggregate Percentage
Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the Class B-3I Distribution Amount for such Remittance Date. The
Maturity Date of this Certificate is ___________________ or the next succeeding
Business Day if such _______________ is not a Business Day.
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 CONTRACTS.
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.
C-2-2
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
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 Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
The Originator, the Seller, the 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 Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
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IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-4 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated:_______________
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATE
TRUST 2001-4
By U.S. BANK NATIONAL ASSOCIATION
By
---------------------------------------------
Authorized Signatory
C-2-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate 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-2-5
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of December 1, 2001 among Conseco Finance Corp., as Originator and
Servicer (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller") and U.S. Bank National Association, as Trustee (the "Trustee"),
the Seller does hereby transfer, assign, set over and otherwise convey to the
Trustee (i) all the right, title and interest of the Seller in and to the
Contracts, including, without limitation, all right, title and interest in and
to the Collateral Security and all rights to receive payments on or with respect
to the Contracts (other than principal and interest due on the Contracts on or
before the applicable Cut-off Date), (ii) all rights under every Hazard
Insurance Policy relating to a Manufactured Home securing a Contract for the
benefit of the owner of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any Contract that is an FHA/VA Contract, (iv) the
proceeds from the Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (v) all documents contained in the Contract Files and the
Land-and-Home Contract Files relating to the Contracts, (vi) an amount equal to
the difference between the aggregate Cut-off Date Principal Balances of the
Staged-Funding Contracts and the principal balance of the Staged-Funding
Contracts as of the Closing Date paid by the underwriters of the Certificates to
the Trust by order of the Originator out of the proceeds of the sale of the
Certificates, (vii) amounts on deposit in the Pre-Funding Account, the Basis
Risk Reserve Fund and the Yield Maintenance Reserve Fund, (viii) all rights
under the Yield Maintenance Agreement, and (ix) all proceeds and products in any
way derived from any of the foregoing. Capitalized terms used herein but not
defined herein have the meanings assigned to them in the Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this ___ day of December, 2001.
CONSECO FINANCE SECURITIZATIONS
CORP.
By:
--------------------------------------------
[Name]
[Title]
D-1
EXHIBIT E
FORM OF CERTIFICATE OF OFFICER
[CONSECO FINANCE CORP.]
[CONSECO FINANCE SECURITIZATIONS CORP.]
OFFICER'S CERTIFICATE
We, ______________ and ______________, hereby certify that we are the duly
elected _________________ and ______________, respectively, of [Conseco Finance
Corp. ("Conseco Finance")] [Conseco Finance Securitizations Corp. ("Conseco
Securitizations")], and that as such we are duly authorized to execute and
deliver this Certificate on behalf of [Conseco Finance] [Conseco
Securitizations] in connection with the Pooling and Servicing Agreement, dated
as of December 1, 2001 (the "Pooling and Servicing Agreement") among Conseco
Finance Corp., Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee, and the Underwriting Agreement relating to the Class A,
Class M-1, Class M-2 and Class B-1 Certificates, dated _______________, 2001,
(the "Underwriting Agreement"), among Conseco Finance Corp., Conseco Finance
Securitizations Corp. and Xxxxxx Brothers Inc., Credit Suisse First Boston
Corporation, Deutsche Banc Alex. Xxxxx Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated (the "Underwriters") (all capitalized terms used herein
without definition having the respective meanings specified in the Pooling and
Servicing Agreement and the Underwriting Agreement) and further certify as
follows:
(1) Attached hereto as Exhibits I and II, respectively, are true and
correct copies of the [Certificate] [Articles] of Incorporation and
[Restated] Bylaws of [Conseco Finance] [Conseco Securitizations],
together with all amendments thereto, both of which are in full force
and effect on the date hereof.
(2) No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of [Conseco Finance] [Conseco Securitizations] are pending
or contemplated.
(3) There is no litigation pending, or to our knowledge, threatened,
which, if determined adversely to [Conseco Finance] [Conseco
Securitizations], would affect adversely the sale of the Contracts,
the execution, delivery or enforceability of the Pooling and Servicing
Agreement, the Transfer Agreement and the Underwriting Agreement (the
"Transaction Documents")[, or the ability of Conseco Finance to
service and administer the Contracts in accordance with the terms of
the Pooling and Servicing Agreement].
(4) Each person who, as an officer or representative of [Conseco Finance]
[Conseco Securitizations], signed the Transaction Documents, or any
other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Contracts in accordance
with the Transaction Documents, was at the time of such signing and is
as of the date hereof duly elected or appointed,
E-1
qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their
genuine signatures.
(5) Neither the execution and delivery by [Conseco Finance] [Conseco
Securitizations] of the Transaction Documents, nor its compliance with
the terms and provisions thereof, will conflict with, or result in a
breach of, any of the terms of, or constitute a default under, any
judgment, order, injunction or decree of any domestic court or
governmental authority to which [Conseco Finance] [Conseco
Securitizations] is subject or any indenture, agreement, contract or
commitment to which [Conseco Finance] [Conseco Securitizations] is a
party or by which it is bound, which conflict, breach or default
presents a reasonable possibility of having a materially adverse
effect on the business or operations of [Conseco Finance] [Conseco
Securitizations]. No UCC-1 financing statements or statements of
assignment listing [Conseco Finance] [Conseco Securitizations] as
debtor and describing any of the Contracts as collateral other than
the UCC-1 financing statement in favor of the Trustee, have been
signed on behalf of [Conseco Finance] [Conseco Securitizations] and
filed by any person after ______________ and prior to the date hereof.
(6) Attached hereto as Exhibit IV is a certified true copy of the
resolutions of the Board of Directors of [Conseco Finance] [Conseco
Securitizations] (the "Resolutions") adopted with respect to the
authorization of [Conseco Finance] [Conseco Securitizations] to take
such actions and enter into such agreements as are necessary to sell
and service the Contracts in accordance with the Transaction
Documents; said resolutions have not been amended, modified, annulled
or revoked and are in full force and effect on the date hereof.
(7) [The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did comply, and as of the date
hereof comply, in all material respects with the requirements of the
Securities Act of 1933, as amended (the "1933 Act") and the
Regulations. The Registration Statement, at the time it became
effective did not, and as of the date hereof does not, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus as of the date thereof did
not, and as of the date hereof does not, contain any untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
the representations and warranties in this subsection shall not apply
to statements in, or omissions from, the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to [Conseco Finance] [Conseco Securitizations] in writing by
the Underwriters expressly for use in the Registration Statement or
Prospectus. The conditions to the use by [Conseco Finance] [Conseco
Securitizations] of registration statement on Form S-3 under the 1933
Act, as set forth in the General Instructions to Form S-3, have been
satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of [Conseco Finance]
[Conseco Securitizations] which
E-2
are required to be filed as exhibits to the Registration Statement
pursuant to the 1933 Act or the Regulations which have not been so
filed.]
(8) Each of the representations and warranties contained in [Sections 3.01
and 3.03 of the Pooling and Servicing Agreement] [Section 3.1 (other
than Section 3.1(a)) of the Transfer Agreement] and Section 1 of the
Underwriting Agreement is true and correct on and as of the date
hereof. [To the best of our knowledge, the representations and
warranties of Conseco Finance contained in Section 3.01(a) of the
Transfer Agreement are true and correct on the date hereof.]
(9) [Conseco Finance] [Conseco Securitizations] has complied with all the
agreements by which it is bound in connection with the transactions
contemplated by the Transaction Documents, and has satisfied all the
conditions on its part to be performed or satisfied prior to the
Closing Date in connection with the transactions contemplated by the
Transaction Documents.
(10) The Transaction Documents have been duly executed by [Conseco Finance]
[Conseco Securitizations] pursuant to and in compliance with the
Resolutions.
(11) No event with respect to [Conseco Finance] [Conseco Securitizations]
has occurred or 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 Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
December, 2001.
[CONSECO FINANCE CORP.]
By:
--------------------------------------------
[Name]
[Title]
[CONSECO FINANCE SECURITIZATIONS CORP.]
By:
--------------------------------------------
[Name]
[Title]
E-3
EXHIBIT F
FORM OF OPINION OF COUNSEL
The opinion of Xxxxxx & Xxxxxxx LLP shall be to the effect that undefined
capitalized terms have the meanings set forth in the Pooling and Servicing
Agreement):
(1) 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 Transfer Agreement and the
Underwriting Agreement (collectively, the "Transaction Documents")
(including the Limited Guaranty contained in the Pooling and Servicing
Agreement). The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Minnesota, with corporate power to execute, deliver and perform in its
obligations under the Transaction Documents.
(2) The Transaction Documents have been duly authorized by all requisite
corporate action, duly executed and delivered by the Originator and
the Seller, and constitute the valid and binding obligations of the
Originator and the Seller enforceable in accordance with their 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.
(3) 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 or the Seller for the consummation of the transactions
contemplated by the Transaction Documents, 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.
(4) 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.
(5) Neither the transfer of the Contracts by the Originator to the Seller,
nor the assignment of the Originator's security interest on the
related Manufactured Homes, nor the issuance or sale of the
Certificates, nor the execution and delivery of the Transaction
Documents, nor the consummation of any other of the transactions
contemplated in the Transaction Documents nor the fulfillment of the
terms of the Certificates or the Transaction Documents 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 Certificate of Incorporation or Bylaws of the Originator or of
any indenture or other agreement or instrument known to
F-1
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.
(6) Neither the transfer of the Contracts by the Seller to the Trustee
acting on behalf of the Trust, nor the assignment of the Seller's
security interest on the related Manufactured Homes, nor the issuance
or sale of the Certificates, nor the execution and delivery of the
Transaction Documents, nor the consummation of any other of the
transactions contemplated in the Transaction Documents, nor the
fulfillment of the terms of the Certificates or the Transaction
Documents by the Seller, will conflict with, or result in a breach,
violation or acceleration of, or constitute a default under, any term
or provision of the Articles of Incorporation or Bylaws of the Seller
or of any indenture or other agreement or instrument known to us to
which the Seller 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 Seller, of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it.
(7) 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 or the Seller before any court, administrative
agency or other tribunal (A) asserting the invalidity of the
Transaction Documents, the Certificates, the hazard or flood insurance
policies applicable to any Contracts or the Errors and Omissions
Protection Policy, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) which is likely
materially and adversely to affect the performance by the Originator
or the Seller of its obligations under, or the validity or
enforceability of, the Transaction Documents or the Certificates, or
(D) seeking adversely to affect the federal income tax attributes of
the Certificates described in the Prospectus and the Prospectus
Supplement under the heading "Federal Income Tax Consequences."
(8) The transfer of the Initial and Additional Contracts 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. (S) 547), as in effect on
the date hereof, in the event that the Originator became a debtor
under the United States Bankruptcy Code.
(9) Pursuant to the Transfer Agreement the Originator has transferred to
the Seller all of the Originator's right, title and interest in the
Contracts, 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
Seller in and to such Contracts, and has delivered the Land-and-Home
Contract Files and the Contract Files to the Trustee (as the Seller's
designee) 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 Delaware identifying the
F-2
Contracts as collateral and naming the Originator as debtor and the
Seller as secured party, and the filing of continuation statements as
required by the Transfer Agreement, is necessary to perfect as against
third parties the assignment of the Contracts by the Originator to the
Seller. 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 recharacterized as a pledge securing a loan from the Seller to
the Originator, it is our opinion that the Seller would be deemed to
have a valid and perfected security interest in the Initial and
Additional Contracts 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.
(S)336.9-301(3)) who becomes such after the Closing Date, except that
a subsequent purchaser of any Contract who gives new value and takes
possession thereof in the ordinary course of his business would have
priority over the Seller's security interest in such Contracts, if
such purchaser acts without knowledge that such Contract 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
Land-and- Home Contract Files for the purpose of perfecting the
assignment to the Seller of the Contracts. We express no opinion with
respect to the enforceability of any individual Contract or the
existence of any claims, rights or other matters in favor of any
Obligor.
(10) Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the
Seller's right, title and interest in the Contracts, 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 Contracts, and has
delivered the Land-and-Home Contract Files and the Contract 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 Contracts as
collateral and naming the Seller as debtor and the Trustee as secured
party, and the filing of continuation statements as required by the
Pooling and Servicing Agreement, is necessary to perfect as against
third parties the assignment of the Contracts by the Seller to the
Trustee. 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 Seller became a debtor under the United
States Bankruptcy Code. However, in the event such assignment were
recharacterized as a pledge securing a loan from the
Certificateholders to the Seller, it is our opinion that the Trustee
would be deemed to have a valid and perfected security interest in the
Contracts 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. (S)336.9-301(3))
who becomes such after the Closing Date, except that a subsequent
purchaser of any Contract, who gives new value and takes possession
thereof in the ordinary
F-3
course of his business would have priority over the Trustee's security
interest in such Contract, 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 Land-and- Home Contract Files for the purpose of
perfecting the assignment to the Trustee of the Contracts. We express
no opinion with respect to the enforceability of any individual
Contract or the existence of any claims, rights or other matters in
favor of any Obligor.
(11) 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 each of the
Master REMIC, Intermediate REMIC and Subsidiary REMIC of a proper
election to be taxed as a REMIC, as of the date hereof each of the
Master REMIC, Intermediate REMIC and Subsidiary REMIC created pursuant
to the Pooling and Servicing Agreement will qualify as a REMIC.
Further, the Regular Certificates will evidence ownership of the
"regular interests" in the Master REMIC and the Class C Master
Certificate, Class C Intermediate Certificate and Class C Subsidiary
Certificate will evidence ownership of the single class of "residual
interest" in the Master REMIC, Intermediate REMIC and Subsidiary REMIC
respectively. For Minnesota income and franchise 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 Fund, the Basis Risk Reserve Fund, the Staged-Funding Contract
Reserve Account 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 and franchise 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.
(12) The transfer of the Initial and Additional Contracts and the proceeds
thereof by the Originator to the Seller on the date hereof pursuant to
the Transfer 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. (S)(S) 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. (S) 548) as in effect on the
date hereof.
(13) The transfer of the Initial and Additional Contracts and the proceeds
thereof by the Seller 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. (S)(S) 513.41
through 513.51), nor, should the Seller 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. (S)(S) 548) as in
effect on the date hereof.
F-4
EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGEMENT
U.S. Bank National Association, a national banking association, acting as
trustee (the "Trustee") of the trust created pursuant to the Pooling and
Servicing Agreement, dated as of December 1, 2001, among Conseco Finance Corp.
(the "Originator"), Conseco Finance Securitizations Corp. (the "Seller") and the
Trustee (the "Pooling and Servicing Agreement") (all capitalized terms used
herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement), acknowledges, pursuant to Section 2.03 of the
Pooling and Servicing Agreement, that the Trustee has received and holds in
trust thereunder the following (i) all right, title and interest in and to the
manufactured housing contracts identified on the List of Contracts [delivered
pursuant to Section 2.02(i) of the Pooling and Servicing Agreement] [delivered
with the Subsequent Transfer Instrument of even date herewith] (the
"Contracts"), including, without limitation, all right, title and interest in
and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than the principal and interest due on the
Contracts on or before the applicable Cut-off Date), (ii) all rights under every
Hazard Insurance Policy relating to a Manufactured Home securing a Contract for
the benefit of the creditor of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any FHA/VA Contract, (iv) the proceeds from the Errors
and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Manufactured Homes, (v) all
documents contained in the Contract Files and the Land-and-Home Contract Files
relating to the Contracts, (vi) an amount equal to the difference between the
aggregate Cut-off Date Principal Balances of the Staged-Funding Contracts and
the principal balance of the Staged-Funding Contracts as of the Closing Date
paid by the underwriters of the Certificates to the Trust by order of the
Originator out of the proceeds of the sale of the Certificates, (vii) amounts on
deposit in the Pre-Funding Account, the Basis Risk Reserve Fund and the Yield
Maintenance Reserve Fund, (viii) all rights under the Yield Maintenance
Agreement, and (ix) all proceeds and products in any way derived from any of the
foregoing.
The Trustee further acknowledges that the Trustee, directly or through a
custodian, will hold said rights, interests and proceeds in trust for the use
and benefit of all Certificateholders.
G-1
IN WITNESS WHEREOF, U.S. Bank National Association, as Trustee, has caused
this acknowledgment to be executed by its duly authorized officer as of the ___
day of December, 2001.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------------
[Name]
[Title]
G-2
EXHIBIT H-1
FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
LAND-AND-HOME CONTRACT FILES
U.S. Bank Trust National Association, a national banking association (the
"Custodian") acting as Custodian under a Custodial Agreement (the "Custodial
Agreement") dated as of December 1, 2001, between the Custodian and U.S. Bank
National Association, as Trustee (the "Trustee") under the Pooling and Servicing
Agreement dated as of December 1, 2001 among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and the Trustee, pursuant to which the
Custodian holds on behalf of the Trustee certain "Land-and-Home Contract Files,"
as described in the Pooling and Servicing Agreement, hereby acknowledges receipt
of such Land-and-Home Contract Files, except as noted on the exception list
attached hereto. The Custodian further acknowledges that it will, within 90
days of the date of the Custodial Agreement, conduct a review of the Land-and-
Home Contract Files and confirm to the Trustee and the Originator that each
Land-and-Home Contract File includes (a) an original executed copy of the Land-
and-Home Contract (or an executed lost note affidavit, together with a copy of
the note), (b) an original or a copy of the related Mortgage, (c) an assignment
of the Land-and-Home Contract and the related Mortgage from the originator (if
other than the Originator) to the Originator, (d) an endorsement of the Land-
and-Home Contract by the Originator to the Trustee or in blank, (e) an
assignment of the related Mortgage to the Trustee or in blank, and (f) any
extension, modification or waiver agreement(s), except as noted on the document
exception listing to be attached to such confirmation. The Custodian will not
otherwise review the Land-and-Home Contracts and Land-and-Home Contract Files
for compliance with the terms of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused this
acknowledgment to be executed by its duly authorized officer as of the ___ day
of December, 2001.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By:
--------------------------------------------
[Name]
[Title]
X-0-0
XXXXXXX X-0
FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
CONTRACT FILES
U.S. Bank Trust National Association, a national banking association (the
"Custodian") acting as Custodian under a Custodial Agreement (the "Custodial
Agreement") dated as of December 1, 2001, between the Custodian and U.S. Bank
National Association, as Trustee (the "Trustee") under the Pooling and Servicing
Agreement dated as of December 1, 2001 among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and the Trustee, pursuant to which the
Custodian holds on behalf of the Trustee certain "Contract Files," as described
in the Pooling and Servicing Agreement, hereby acknowledges receipt of such
Contract Files, except as noted on the exception list attached hereto. The
Custodian further acknowledges that it will, within 90 days of the date of the
Custodial Agreement, conduct a review of the Contract Files and confirm to the
Trustee and the Originator that each Contract File includes (a) an original
executed copy of the Contract (or an executed lost note affidavit, together with
a copy of the note), (b) either: (i) the original title document for the
related Manufactured Home or a duplicate certified by the appropriate
governmental authority which issued the original thereof or the application for
such title document, or (ii) if the laws of the jurisdiction in which the
related Manufactured Home is located do not provide for the issuance of title
documents for manufactured housing, other evidence of ownership of the related
Manufactured Home which is customarily relied upon in such jurisdiction as
evidence of title to a manufactured housing unit, (c) evidence of one or more of
the following types of perfection of the security interest in the related
Manufactured Home granted by such Contract, as appropriate: (i) notation of
such security interest on the title document, (ii) a financing statement meeting
the requirements of the UCC, with evidence of recording indicated thereon, or
(iii) such other evidence of perfection of a security interest in a manufactured
housing unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located, (d) the assignment of the Contract from
the originator (if other than Conseco Finance Corp.) to the Originator, (e)
evidence of any other Collateral Security, including with respect to a Land-in-
Lieu Contract, the mortgage or deed of trust, and (f) any extension,
modification or waiver agreement(s), except as noted on the document exception
listing to be attached to such confirmation. The Custodian will not otherwise
review the Contracts and Contract Files for compliance with the terms of the
Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused this
acknowledgment to be executed by its duly authorized officer as of the ___ day
of December, 2001.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By:
--------------------------------------------
[Name]
[Title]
H-2-1
EXHIBIT I
FORM OF CERTIFICATE OF SERVICING OFFICER
CONSECO FINANCE CORP.
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such he is 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 December 1, 2001 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
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
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 the ___ day of
_________, ____.
CONSECO FINANCE CORP.
By:
--------------------------------------------
[Name]
[Title]
I-1
EXHIBIT J
FORM OF CLASS C [SUBSIDIARY]
[INTERMEDIATE] [MASTER] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE [UNCERTIFICATED
SUBSIDIARY INTERESTS] [UNCERTIFICATED INTERMEDIATE INTERESTS] [REGULAR
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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN); ANY SUCH TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION
9.02 OF SUCH POOLING AND SERVICING AGREEMENT.
Class C Subsidiary No.
[(Subordinate)] [(Intermediate)] [(Master)]
Cut-off Date: as defined in the Pooling Percentage Interest: 100%
and Servicing Agreement dated as of
December 1, 2001
First Remittance Date:
January 1, 2002
J-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-4 CLASS C [SUBSIDIARY]
[INTERMEDIATE] [MASTER] (RESIDUAL INTEREST)
Cut-off Date Pool Principal Balance: $475,000,000.00 (Approximate)
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 Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-4 (the "Trust"), which includes among its assets
a pool of manufactured housing installment sale contracts and installment loan
agreements (including, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date) (the "Contracts"). The Trust has been created pursuant
to a Pooling and Servicing Agreement (the "Agreement"), dated as of December 1,
2001, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Class C [Subsidiary] [Intermediate] [Master] Certificate is one of the
Class C [Subsidiary] [Intermediate] [Master] Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Class C [Subsidiary] [Intermediate] [Master] 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 first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in January 2002, so long as the
Agreement has not been terminated, by check (or, if such Class C [Subsidiary]
[Intermediate] [Master] Certificateholder holds Class C [Subsidiary]
[Intermediate] [Master] Certificates with an aggregate Percentage Interest of at
least 20% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least ten days prior to such Remittance Date) to the registered
Class C [Subsidiary] [Intermediate] [Master] Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C [Subsidiary]
[Intermediate] [Master] Distribution Amount.
The Class C [Subsidiary] [Intermediate] [Master] 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 C
[Subsidiary] [Intermediate] [Master] Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Class C [Subsidiary] [Intermediate] [Master]
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 Class C [Subsidiary] [Intermediate] [Master] 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,
J-2
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Class C 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 C [Subsidiary] [Intermediate] [Master]
Certificate is registrable in the Certificate Register of the Certificate
Registrar upon surrender of this Class C [Subsidiary] [Intermediate] [Master]
Certificate for registration of transfer at the office or agency maintained by
the Trustee in 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 Class C [Subsidiary] [Intermediate]
[Master] Certificates evidencing the same aggregate amount of Class C
[Subsidiary] [Intermediate] [Master] Certificates will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, this Class C [Subsidiary] [Intermediate] [Master] Certificate is
exchangeable for new Class C [Subsidiary] [Intermediate] [Master] Certificates
of authorized denominations evidencing the same aggregate Percentage Interest as
requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C [Subsidiary] [Intermediate] [Master] Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
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 C [Subsidiary] [Intermediate] [Master]
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 [Subsidiary]
[Intermediate] [Master] REMIC elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The [Uncertificated Subsidiary Interests]
[Uncertificated Intermediate Interests] [Regular Certificates] shall be "regular
interests" in the [Subsidiary] [Intermediate] [Master] REMIC and the Class C
[Subsidiary] [Intermediate] [Master] Certificates shall be the "residual
interest" in the [Subsidiary] [Intermediate] [Master] REMIC. In addition, the
holder of this Class C [Subsidiary] [Intermediate] [Master] 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 [Subsidiary]
[Intermediate] [Master] REMIC, and (ii) agrees to cooperate with the Originator
in connection with examinations of the [Subsidiary] [Intermediate] [Master]
REMIC'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.
J-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-4 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: _________________
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATE
TRUST 2001-4
By U.S. BANK NATIONAL ASSOCIATION
By
---------------------------------------------
Authorized Signatory
J-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate, 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
J-5
EXHIBIT K-1
FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 3.06 of the Pooling and Servicing Agreement (the "Agreement"), dated as
of December 1, 2001 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
(1) The Contracts 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 Contracts, such
Contracts may, pursuant to Section 3.06 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]
K-1-1
EXHIBIT K-2
FORM OF CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
The undersigned certify that they are [title] and [title], respectively of
Conseco Finance Corp., a corporation organized under the laws of Delaware ("the
Company"), and that as such they are duly authorized to execute and deliver this
certificate on behalf of the Company pursuant to Section 3.06(b) of the Pooling
and Servicing Agreement (the "Agreement"), dated as of December 1, 2001 among
the Company, Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further certify
that:
(1) The Contract and Contract File [or Land-and-Home Contract File, as
applicable] for each such Eligible Substitute Contract [are being held
by the Company, as Servicer] have been delivered to [the Trustee or
its Custodian] [_________, the successor Servicer].
(2) The Contracts on the attached schedule are to be substituted on the
date hereof pursuant to Section 3.06(b) of the Agreement and each such
Contract is an Eligible Substitute Contract [description how the
Contracts satisfy the definition of "Eligible Substitute Contract"].
(3) The UCC-1 financing statements in respect of the Contracts to be
substituted, in the form required by Section 3.06 (b)(iii) of the
Agreement, have been filed with the appropriate offices.
(4)(x) the Company shall have delivered to the Trustee, or its Custodian,
the related Land-and-Home Contract Files; and (y) the Company has
delivered to the Trustee an opinion of counsel satisfactory to the
Trustee to the effect that the Trustee holds a perfected first
priority lien in the real estate securing such Eligible Substitute
Contracts, or evidence of recordation of the assignment to the Trustee
on behalf of the Trust of each Mortgage securing such Eligible
Contracts.
(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 Contract exceeds the Scheduled
Principal Balance of each Contract being substituted therefor.
K-2-1
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ___ day of
___________.
CONSECO FINANCE CORP.
By:
--------------------------------------------
[Name]
[Title]
K-2-2
EXHIBIT L
FORM OF REPRESENTATION LETTER
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Conseco Finance Securitizations Corp.
300 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
RE: Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-4, Class [B-2/B-3I/C Subsidiary/C
Intermediate/C Master]
[The undersigned purchaser (the "Purchaser") understands that the purchase
of the above-referenced certificates (the "Certificates") may be made only by
institutions which are "Accredited Investors" under Regulation D, as promulgated
under the Securities Act of 1933, as amended (the "1933 Act"), which includes
banks, savings and loan associations, registered brokers and dealers, insurance
companies, investment companies, and organizations described in Section
501(c)(3) of the Internal Revenue Code, corporations, business trusts and
partnerships, not formed for the specific purpose of acquiring the Certificates
offered, with total assets in excess of $5,000,000. The undersigned represents
on behalf of the Purchaser that the Purchaser is an "Accredited Investor" within
the meaning of such definition. 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 [underwriter
of the Class B-2/B-3I/Class C Subsidiary/Class C Intermediate/Class C Master
Certificate] 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 Section 4(2) of the 1933 Act is available to it.
(1) 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.
(2) The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the
Certificates.
L-1
(3) [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 dated December 5, 2001 and
related Prospectus Supplement dated December 13, 2001, with respect to
the Certificates, and has been given such information concerning the
Certificates, the underlying installment sale contracts and Conseco
Finance Securitizations Corp. as it has requested.]
(4) [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] [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 (except for a resale
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "1933 Act") or Regulation S under the 1933 Act), subject
nevertheless to any requirement of law that the disposition of the
Purchaser's property shall at all time be and remain within its
control.]
(5) The Purchaser does not qualify as (i) an employee benefit plan (a
"Plan") as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), whether or not it is
subject to the provisions of Title I of ERISA, (ii) a plan described
in Section 4975(e)(1) of the Internal Revenue Code of 1986 (also a
"Plan"), or (iii) an entity whose underlying assets are deemed to be
assets of a Plan by reason of such Plan's investment in the entity (as
determined under Department of Labor Regulations, 29 C.F.R. (S)2510.3-
101 (1990)).
(6) 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.
(7) The Purchaser, as holder of the Class [B-2/B-3I/C Subsidiary/ C
Intermediate/C Master] Certificate, 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 Class B-
3I/C Subsidiary/C Intermediate/C Master Certificate as they become
due.
(8) 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 7 and in
this paragraph 8.
L-2
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.
L-3
Executed at ____________________, __________, this _____ day of
_________________.
Purchaser's Name (Print)
By:
--------------------------------------------
Signature
Its:
-------------------------------------------
Address of Purchaser:
-------------------------
-----------------------------------------
Purchaser's Taxpayer Identification Number
-----------------------------------------
L-4
EXHIBIT M
FORM OF MONTHLY REPORT
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-4
Distribution Date: ________________
1. General
(a) Amount Available (including Monthly Servicing Fee)
----------
(b) Class M-1 Interest Deficiency Amount (if any), Class M-2 Interest
Deficiency Amount(if any) and Class B-1 Interest Deficiency Amount (if any)
withdrawn for prior Remittance Date
----------
(c) Amount Available after giving effect to withdrawal of Class M-1 Interest
Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1
Interest Deficiency Amount for prior Remittance Date
----------
(d) Amount withdrawn from [Pre-Funding] [Staged-Funding Contract Reserve]
Account
----------
(e) Cap Provider Fee
----------
Interest
---------
Class A and Class A-IO Certificates
-----------------------------------
2. Aggregate Class A and Class A-IO interest
(a) Interest accrued at Class A-1 Remittance Rate (3.22%)
----------
(b) Class A-1 Interest paid
----------
(c) Interest accrued at Class A-2 Remittance Rate (5.15%)
----------
(d) Class A-2 Interest paid
----------
(e) Interest accrued at Class A-3 Remittance Rate (6.09%)
----------
(f) Class A-3 Interest paid
----------
(g) Interest accrued at Class A-4 Remittance Rate (7.36%, or the Adjusted Net
WAC Cap Rate, if less)
----------
(h) Class A-4 Interest paid
----------
(i) Class A Interest Shortfall
----------
(j) Interest accrued at Class A-IO Remittance Rate (2.50%)
----------
M-1
(k) Class A-IO Interest paid
----------
(l) Class A Interest Shortfall
----------
3. Amount applied to Unpaid Class A/Class/Class A-IO Interest Shortfall
(a) Class A-1
----------
(b) Class A-2
----------
(c) Class A-3
----------
(d) Class A-4
----------
(e) Class A-IO
----------
4. Remaining Unpaid Class A Interest Shortfall
----------
Class M-1 Certificates
----------------------
5. Class M-1 Interest on Class M-1 Adjusted Principal Balance
(a) Class M-1 Adjusted Principal Balance
----------
(b) Interest accrued at Class M-1 Remittance Rate (least of LIBOR plus 1.75%,
or the Adjusted Net WAC Cap Rate, or 15.00%)
----------
(c) Interest paid on Class M-1 Adjusted Principal Balance
----------
(d) Class M-1 Interest Shortfall
----------
6. Amount applied to Unpaid Class M-1 Interest Shortfall
----------
7. Remaining Unpaid Class M-1 Interest Shortfall
----------
8. Class M-1 Basis Risk Carryover Shortfall
----------
9. Class M-1 Basis Risk Reserve Shortfall
----------
10. Unpaid Class M-1 Basis Risk Carryover Shortfall
Class M-2 Certificates
----------------------
11. Class M-2 Interest on Class M-2 Adjusted Principal Balance
(a) Class M-2 Adjusted Principal Balance
----------
(b) Interest accrued at Class M-2 Remittance Rate (8.59%, or the Adjusted Net
WAC Cap Rate, if less)
----------
(c) Interest paid on Class M-2 Adjusted Principal Balance
----------
(d) Class M-2 Interest Shortfall
----------
M-2
12. Amount applied to Unpaid Class M-2 Interest Shortfall
----------
13. Remaining Unpaid Class M-2 Interest Shortfall
----------
Class B-1 Certificates
----------------------
14. Class B-1 interest on Class B-1 Adjusted Principal Balance
(a) Class B-1 Adjusted Principal Balance
----------
(b) Interest accrued at Class B-1 Remittance Rate (9.40%, or the Adjusted Net
WAC Cap Rate, if less)
----------
(c) Interest paid on Class B-1 Adjusted Principal Balance
----------
(d) Class B-1 Interest Shortfall
----------
15. Amount applied to Unpaid Class B-1 Interest Shortfall
----------
16. Remaining Unpaid Class B-1 Interest Shortfall
----------
Principal
---------
17. Formula Principal Distribution Amount:
(a) Scheduled principal
----------
(b) Principal Prepayments
----------
(c) Liquidated Contracts
----------
(d) Repurchases
----------
(e) Plus principal received during the first 10 days of the next Due Period
----------
(f) Minus principal received during the first 10 days of the prior Due Period
----------
(g) Pre-Funded Amount/Unfunded Contract Shortfall
----------
18. Pool Scheduled Principal Balance
----------
19. Overcollateralization Amount (before principal distributions)
----------
20. Additional Principal Distribution Amount (if any, from and after Third
Remittance Date)
----------
Class A Certificates
--------------------
21. Unpaid Class A Principal Shortfall (if any) following prior Remittance Date
(a) Class A-1
----------
M-3
(b) Class A-2
----------
(c) Class A-3
----------
(d) Class A-4
----------
22. Class A Percentage for such Remittance Date
----------
23. Class A Percentage for the following Remittance Date
----------
24. Class A principal distribution (including Class A Percentage of Formula
Principal Distribution Amount, Unpaid Class A Principal Shortfall and any
Additional Principal Distribution Amount paid)
(a) Class A-1
----------
(b) Class A-2
----------
(c) Class A-3
----------
(d) Class A-4
----------
25. Remaining Class A Principal Balance/Class A-IO Notional Principal Amount
(a) Class A-1 Principal Balance
----------
(b) Class A-2 Principal Balance
----------
(c) Class A-3 Principal Balance
----------
(d) Class A-4 Principal Balance
----------
(e) Class A-IO Notional Principal Amount
----------
26. Unpaid Class A Principal Shortfall (if any) following current Remittance Date
(a) Class A-1
----------
(b) Class A-2
----------
(c) Class A-3
----------
(d) Class A-4
----------
Class M-1 Distribution Test, Class M-2 Distribution Test and Class B-1
Distribution Test (calculations applicable on and after the Remittance Date
occurring in January 2006)
27. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for current Remittance Date
----------
M-4
(b) Average Sixty-Day Delinquency Ratio (arithmetic average of ratios for this
month and two preceding months; may not exceed 6.25%)
----------
28. Cumulative Realized Losses Test
(a) Cumulative Realized Losses for current Remittance Date
----------
(b) (as a percentage of Cut-off Date Pool Principal Balance; may not exceed
7.00% from January 1, 2006 to December 31, 2006; 8.75% from January 1, 2007
to December 31, 2007; 11.75% from January 1, 2008 to December 31, 2008; and
13.25% thereafter)
----------
29. Current Realized Losses Test
(a) Current Realized Losses for current Remittance Date
----------
(b) Current Realized Loss Ratio (total Realized Losses for most recent three
months, multiplied by 4, divided by arithmetic average of Pool Scheduled
Principal Balances for third preceding Remittance Date and for current
Remittance Date; may not exceed 3.50%)
----------
30. Class M-1 Principal Balance Test
Sum of Class M-1 Principal Balance, Class M-2 Principal Balance, Class B
Principal Balance and the Over-collateralization Amount before
distributions on current Remittance Date divided by Pool Scheduled
Principal Balance as of preceding Remittance Date (must be equal to or
greater than 34.125%).
----------
31. Class M-2 Principal Balance Test
Sum of Class M-2 Principal Balance, Class B Principal Balance and the
Over-collateralization Amount (before distributions on current Remittance
Date) divided by Pool Scheduled Principal Balance as of preceding
Remittance Date (must be equal to or greater than 24.000%).
----------
32. Class B Principal Balance Test
(a) The Class B Principal Balance (before any distributions on current
Remittance Date) as of such Remittance Date (must be greater than
$9,500,000)
----------
M-5
(b) Sum of Class B Principal Balance and the Overcollateralization Amount
(before distributions on current Remittance Date) divided by Pool Scheduled
Principal Balance as of preceding Remittance Date (must be equal to or
greater than 16.725%).
----------
Class M-1 Certificates
----------------------
33. Class M-1 Percentage for such Remittance Date
----------
34. Class M-1 Percentage for the following Remittance Date
----------
35. Class M-1 principal distribution:
(a) Current (Class M-1 Percentage of Formula Principal Distribution Amount)
----------
(b) Unpaid Class M-1 Principal Shortfall
----------
(c) Additional Principal Distribution Amount
----------
36. Unpaid Class M-1 Principal Shortfall (if any) following current Remittance Date
----------
37. Class M-1 Liquidation Loss Interest
(a) Class M-1 Liquidation Loss Amount
----------
(b) Amount applied to Class M-1 Liquidation Loss Interest Amount
----------
(c) Remaining Class M-1 Liquidation Loss Interest Amount
----------
(d) Amount applied to Unpaid Class M-1Loss Interest Shortfall
----------
(e) Remaining Unpaid Class M-1 Liquidation Loss Interest Shortfalls
----------
Class M-2 Certificates
----------------------
38. Class M-2 Percentage for such Remittance Date
----------
39. Class M-2 Percentage for the following Remittance Date
----------
40. Class M-2 principal distribution
(a) Current (Class M-2 Percentage of Formula Principal Distribution Amount)
----------
(b) Unpaid Class M-2 Principal Shortfall
----------
(c) Additional Principal Distribution Amount
----------
M-6
41. Unpaid Class M-2 Principal Shortfall (if any) following current Remittance Date
----------
42. Class M-2 Liquidation Loss Interest
(a) Class M-2 Liquidation Loss Amount
----------
(b) Amount applied to Class M-2 Liquidation Loss Interest Amount
----------
(c) Remaining Class M-2 Liquidation Loss Interest Amount
----------
(d) Amount applied to Unpaid Class M-2 Loss Interest Shortfall
----------
(e) Remaining Unpaid Class M-2 Liquidation Loss Interest Shortfalls
----------
Class B-1 Certificates
----------------------
43.
(a) Class B Percentage for such Remittance Date
----------
(b) Class B Percentage for the following Remittance Date
----------
44. Class B-1 principal distribution
(a) Current (Class B Percentage of Formula Principal Distribution Amount)
----------
(b) Unpaid Class B-1 Principal Shortfall
----------
(c) Additional Principal Distribution Amount
----------
45. Unpaid Class B-1 Principal Shortfall
----------
46. Class B-1 Principal Balance
----------
47. Class B-1 Liquidation Loss Interest
(a) Class B-1 Liquidation Loss Amount
----------
(b) Amount applied to Class B-1 Liquidation Loss Interest Amount
----------
(c) Remaining Class B-1 Liquidation Loss Interest Amount
----------
(d) Amount applied to Unpaid Class B-1 Liquidation Loss Interest Shortfall
----------
(e) Remaining Unpaid Class B-1 Liquidation Loss Interest Shortfall
----------
Class B-2 Certificates
----------------------
48. Remaining Amount Available
----------
M-7
Interest
---------
49. Interest accrued at Class B-2 Remittance Rate (9.40%, or the Adjusted Net WAC Cap Rate, if
less)
----------
50. Class B-2 Interest paid
----------
51. Current interest
----------
52. Amount applied to Unpaid Class B-2 Interest Shortfall
----------
53. Remaining Unpaid Class B-2 Interest Shortfall
----------
Principal
---------
54. Unpaid Class B-2 Principal Shortfall (if any) following prior Remittance Date
----------
55. Class B-2 Liquidation Loss Amount
----------
56. Current principal (zero until Class B-1 paid down; thereafter, Class B Percentage of
Formula Principal Distribution Amount)
----------
57. Additional Principal Distribution Amount
----------
58. Class B-2 Principal Balance
----------
Class B-3I Certificates
-----------------------
59. (a) B-3I Remittance Rate (The excess of (a) the Adjusted Net WAC Cap Rate over
(b) the product of (i) two and (ii) the weighted average Remittance Rate of
the Class I-Accrual Interest and the Intermediate REMIC Accretion Directed
Interests, provided that for this purpose the Remittance Rate for the Class
I-Accrual Interest shall not exceed zero and the Remittance Rate for each
Intermediate REMIC Accretion Directed Interest shall not exceed the
Remittance Rate on its Corresponding Certificate Class. Each Intermediate
REMIC Accretion Directed Interest has principal balance equal to 1/2 that
of its Corresponding Certificate Class. Principal balance of Class
I-Accrual Interest equals 1/2 sum of Pool Scheduled Principal Balance,
Pre-Funded Amount and Overcollateralization Amount as of preceding
Remittance Date after giving effect to distributions on that date.)
----------
(b) Class B-3I Notional Amount (Pool Scheduled Principal Balance plus
Pre-Funded Amount as of preceding Remittance Date)
----------
(c) Payment under Section 8.03(a)(xiii)
----------
M-8
(d) Pool Scheduled Principal Balance (on Remittance Date on which aggregate
Class Principal Balance of Certificates is reduced to 0)
----------
(e) Class B-3I Distribution Amount (line (a) times line (b), less line (c),
plus line (d)), plus any Shortfall on prior Remittance Date
----------
(f) Distribution to Class B-3I Certificates
----------
(g) Shortfall (line (e) less line (f))
----------
Class A, Class M and Class B Certificates
-----------------------------------------
60. Aggregate Scheduled Principal Balance of delinquent Contracts as of Determination Date
(a) 30 - 59 days
----------
(b) 60 days or more
----------
61. Manufactured Homes repossessed
----------
62. Manufactured Homes repossessed but remaining in inventory
----------
63. Repossessed Manufactured Homes purchased by Originator or Subsidiary
(a) number of Contracts
----------
current
----------
month
----------
cumulative
----------
(b) Scheduled Principal Balance
----------
current
----------
month
----------
cumulative
----------
(c) Purchase Price
----------
current
----------
month
----------
cumulative
----------
64. WAV Cap Rate of all outstanding Contracts
----------
Class M and Class B Certificates
--------------------------------
65. Adjusted Net WAC Cap Rate
----------
Class M-1 Certificates
----------------------
66. Unpaid Class M-1 Basis Risk Carryover Shortfall
----------
M-9
67. Basis Risk Reserve Fund Shortfall deposited
----------
Please contact Bondholder Services Department of U.S. Bank National
Association, 1-800-934-6802 with any questions regarding this Statement or your
Distribution.
M-10
EXHIBIT N
FORM OF ADDITION NOTICE
______________, 2001
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
December 1, 2001, among Conseco Finance Corp. (the "Company"), Conseco
Finance Securitizations Corp. (the "Seller") and U.S. Bank National
Association as Trustee (the "Trustee") relating to Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates, Series
2001-4
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 Contracts on the date and in the amounts
set forth below:
Subsequent Transfer Date: _________________
Cut-off Date Principal Balance of Subsequent Contracts to be assigned to
Trust on Subsequent Transfer Date: $_____________
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 SECURITIZATIONS CORP.
By:
--------------------------------------------
Name:
Title:
N-1
ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------------
Name:
Title:
N-2
EXHIBIT O
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of December 1, 2001, among Conseco Finance Corp. (the "Originator"),
Conseco Finance Securitizations Corp. (the "Seller") and U.S. Bank National
Association as Trustee (the "Trustee"), the Seller does hereby transfer, assign,
set over and otherwise convey, without recourse, to Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificate Trust 2001-4, created by
the Agreement, to be held in trust as provided in the Agreement, (i) all the
right, title and interest of the Seller in and to the Subsequent Contracts
identified on the list attached hereto as Exhibit A (the "Subsequent
Contracts"), including, without limitation, all right, title and interest in and
to the Collateral Security and all rights to receive payments on or with respect
to the Subsequent Contracts (other than the principal and interest due on the
Subsequent Contracts on or before the applicable Cut-off Date), (ii) all rights
under every Hazard Insurance Policy relating to a Manufactured Home securing a
Subsequent Contract for the benefit of the owner of such Subsequent Contract,
(iii) all rights under all FHA/VA Regulations pertaining to any Subsequent
Contract that is an FHA/VA Contract, (iv) the proceeds from the Errors and
Omissions Protection Policy and all rights under any blanket hazard insurance
policy to the extent they relate to the Manufactured Homes, (v) all documents
contained in the Contract Files and the Land-and-Home Contract Files relating to
the Subsequent Contracts, (vi) all rights of the Seller under the Subsequent
Transfer Agreement of even date herewith between the Originator and the Seller
and (vii) all proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. 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 ________, 2001.
CONSECO FINANCE SECURITIZATIONS CORP.
By
---------------------------------------------
Name:
Title:
O-1
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Company in connection with the Pooling and Servicing Agreement dated as of
December 1, 2001 (the "Agreement") among the Company, Conseco Finance Corp. 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:
This Certificate is delivered in connection with the sale to the Trust on
__________________ (the "Subsequent Transfer Date") of Contracts (the
"Subsequent Contracts") identified in the List of Contracts attached to the
Subsequent Transfer Instrument of even date herewith.
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
Contracts are true to the best of [her][his] knowledge.
All conditions precedent to the sale of the Subsequent Contracts to the
Trust under Section 2.03 of the Agreement have been satisfied.
As of the Subsequent Transfer Date, the Company is not insolvent and will
not be made insolvent by the transfer of the Subsequent Contracts, and the
undersigned is not aware of any pending insolvency of the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
_________, 2001.
By
---------------------------------------------
Name:
Title:
P-1
