EXHIBIT 4.1
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2002-2
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
CONSECO FINANCE CORP.
as Originator and Initial Servicer
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Backup Servicer
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
Dated as of June 1, 2002
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 .................. 46
SECTION 2.01 Closing .................................................. 46
SECTION 2.02 Conditions to the Closing ................................ 48
SECTION 2.03 Conveyance of the Subsequent Contracts ................... 49
SECTION 2.04 Acceptance by Trustee .................................... 51
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 .................. 67
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 ........................................... 71
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 ................................... 75
SECTION 4.05 Costs and Expenses ....................................... 75
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 ................................ 76
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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 ................................. 81
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
SECTION 5.14 Advance Facility ......................................... 85
SECTION 5.15 Backup Servicer .......................................... 87
ARTICLE VI REPORTS AND TAX MATTERS ........................................ 90
SECTION 6.01 Monthly Reports .......................................... 90
SECTION 6.02 Certificate of Servicing Officer ......................... 90
SECTION 6.03 Other Data ............................................... 91
SECTION 6.04 Annual Report of Accountants ............................. 91
SECTION 6.05 Statements to Certificateholders ......................... 91
SECTION 6.06 Payment of Taxes ......................................... 93
ARTICLE VII SERVICE TRANSFER .............................................. 94
SECTION 7.01 Event of Termination ..................................... 94
SECTION 7.02 Transfer ................................................. 97
SECTION 7.03 Trustee to Act; Appointment of Successor ................. 98
SECTION 7.04 Notification to Certificateholders ....................... 98
SECTION 7.05 Effect of Transfer ....................................... 99
SECTION 7.06 Transfer of Certificate Account .......................... 99
ARTICLE VIII PAYMENTS ..................................................... 99
SECTION 8.01 Monthly Payments ......................................... 99
SECTION 8.02 Permitted Withdrawals from the Certificate Account ....... 100
SECTION 8.03 Payments ................................................. 101
SECTION 8.04 [RESERVED] ............................................... 108
SECTION 8.05 Class C Subsidiary Certificateholder's Purchase Option;
Additional Principal Distribution Amount ................ 108
SECTION 8.06 [RESERVED] ............................................... 109
SECTION 8.07 Pre-Funding Account ...................................... 109
ARTICLE IX THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS ....... 111
SECTION 9.01 The Certificates ......................................... 111
SECTION 9.02 Registration of Transfer and Exchange of Certificates .... 112
SECTION 9.03 No Charge; Disposition of Void Certificates .............. 117
SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates ........ 117
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SECTION 9.05 Persons Deemed Owners ................................... 117
SECTION 9.06 Access to List of Certificateholders' Names and
Addresses .............................................. 117
SECTION 9.07 Authenticating Agents ................................... 118
ARTICLE X INDEMNITIES ..................................................... 118
SECTION 10.01 Seller's and Originator's Indemnities ................... 118
SECTION 10.02 Liabilities to Obligors ................................. 119
SECTION 10.03 Tax Indemnification ..................................... 119
SECTION 10.04 Servicer's Indemnities .................................. 119
SECTION 10.05 Operation of Indemnities ................................ 119
SECTION 10.06 REMIC Tax Matters ....................................... 119
SECTION 10.07 Limitation of Liability ................................. 120
ARTICLE XI THE TRUSTEE .................................................... 120
SECTION 11.01 Duties of Trustee ....................................... 120
SECTION 11.02 Certain Matters Affecting the Trustee ................... 121
SECTION 11.03 Trustee Not Liable for Certificates or Contracts ........ 122
SECTION 11.04 Rights of Certificateholders to Direct Trustee and to
Waive Event of Termination ............................. 122
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses ......... 123
SECTION 11.06 Eligibility Requirements for Trustee .................... 124
SECTION 11.07 Resignation or Removal of Trustee ....................... 124
SECTION 11.08 Successor Trustee ....................................... 124
SECTION 11.09 Merger or Consolidation of Trustee ...................... 125
SECTION 11.10 Tax Returns ............................................. 125
SECTION 11.11 Obligor Claims .......................................... 125
SECTION 11.12 Appointment of Co-Trustee or Separate Trustee ........... 126
SECTION 11.13 Agents of Trustee ....................................... 127
ARTICLE XII MISCELLANEOUS ................................................. 127
SECTION 12.01 Servicer Not to Assign Duties or Resign;
Delegation of Servicing Functions ...................... 127
SECTION 12.02 Maintenance of Office or Agency ......................... 128
SECTION 12.03 Termination ............................................. 128
SECTION 12.04 Acts of Certificateholders .............................. 131
SECTION 12.05 Calculations ............................................ 131
SECTION 12.06 Assignment or Delegation by Originator .................. 131
SECTION 12.07 Amendment ............................................... 132
SECTION 12.08 Notices ................................................. 134
SECTION 12.09 Merger and Integration .................................. 135
SECTION 12.10 Headings ................................................ 135
SECTION 12.11 Governing Law ........................................... 136
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EXHIBIT A-1 -- Form of Class A-[1][2] Certificate .................. ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ -- 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) ..................................... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ -- 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 June 1, 2002, among Conseco Finance Securitizations
Corp., a corporation organized and existing under the laws of the State of
Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a corporation
organized and existing under the laws of the State of Delaware, as originator
(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"), ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as Backup Servicer (the "Backup 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, the Backup 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 September 2002, the Amount Available
remaining after payment of the amounts described in clauses (i) through (x) of
Section 8.03(a), subject to the limitations and conditions specified in Section
8.03(a)(xi).
"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. Solely for
purposes of Section 8.03(b), this term as defined above shall be appropriately
modified to take into account, for any Remittance Date, those corresponding
amounts distributed pursuant to Section 8.03(c).
"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) the Class A-IO Remittance Rate, and
(ii) the sum of the Subsidiary Interest Adjusted Principal Balance of the
(A) Class S-2(1) Interest through and including the September 2002
Remittance Date,
(B) Class S-2(2) Interest through and including the December 2002
Remittance Date,
(C) Class S-2(3) Interest through and including the March 2003
Remittance Date,
(D) Class S-2(4) Interest through and including the June 2003
Remittance Date,
(E) Class S-2(5) Interest through and including the September 2003
Remittance Date,
(F) Class S-2(6) Interest through and including the December 2003
Remittance Date,
(G) Class S-2(7) Interest through and including the March 2004
Remittance Date,
(H) Class S-2(8) Interest through and including the June 2004
Remittance Date,
(I) Class S-2(9) Interest through and including the September 2004
Remittance Date,
(J) Class S-2(10) Interest through and including the December 2004
Remittance Date,
(K) Class S-2(11) Interest through and including the March 2005
Remittance Date,
(L) Class S-2(12) Interest through and including the June 2005
Remittance Date,
(M) Class S-2(13) Interest through and including the September 2005
Remittance Date,
(N) Class S-2(14) Interest through and including the December 2005
Remittance Date,
(O) Class S-2(15) Interest through and including the March 2006
Remittance Date,
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(P) Class S-2(16) Interest through and including the June 2006
Remittance Date,
(Q) Class S-2(17) Interest through and including the September 2006
Remittance Date,
(R) Class S-2(18) Interest through and including the December 2006
Remittance Date,
(S) Class S-2(19) Interest through and including the March 2007
Remittance Date,
(T) Class S-2(20) Interest through and including the June 2007
Remittance Date,
(U) Class S-2(21) Interest through and including the September 2007
Remittance Date,
(V) Class S-2(22) Interest through and including the December 2007
Remittance Date;
(W) Class S-2(23) Interest through and including the March 2008
Remittance Date;
(X) Class S-2(24) Interest through and including the June 2008
Remittance Date,
(Y) Class S-2(25) Interest through and including the September 2008
Remittance Date,
(Z) Class S-2(26) Interest through and including the December 2008
Remittance Date,
(AA) Class S-2(27) Interest through and including the March 2009
Remittance Date,
(BB) Class S-2(28) Interest through and including the June 2009
Remittance Date,
(CC) Class S-2(29) Interest through and including the September 2009
Remittance Date,
(DD) Class S-2(30) Interest through and including the December 2009
Remittance Date,
(EE) Class S-2(31) Interest through and including the March 2010
Remittance Date,
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(FF) Class S-2(32) Interest through and including the June 2010
Remittance Date, and
(iii) 0 after the June 2010 Remittance Date, 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 Financing Person" has the meaning given in Section 5.14(a).
"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.
"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
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(C) with respect to all Remittance Dates other than the Remittance
Date in July 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.
"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.
"Backup Servicer" means ▇▇▇▇▇ Fargo Bank Minnesota, National Association,
an affiliate which engages in servicing practices on its behalf, or its
successors and permitted assignees.
"Backup Servicing Fee" means, for any Remittance Date, one twelfth of the
product of 0.02% and the Pool Scheduled Principal Balance for the preceding
Remittance Date (or, in the case of the first Remittance Date, the Cur-off Date
Pool Principal Balance).
"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.
"Certificates" means the Class A, Class A-IO, Class M, Class B, Class B-3I,
and Class C Certificates, collectively.
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"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 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 or Class A-2
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-2 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 distributed pursuant to clause (i) of Section 8.03(a)), 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:
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(i) one month's interest (or, as to the first Remittance Date, interest
from and including June 1, 2002 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,
and
(B) the Class A-2 Remittance Rate on the Class A-2 Principal Balance,
in each case, calculated immediately prior to such Remittance Date,
(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)(xi);
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 and the Original Class A-2
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) and (i)(B) 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)(ii) 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.
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"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.
"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 a rate equal to the lesser of
(i) 2.477% per annum, and
(ii) the Adjusted Net WAC Cap Rate.
"Class A-2 Remittance Rate" means a rate equal to the lesser of
(i) 6.030% 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 June 1, 2002 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 June 2010 the
lesser of (A) the
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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 a rate equal to the lesser of
(i) 8.50% per annum, and
(ii) the Net WAC Cap Rate.
"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:
(i) such Remittance Date occurs in or after July 2006;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 7.00%;
(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 29.625%; and
(vi) the Class B Principal Balance plus the Overcollateralization Amount as
of such Remittance Date is greater than or equal to $10,000,000.
"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 (minus the Unpaid Class B-1 Principal Shortfall, if any, and
the Unpaid Class B-2 Principal Shortfall, if any) and the
Overcollateralization Amount and the denominator of which is the sum
of:
(A) the Class A Principal Balance,
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(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.
"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 June 1, 2002 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)(xi),
(vi) any Class B-1 Liquidation Loss Interest Amount, and
(vii) any Unpaid Class B-1 Liquidation Loss Interest Shortfall;
10
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)(v)(A) and (B) and
Section 8.03(a)(ix)(C) and (D) on such Remittance Date.
"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)(v)(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).
11
"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)(ix)(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)(ix)(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.
"Class B-1 Remittance Rate" means a rate equal to the lesser of
(i) 9.250% 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 Amount Available remaining after distributions pursuant to
clauses (i) through (ix) of Section 8.03(a) 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 June 1, 2002 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:
12
(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)(xi);
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.
"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)(x)(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)(x)(D) is less
than the amount described in Section 8.03(a)(x)(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
13
(i) 9.250% 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)-(xii) 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.
"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 $500,000,000 for the first Remittance
Date and, for any other Remittance Date, the sum of the Pool Scheduled Principal
Balance, the Pre-Funded Amount and amounts on deposit in the Staged-Funding
Contract Reserve Account 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, Class C
Intermediate or Class C Master Certificates.
"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).
14
"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)(xv).
"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.
"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), Class I-AIO(23), Class I-AIO(24), Class I-AIO(25), Class
I-AIO(26), Class I-AIO(27), Class I-AIO(28), Class I-AIO(29), Class I-AIO(30),
Class I-AIO(31) and Class I-AIO(32) Interests, collectively.
"Class I-A1 Interest," "Class I-A2 Interest," "Class I-AIL 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 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.
15
"Class M-1 Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that:
(i) such Remittance Date occurs in or after July 2006;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 7.00%;
(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 49.875%.
"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 June 1, 2002 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)(xi),
(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.
16
"Class M-1 Interest Deficiency Amount" means, as to the Class M-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 M-1 Formula Distribution Amount,"
and
(ii) the amount available for distribution to the Class M-1
Certificateholders pursuant to Section 8.03(a)(iii)(A) and (B) and
Section 8.03(a)(vii)(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)(iii)(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)(vii)(C) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.
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 (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-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)(vii)(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 rate equal to the lesser of
(i) 7.424% per annum;
(ii) the Adjusted Net WAC Cap Rate.
"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 July 2006;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 7.00%;
(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
38.25%.
"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 June 1, 2002 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)(xi),
(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)(iv)(A) and (B) and
Section 8.03(a)(viii)(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)(iv)(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).
"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.
20
"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)(viii)(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-1
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) 9.163% per annum, and
(ii) the Adjusted Net WAC Cap Rate.
"Class of Uncertificated Intermediate Interests" means any one of the Class
I-A1, Class I-A2, 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", "Class S-2(23) Interest",
"Class S-2(24) Interest", "Class S-2(25) Interest", "Class S-2(26) Interest",
"Class S-2(27) Interest", "Class S-2(28) Interest", "Class S-2(29) Interest",
"Class S-2(30) Interest", "Class S-2(31) Interest", and "Class S-2(32)
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, Class S-2(23) Interest, Class S-2(24)
Interest, Class S-2(25) Interest, Class S-2(26) Interest, Class S-2(27)
Interest, Class S-2(28) Interest, Class S-2(29) Interest, Class S-2(30)
Interest, Class S-2(31) Interest, and Class S-2(32) Interests.
"Closing Date" means June 14, 2002.
"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,
22
(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.
"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).
23
"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.
"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-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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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 July 1, 2006 and June 30, 2007
(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 July 1, 2007 and June 30, 2008
(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;
24
(iii) if such Remittance Date occurs between July 1, 2008 and June 30, 2009
(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
(iv) if such Remittance Date occurs on or after July 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 May 31, 2002 with respect to the Initial Contracts and
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.
"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).
"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:
25
(i) one certificate evidencing in initial aggregate $46,250,000 in
Original Principal Balance of Class A-1 Certificates,
(ii) one certificate evidencing in initial aggregate $300,000,000 in
Original Principal Balance of Class A-2 Certificates,
(iii) one certificate evidencing $117,700,000 in Original Notional
Principal Amount of Class A-IO Certificates,
(iv) one certificate evidencing $38,750,000 in Original Principal Balance
of Class M-1 Certificates,
(v) one certificate evidencing $28,750,000 in Original Principal Balance
of Class M-2 Certificates,
(vi) one certificate evidencing $28,750,000 in Original Principal Balance
of Class B-1 Certificates, and
(vii) if and when the Class B-2 Certificates are delivered to the
Depository as provided in Section 9.01(c), one certificate evidencing
$18,750,000 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)(A).
"Distribution Amount" means, as to any Remittance Date and each Class of
Class A, Class M and Class B Certificates, the amount distributed to such Class
under Section 8.03(a).
"Due Date" means, as to any Contract, the date of the month on which the
scheduled monthly payment for such Contract is due.
"Due Period" means with respect to any Remittance Date other than the
Remittance Date in July 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 July 2002, the period from and including June 1, 2002 and
including June 15, 2002.
"Electronic Ledger" means the electronic master record of installment sale
contracts of the Originator.
26
"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 ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇), 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 or ▇▇▇▇▇'▇ to
downgrade or withdraw their then-current ratings assigned to the
Certificates, as confirmed in writing by Standard & Poor's and
▇▇▇▇▇'▇.
"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 ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇), 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 ▇▇▇▇▇'▇, 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 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
27
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 ▇▇▇▇▇'▇, 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
▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇, 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;
(vi) commercial paper having a rating of at least A-1+ from Standard &
Poor's and at least P-1 from ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇) at the time
of such investment or pledge as a security;
(vii) money market funds rated AAAm or AAAm-G by S&P ; and
(viii) 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-
28
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, the Backup Servicer 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 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.
29
"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.
"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 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
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
30
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 September 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 July 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 August 31, 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, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ 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
(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.
31
"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 March 15, 1985, and which have an aggregate principal balance as of the
Cut-off Date of $483,428,300.26.
"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, the Overcollateralization Amount and amounts on deposit
in the Staged-Funding Contract Reserve Account.
"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 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;
32
(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.
"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.
33
"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 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(b), 2.05(c)
and 2.05(d), respectively.
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Remittance Date and with respect
to (i) any Servicer other than the Backup Servicer, 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) and (ii) the Backup Servicer,
should it become the Servicer, one twelfth of the product of 1.0% and the Pool
Scheduled Principal Balance for the immediately preceding Remittance Date.
"Moody's" means ▇▇▇▇▇'▇ 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 "Moody's" 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 ▇▇▇▇▇'▇ shall
be deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
34
"Mortgage" means the mortgage, deed of trust, security deed or similar
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.
"Mortgaged Property" means the property subject to the lien of a Mortgage.
"Net Liquidation Loss" means, 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
(i) the per annum rate at which the Monthly Servicing Fee and the Backup
Servicing Fee are paid and
(ii) any other fees, expenses and indemnification paid to the Backup
Servicer or the Trustee (expressed as a percentage of the Pool
Scheduled Principal Balance), pursuant to Section 8.03(a)(i).
"Non-Recoverable Liquidation Expense" means, as to any Liquidation Expense
that has not yet been incurred by the Servicer, any portion of the amount of
such prospective Liquidation Expense which the Servicer reasonably determines
would, when combined with all Liquidation Expenses previously incurred with
respect to that Contract, exceed the Related Proceeds; and as to any Liquidation
Expense that has been incurred by the Servicer, any portion of the amount of
such Liquidation Expense that has subsequently been determined by the Servicer
to exceed the Related Proceeds, when combined with all Liquidation Expenses
previously incurred with respect to that Contract. In determining whether a
Liquidation Expense would be or has become a Non-Recoverable Liquidation
Expense, the Servicer may not take into account the possibility that it might
recover any amounts as the result of a deficiency judgment against the related
Obligor.
"Notional Principal Amount" means, as to the Class I -AIO Interest and the
Class A-IO Certificates and each Remittance Date identified below, the related
amount set forth below:
Remittance Date Notional Principal Amount
--------------- -------------------------
July, August, September 2002 $117,700,000
October, November, December 2002 114,900,000
January, February, March 2003 112,100,000
April, May, June 2003 109,100,000
July, August, September 2003 106,200,000
October, November, December 2003 103,100,000
35
Remittance Date Notional Principal Amount
--------------- -------------------------
January, February, March 2004 100,000,000
April, May, June 2004 96,900,000
July, August, September 2004 93,800,000
October, November, December 2004 90,800,000
January, February, March 2005 87,900,000
April, May, June 2005 85,100,000
July, August, September 2005 82,300,000
October, November, December 2005 79,600,000
January, February, March 2006 76,900,000
April, May, June 2006 74,400,000
July, August, September 2006 71,900,000
October, November, December 2006 69,500,000
January, February, March 2007 67,100,000
April, May, June 2007 64,900,000
July, August, September 2007 62,900,000
October, November, December 2007 60,800,000
January, February, March 2008 58,900,000
April, May, June 2008 57,000,000
July, August, September 2008 55,100,000
October, November, December 2008 53,300,000
January, February, March 2009 51,500,000
April, May, June 2009 49,800,000
July, August, September 2009 48,200,000
October, November, December 2009 46,600,000
January, February, March 2010 45,000,000
April, May, June 2010 43,400,000
"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.
"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
(other than the Class A-IO Interest), Uncertificated Intermediate Interests
(other than the Class I-AIO Interest) 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).
36
"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.
"Permitted Transferee" means any Person that either has complied with the
requirements set forth in Section 9.02(b)(3)(B) or has been excused (by virtue
of Section 9.02(b)(3)) from the Section 9.03(b)(3)(B) requirement that such
transferee deliver an affidavit declaring that it is not a Disqualified
Organization.
"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).
"Pool Factor" means, at any time, the percentage derived from a fraction,
the numerator of which is the Pool Scheduled Principal Balance 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.
37
"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.
"Prospectus Supplement" means the Prospectus Supplement, dated June 10,
2002, relating to the offering of the Class A, Class A-IO, Class M and Class B-1
Certificates.
"Rating Agencies" means Standard & Poor's and Moody's.
"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.
"Regular Certificate" means a Class A, Class A-IO, Class M, Class B or
Class B-3I Certificate.
"Related Proceeds" means, with respect to any Liquidation Expense paid by
the Servicer in connection with the servicing of a Contract, collections from
the related Obligor or in respect of Insurance Proceeds, Liquidation Proceeds or
a Repurchase Price recovered by the Servicer in respect of such Contract or the
related Manufactured Home or Mortgaged Property.
38
"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 July 2002.
"Remittance Rate" means with respect to each Class of Certificates, the
rate set forth in Section 2.05(b), with respect to each Class of Uncertificated
Intermediate Interests, the rate set forth in Section 2.05(c) and with respect
to each Class of Uncertificated Subisidary Interests, the rate set forth in
Section 2.05(d).
"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.
"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 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
39
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.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicer" means the Originator until any Service Transfer hereunder and
thereafter means the Backup Servicer or any other new servicer appointed
pursuant to Article VII.
"Servicer's Assignee" has the meaning given in Section 5.14(a).
"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 ▇▇▇▇▇▇-▇▇▇▇ 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(c)(ii) is less than the amount specified in Section 8.03(c)(ii).
"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
Interest any remaining excess, up to its Subsidiary Interest Principal Balance,
and last to the S-2 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 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 2002-2, 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) 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
(ix) amounts in the Pre-Funding Account.
"Uncertificated Intermediate Interests" means the Class I-A1, Class I-A2,
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 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
42
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 Credit Suisse First Boston Corporation, ▇▇▇▇▇▇
Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.
"Underwriting Agreement" means the Underwriting Agreement dated June 10,
2002 and related Terms Agreement dated as of June 10, 2002, 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)(vi)(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).
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of
43
(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)(ix)(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)(ix)(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)(x)(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)(xiii) in respect
of any Unpaid Class B-3I Shortfall.
"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
44
(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)(vii)(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
(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)(viii)(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)(vii)(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)(viii)(A).
45
"Unpaid Intermediate Interest Shortfall" means, as to any Remittance Date
and any Class of Uncertificated Intermediate Interests other than the Class
I-Accrual Interest, the amount, if any, of the Intermediate 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 the Net WAC Cap Rate 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.
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.
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 2002-2. 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, and 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),
46
(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) $1,365,722.53 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 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, and
(ix) 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 (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)(ix) 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
47
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;
(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, naming 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, naming 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;
48
(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);
(xv) a letter from ▇▇▇▇▇'▇ 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 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;"
(xvii) the demand note described in Section 3.06(c)(5);
(xviii) an executed copy of the Transfer Agreement;
(xix) evidence of the deposit of $1,365,722.53 in the Staged-Funding
Contract Reserve Account;
(xx) evidence of the deposit of $189,455.62 in the Pre-Funding Account;
(xxi) 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; and
(xxii) 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
49
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 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;
50
(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.
(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.
51
(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 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 and the Pre-Funding Account) elects to be treated as a REMIC for
such taxable year and all subsequent taxable years and the Trustee shall sign
such return. In furtherance of the foregoing, the Trustee (at the direction of
the Originator, the Seller or the Servicer) 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 eight 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:
52
Original Class
Principal Balance
Pass-Through Rate (or Notional Assumed Final
Class Per Annum Principal Amount) Maturity Date(1)
---------- ---------------------------- ----------------- ----------------
Class A-1 the lesser of 2.477% per year $ 46,250,0000 May 2034
or the Adjusted Net WAC
Cap Rate
Class A-2 the lesser of 6.030% per $300,000,0000 May 2034
year or the Adjusted Net
WAC Cap Rate
Class A-IO (2) $ (2) May 2034
Class M-1 the lesser of 7.424% per $ 38,750,0000 May 2034
year or the Adjusted Net
WAC Cap Rate
Class M-2 the lesser of 9.163% per $ 28,750,0000 May 2034
year or the Adjusted Net
WAC Cap Rate
Class B-1 the lesser of 9.250% per $ 28,750,0000 May 2034
year or the Adjusted Net
WAC Cap Rate
Class B-2 the lesser of 9.250% per $ 18,750,0000 May 2034
year or the Adjusted Net
WAC Cap Rate
Class B-3I (3) $ (3) May 2034
---------------
(1) Solely for purposes of Treas. Reg. Sec. 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 be entitled to 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 Remittance Rate on the Class A-IO Notional Amount. For federal
tax purposes and pursuant to Treas. Reg. Sec. 1.860G-1(a)(2)(v), the Class
A-IO Certificates will be entitled to 100% of the interest payable on the
Class I-AIO Interest.
(3) Solely for federal income tax purposes, the Class B-3I Certificate will be
comprised of two components, each of which is hereby designated a REMIC
regular interest for federal income tax purposes: component one will be an
interest-only regular interest component entitled to the payment of the
Class B-3I Formula Distribution Amount (bearing interest at a rate and upon
an amount as set forth by the defined terms contained in such definition);
component two will have a principal balance equal to the
Overcollateralization Amount on the Closing Date and will not bear
interest.
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-nine 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:
53
Pass-Through Original Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
---------------- ------------------------- ----------------- ----------------
Class I-A1 Adjusted Net WAC Cap Rate $ 23,125,000 May 2034
Class I-A2 Adjusted Net WAC Cap Rate $150,000,000 May 2034
Class I-AIO(1) (2) (2) May 2034
Class I-AIO(2) (2) (2) May 2034
Class I-AIO(3) (2) (2) May 2034
Class I-AIO(4) (2) (2) May 2034
Class I-AIO(5) (2) (2) May 2034
Class I-AIO(6) (2) (2) May 2034
Class I-AIO(7) (2) (2) May 2034
Class I-AIO(8) (2) (2) May 2034
Class I-AIO(9) (2) (2) May 2034
Class I-AIO(10) (2) (2) May 2034
Class I-AIO(11) (2) (2) May 2034
Class I-AIO(12) (2) (2) May 2034
Class I-AIO(13) (2) (2) May 2034
Class I-AIO(14) (2) (2) May 2034
Class I-AIO(15) (2) (2) May 2034
Class I-AIO(16) (2) (2) May 2034
Class I-AIO(17) (2) (2) May 2034
Class I-AIO(18) (2) (2) May 2034
Class I-AIO(19) (2) (2) May 2034
Class I-AIO(20) (2) (2) May 2034
Class I-AIO(21) (2) (2) May 2034
Class I-AIO(22) (2) (2) May 2034
Class I-AIO(23) (2) (2) May 2034
54
Pass-Through Original Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
---------------- ------------------------- ----------------- ----------------
Class I-AIO(24) (2) (2) May 2034
Class I-AIO(25) (2) (2) May 2034
Class I-AIO(26) (2) (2) May 2034
Class I-AIO(27) (2) (2) May 2034
Class I-AIO(28) (2) (2) May 2034
Class I-AIO(29) (2) (2) May 2034
Class I-AIO(30) (2) (2) May 2034
Class I-AIO(31) (2) (2) May 2034
Class I-AIO(32) (2) (2) May 2034
Class I-M1 Adjusted Net WAC Cap Rate $ 19,375,000 May 2034
Class I-M2 Adjusted Net WAC Cap Rate $ 14,375,000 May 2034
Class I-B1 Adjusted Net WAC Cap Rate $ 14,375,000 May 2034
Class I-B2 Adjusted Net WAC Cap Rate $ 9,375,000 May 2034
Class I-Accrual Adjusted Net WAC Cap Rate $269,375,000 May 2034
(1) Solely for purposes of Treas. Reg. Sec. 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(b)(i)(B). Therefore, solely for federal income
tax purposes, the corresponding Remittance 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.
55
(d) The Uncertificated Subsidiary Interests are being issued in
thirty-three 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 Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
---------------- ------------------------- ----------------- ----------------
Class S-1 Net WAC Cap Rate $382,300,000 May 2034
Class S-2(1) Net WAC Cap Rate $ 2,800,000 May 2034
Class S-2(2) Net WAC Cap Rate $ 2,800,000 May 2034
Class S-2(3) Net WAC Cap Rate $ 3,000,000 May 2034
Class S-2(4) Net WAC Cap Rate $ 2,900,000 May 2034
Class S-2(5) Net WAC Cap Rate $ 3,100,000 May 2034
Class S-2(6) Net WAC Cap Rate $ 3,100,000 May 2034
Class S-2(7) Net WAC Cap Rate $ 3,100,000 May 2034
Class S-2(8) Net WAC Cap Rate $ 3,100,000 May 2034
Class S-2(9) Net WAC Cap Rate $ 3,000,000 May 2034
Class S-2(10) Net WAC Cap Rate $ 2,900,000 May 2034
Class S-2(11) Net WAC Cap Rate $ 2,800,000 May 2034
Class S-2(12) Net WAC Cap Rate $ 2,800,000 May 2034
Class S-2(13) Net WAC Cap Rate $ 2,700,000 May 2034
Class S-2(14) Net WAC Cap Rate $ 2,700,000 May 2034
Class S-2(15) Net WAC Cap Rate $ 2,500,000 May 2034
Class S-2(16) Net WAC Cap Rate $ 2,500,000 May 2034
Class S-2(17) Net WAC Cap Rate $ 2,400,000 May 2034
Class S-2(18) Net WAC Cap Rate $ 2,400,000 May 2034
Class S-2(19) Net WAC Cap Rate $ 2,200,000 May 2034
Class S-2(20) Net WAC Cap Rate $ 2,000,000 May 2034
Class S-2(21) Net WAC Cap Rate $ 2,100,000 May 2034
56
Pass-Through Original Assumed Final
Class Rate Per Annum Principal Balance Maturity Date(1)
---------------- ------------------------- ----------------- ----------------
Class S-2(22) Net WAC Cap Rate $ 1,900,000 May 2034
Class S-2(23) Net WAC Cap Rate $ 1,900,000 May 2034
Class S-2(24) Net WAC Cap Rate $ 1,900,000 May 2034
Class S-2(25) Net WAC Cap Rate $ 1,800,000 May 2034
Class S-2(26) Net WAC Cap Rate $ 1,800,000 May 2034
Class S-2(27) Net WAC Cap Rate $ 1,700,000 May 2034
Class S-2(28) Net WAC Cap Rate $ 1,600,000 May 2034
Class S-2(29) Net WAC Cap Rate $ 1,600,000 May 2034
Class S-2(30) Net WAC Cap Rate $ 1,600,000 May 2034
Class S-2(31) Net WAC Cap Rate $ 1,600,000 May 2034
Class S-2(32) Net WAC Cap Rate $ 43,400,000 May 2034
(1) Solely for purposes of Treas. Reg. Sec. 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,
(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,
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(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 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
58
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.
(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
59
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 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
60
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 Minnesota UCC) in such
Contract and Manufactured Home, which security interest is prior to all
61
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, an 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 transfer the Contract
to the Seller. With respect to any Contract bearing a stamp indicating that
62
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 66 Step-up Rate Contracts included among
the Initial Contracts and 0 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. As of the Cut-off
Date, 58 of the Step-up Rate Contracts provide for two rate increases and the
remaining 8 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]
(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.
63
(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 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 ss. 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. Except in connection with one contract with a Scheduled
Principal Balance of $80,982.80, or 0.02% by Cut-off Date Principal Balance, no
Obligor obtained a prepaid single-premium credit life policy in connection with
the origination of the Contract.
(z) Section 32. Other than 3 Contracts with an aggregate Scheduled
Principal Balance of $260,884.70 or 0.05% of the Cut-off Date Pool Principal
Balance, 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 Closing Date with respect to each Initial and
Additional Contract and as of each Subsequent
64
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 $483,428,300.26. 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 $499,999,995.41.
(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; of the
Initial and Additional Contracts, the Obligors on not more than 10%
are located in any one state, the Obligors on not more than 0.41% are
located in an area with the same zip code
65
and the Obligors on not more than 0.13% 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 7 months or more than 360 months;
(iii) the final scheduled payment date on the Initial or Additional
Contract with the latest maturity is in March 2033;
(iv) of the Initial Contracts, approximately 68.10% (by Cut-off Date
Principal Balance) is attributable to loans to purchase new
Manufactured Homes and approximately 31.90% to used Manufactured
Homes; of the Initial and Additional Contracts, at least 68% is
attributable to loans to purchase new Manufactured Homes and not more
than 32% to used Manufactured Homes;
(v) no less than 27% 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 12.18% per annum;
(vii) at least 70% 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%;
(ix) no Initial Contract was originated before March 15, 1985 and no
Additional Contract was originated before August 22, 1991; and
(x) not more than 32% 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 12.18%;
(ii) the weighted average (by Cut-off Date Pool Principal Balance)
Loan-to-Value Ratio of the Contracts is not more than 87%;
(iii) not less than 68% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of new Manufactured Homes;
(iv) not more than 30% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of single-Section Manufactured
Homes, and not less than
66
70% of the Cut-off Date Pool Principal Balance is attributable to
loans for the purchase of double-Section Manufactured Homes;
(v) not less than 27% of the Cut-off Date Pool Principal Balance is
attributable to Land-and-Home Contracts;
(vi) not more than 32% 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 March 2033;
(viii) not more than 15% 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 22.01% 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 15% of the Cut-off Date Pool Principal Balance is
attributable to loans with a low side override.
(d) Staged-Funding Contracts. Approximately $7,016,996.24 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
$5,651,273.71 of such amount has been disbursed by the Closing Date, and
approximately $1,365,722.53 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.
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.
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(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.
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
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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 identifying the Originator as debtor
and naming the Seller as secured party and listing such Contracts as
collateral, and the Seller shall have delivered to the Trustee
evidence of filing of a UCC-1 financing statement identifying the
Seller as debtor and naming the Trustee as secured party and 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
(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
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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, 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
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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 September 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 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.
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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, and if it is other than the Originator, may, 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.
(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(xix). The Account shall be entitled
"U.S. Bank National Association,
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as Trustee for the benefit of holders of Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 2002-2."
(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.
(a) Subject to the terms and conditions of this Section the Trustee shall
act as Custodian to maintain custody of the Contract Files and the Land-and-Home
Contract Files for the benefit of the Certificateholders. 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
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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 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.
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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 Originator, as Servicer, and
after the Service Transfer the Trustee, 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
Originator, as Servicer, and after a Service Transfer the Trustee, 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 Backup Servicer. 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 the
Rating Agencies.
(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.
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 Originator, as Servicer, agrees to pay
all reasonable costs and disbursements in connection with the perfection and the
maintenance of
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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.
SECTION 5.04 Inspection; Computer Tape.
(a) At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records,
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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 2002-2 (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 all 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.
The Trustee may trade with itself or an Affiliate in the purchase or sale
of such Eligible Investments.
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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,
▇▇▇▇▇'▇ 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, the Servicer and the Backup 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 ▇▇▇ 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 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.
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(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 or deferral of payments
due under such Contract, provided that
(i) Obligors may not be solicited for extensions,
(ii) no such extension may be extended beyond the Maturity Date of the
Certificate with the latest maturity, as specified in Section 2.05(b),
and
(iii) all re-aging, extensions, deferrals, renewals and re-writes of
Contracts must be pursuant to a set of written servicing guidelines
that comply with the Retail Credit Classification and Account
Management Policy of the Federal Financial Institutions Examination
Counsel, published in 65 Fed. Reg. 36903 (June 12, 2000).
(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
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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 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 for any
Liquidation Expense not in excess of the Related Proceeds pursuant to Section
8.02(iii). The Servicer shall not incur any Liquidation Expense unless it
determines in its good faith business judgment that (i) incurring such expense
will increase the Net Liquidation Proceeds on the related Contract, and (ii)
that the Liquidation Expense, if incurred, would not constitute a
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Non-Recoverable Liquidation Expense. Any Liquidation Expense previously incurred
by the Servicer that is determined by the Servicer to have become a
Non-Recoverable Liquidation Expense shall be reported on the related Monthly
Report. The Trustee shall not be responsible for determining whether any such
determination was reasonable.
SECTION 5.09 Maintenance of Insurance.
(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
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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 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. 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.
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(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.
(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 Originator, as Servicer, makes the
following representations, warranties and covenants on which the Trust relies in
accepting the Contracts and issuing the Certificates. The following
representations and warranties will not be made or affirmed by any successor
Servicer, including without limitation, the Backup Servicer, and notwithstanding
anything herein such successor Servicers will not be liable for any breach of
the following representations and warranties.
(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
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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 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, ▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. 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.
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(i) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Contract, except in accordance with Section 5.06.
SECTION 5.14 Advance Facility.
(a) The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility"), the documentation for
which complies with Section 5.14(e) below, under which (1) the Servicer assigns
or pledges its rights under this Agreement to be reimbursed for any or all
Liquidation Expenses incurred by it as to which it is entitled to reimbursement
pursuant to Section 8.02(iii) (a "Servicer Expense Advance") to a
special-purpose bankruptcy-remote entity (an "SPV"), which in turn, directly or
through other assignees and/or pledgees, assigns or pledges such rights to a
Person, which may include a trustee acting on behalf of holders of debt
instruments (any such Person, an "Advance Financing Person"), and/or (2) an
Advance Financing Person agrees to fund some or all Servicer Expense Advances
required to be incurred by the Servicer pursuant to this Agreement. No consent
of the Trustee, Certificateholders or any other party is required before the
Servicer may enter into an Advance Facility. Notwithstanding the existence of
any Advance Facility under which an Advance Financing Person agrees to fund
Servicer Expense Advances on the Servicer's behalf, the Servicer shall remain
obligated pursuant to this Agreement to incur Liquidation Expenses pursuant to
and as required by this Agreement, and shall not be relieved of such obligations
by virtue of such Advance Facility. If the Servicer enters into an Advance
Facility, and for so long as an Advance Financing Person remains entitled to
receive reimbursement for any Servicer Expense Advances incurred and previously
unreimbursed pursuant to this Agreement, then the Trustee shall not reimburse
the Servicer for Servicer Expense Advances pursuant to Section 8.02(iii), but
instead the SPV, as the Servicer's assignee and designee (the "Servicer's
Assignee"), and the Advance Financing Person, as the pledgee and assignee of the
Servicer's Assignee, shall have the right to receive out of the Certificate
Account collections that the Servicer would otherwise have the right to receive
from the Certificate Account, pursuant to Section 8.02(iii), amounts available
to reimburse previously unreimbursed Servicer Expense Advances ("Reimbursement
Amounts"). Notwithstanding anything to the contrary herein, in no event shall
Reimbursement Amounts related to Liquidation Expenses that have been recovered
out of Related Proceeds be included in the Amount Available, and in no event
shall any Reimbursement Amount be distributed to Certificateholders.
(b) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Trustee a written notice
of the existence of such Advance Facility (an "Advance Facility Notice"),
stating the identity of the Advance Financing Person and the related Servicer's
Assignee, and specifying what Servicer Expense Advances are owned by the Advance
Facility. An Advance Facility may only be terminated by the joint written
direction of the applicable Servicer and the related Advance Financing Person.
Once an Advance Facility Notice has been delivered to the Trustee, and until a
joint written direction that the Advance Facility has been terminated is
delivered to the Trustee, no amendment to this Agreement may be made without the
prior written consent of the Advance Financing Person unless a transfer of
servicing has occurred pursuant to Article VII and the Advance Finance Person
related to the prior Servicer has recovered all Servicer Expense Advances.
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(c) Reimbursement Amounts shall consist solely of amounts in respect of
Servicer Expense Advances incurred in connection with the liquidation of
Contracts for which the Servicer would be permitted to be reimbursed in
accordance with Section 8.02(iii), assuming the Servicer had incurred the
related Servicer Expense Advances.
(d) An Advance Financing Person who receives an assignment or pledge of
rights to receive Reimbursement Amounts and/or whose obligations hereunder are
limited to the funding of Servicer Expense Advances shall not be required to
meet the criteria for qualification as an Eligible Servicer.
(e) The documentation establishing any Advance Facility shall require that
Reimbursement Amounts be allocated to outstanding unreimbursed Servicer Expense
Advances on a "first-in, first out" ("FIFO") basis. In the event that, as a
result of this FIFO allocation, some or all of a Reimbursement Amount related to
Servicer Expense Advances were made by a Person other than Conseco Finance Corp.
or the Advance Financing Person, then the Servicer's Assignee shall be required
to remit any portion of such Reimbursement Amount to each person entitled to
such portion of such Reimbursement Amount. At any time when the Advance
Financing Person shall have ceased funding Servicer Expense Advances, including
without limitation upon a servicing transfer pursuant to Article VII, and the
Trustee shall have withdrawn from the Certificate Account, and remitted to the
Advance Financing Person, Reimbursement Amounts sufficient to reimburse all
Servicer Expense Advances, the right to reimbursement for which was assigned to
the Servicer's Assignee and pledged and assigned to the Advance Financing
Person, then the Servicer's Assignee and the Advance Financing Person and the
Servicer shall deliver a written notice to the Trustee terminating the Advance
Facility Notice, whereupon the applicable Servicer shall again be entitled to
payment of the related Reimbursement Amounts pursuant to Section 8.02(iii).
Without limiting the generality of the foregoing, the Servicer shall remain
entitled to reimbursement from the Servicer's Assignee and/or the Advance
Financing Person for all Servicer Expense Advances funded by the Servicer to the
extent the related Reimbursement Amount(s) have not been assigned or pledged to
an Advance Financing Person or related Servicer's Assignee. By way of
illustration, and not by way of limiting the generality of the foregoing, if a
Servicer who is a party to an Advance Facility resigns or is terminated, and is
replaced by a successor Servicer, and the successor Servicer directly incurs
Servicer Expense Advances with respect to a Contract and does not assign or
pledge the related Reimbursement Amounts to an Advance Financing Person, then
after all Reimbursement Amounts attributable to that Contract that are owed to
the predecessor Servicer and the related Advance Financing Person, which were
made prior to any Servicer Expense Advances made by the successor Servicer, have
been reimbursed in full, then the successor Servicer shall be entitled to
receive all Reimbursement Amounts subsequently collected with respect to that
Contract.
(f) The parties hereto acknowledge that Conseco Finance Corp., as Servicer,
intends to assign, convey and transfer of its rights to reimbursement pursuant
to Section 8.02(iii) to Conseco Finance Liquidation Expense Advance Receivables
2002-B Corp., which will in turn assign its right to receive Reimbursement
Amounts to U.S. Bank National Association, as Trustee (the "Advance Facility
Trustee") under the Indenture (the "Advance Facility Indenture") dated as of
April 1, 2002, by and among Conseco Finance Liquidation Expense Advance
86
Receivables 2002-B Corp., as issuer, U.S. Bank National Association as trustee,
verification agent and paying agent, and Conseco Finance Corp., individually and
as servicer of the Qualified Trusts (as defined in the Advance Facility
Indenture). If such an assignment occurs, the Advance Facility Trustee shall be
entitled to payment of Reimbursement Amounts pursuant to Section 8.02(iii), and
will be the Advance Financing Person for purposes of the other provisions of
this Section 5.14 with respect to an Advance Facility described in this Section
5.14. The parties hereto further agree that any rights of set-off that the
Trustee or the Trust may otherwise have against Conseco Finance Corp. or the
Servicer hereunder shall not attach to any rights to be reimbursed for Servicer
Expense Advances that have been sold, transferred, conveyed and otherwise
assigned to Conseco Finance Liquidation Expense Advance Receivables 2002-B Corp.
and pledged and assigned to the Advance Facility pursuant to the Advance
Facility Indenture. The parties hereto further covenant and agree that this
Section 5.14(f) may not be amended or otherwise modified without the prior
written consent of 100% of the holders of the notes issued pursuant to the
Advance Facility Indenture, unless and until such notes shall have been paid in
full or the Advance Facility Indenture shall have been discharged and
terminated.
Section 5.15 Backup Servicer.
(a) Appointment Period. Any time during the period beginning on the Closing
Date and ending on the earliest of (a) the date on which the Class Principal
Balance of all Certificates then rated by Standard & Poor's has been reduced to
zero, (b) the date on which Conseco Finance Corp., if then the Servicer,
delivers to the Trustee and the Backup Servicer, with a copy to the Rating
Agencies, written evidence that its long-term debt rating by Standard & Poor's
is "BBB-" or higher, and (c) the date on which Standard & Poor's notifies the
Trustee, Conseco Finance Corp. and the Backup Servicer that Standard & Poor's no
longer requires a backup servicer (such period, the "Appointment Period"), the
Trustee may appoint the Backup Servicer as the successor Servicer, subject to
the terms of this Agreement. Upon the appointment by the Trustee of the Backup
Servicer as successor Servicer, the Backup Servicer shall deliver such written
evidence of its acceptance of appointment as successor Servicer as the Trustee
shall reasonably require. During the Appointment Period, the Backup Servicer
shall be paid the Backup Servicing Fee in accordance with Section 8.03 of this
Agreement.
(b) Transfer of Servicing. Within 60 calendar days of receipt of notice
from the Trustee of such appointment, the Backup Servicer shall assume the
duties of Servicer under this Agreement, at which time the Backup Servicer shall
succeed to all rights of the Servicer under this Agreement, including the right
to the Monthly Servicing Fee. The Backup Servicer shall be reimbursed under
Section 8.03(a)(i) for any and all costs and expenses incurred by it in and
related to the transfer of servicing to the Backup Servicer under this
Agreement. Such costs and expenses include, without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Backup Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Backup Servicer to service the Contracts
properly and effectively.
(c) Initial Information. Conseco Finance Corp. has delivered to the Backup
Servicer a complete data file for each Contract, collateral and Certificate
cashflows, price and yield information for each Class of Certificates,
collateral modeling assumptions, tax treatment of the
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collateral and each Class of Certificates, and such other initial information as
the Backup Servicer has requested.
(d) Monthly Information. On each Remittance Date beginning with the
Remittance Date in July 2002, Conseco Finance Corp. shall deliver to the Backup
Servicer the then-current Data. The Backup Servicer shall promptly notify the
Trustee, Conseco Finance Corp. and the Rating Agencies if the Backup Servicer
does not receive the Data from Conseco Finance Corp. each month during the
Appointment Period or if the Backup Servicer determines that the Data received
by it is not sufficient to enable it to act as Servicer. Except as provided in
the foregoing sentence, unless and until the Backup Servicer becomes the
Servicer, the Backup Servicer will have no obligations with respect to servicing
data received by it, nor any reporting obligations. If the Backup Servicer
determines it reasonably requires additional information to enable it to assume
the duties of Servicer, it will notify Conseco Finance Corp., the Trustee and
the Rating Agencies of such additional required information and thereafter the
"Data" to be delivered under this Section 5.15(d) shall include such additional
information; provided that Conseco Finance Corp. shall have a reasonable time to
take such action as may reasonably be required to enable it to furnish such
additional information on a monthly basis.
(e) Quarterly and Annual Information. Conseco Finance Corp. will provide to
the Backup Servicer, on a quarterly basis, copies of all Form 1099 and Form 1066
filings, and, on an annual basis, copies of all Form 1099 and Schedule Q
filings.
(f) Periodic Inspection. During the Appointment Period, Conseco Finance
Corp. will permit the Backup Servicer, upon reasonable notice and during normal
working hours, to perform periodic, on-site due diligence reviews of Conseco
Finance Corp.'s performance of its obligations as Servicer and to review all
records in the custody of Conseco Finance Corp. relating to the Contracts. The
Backup Servicer will conduct all such reviews in a manner which does not
unreasonably interfere with the normal operations of Conseco Finance Corp. or
customer or employee relations. The Backup Servicer will be entitled to
reimbursement for all reasonable expenses incurred with regard to such
inspections under Section 8.03(a)(i). Without otherwise limiting the scope of
the examination that the Backup Servicer may make, the Backup Servicer may,
using generally accepted auditing procedures, verify the status of each Contract
and review the Electronic Ledger and records relating thereto for (i) conformity
to the servicing records provided pursuant to Section 5.15(c) and (ii)
compliance with the representations in this Agreement regarding the Contracts.
If Conseco Finance Corp. in any way materially changes its servicing system or
reporting format, it will promptly notify the Backup Servicer.
(g) Confidentiality. The Backup Servicer agrees to hold any servicing
information in confidence and to disclose such information only as required by
this Agreement, applicable law or as necessary in the course of prudent
servicing practices.
(h) Representations. The Backup Servicer represents and warrants to Conseco
Finance Corp. and the Trustee that:
(i) The Backup Servicer is a national banking association;
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(ii) The execution and delivery of this Agreement by the Backup Servicer
and its performance of and compliance with the terms of this Agreement
will not violate the Backup Servicer's charter or by laws or
constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other instrument
to which the Backup Servicer is a party or which may be applicable to
the Backup Servicer or any of its assets;
(iii) The Backup Servicer has the power and authority to enter into and
consummate all transactions contemplated by this Agreement and has
duly authorized the execution, delivery and performance of this
Agreement. This Agreement, assuming due authorization, execution and
delivery by Conseco Finance Corp. and the Trustee, constitutes a
valid, legal and binding obligation of the Backup Servicer,
enforceable against it in accordance with the terms hereof, except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) The Backup Servicer is not in violation of, and the execution and
delivery of this Agreement by the Backup Servicer and its performance
and compliance with the terms of this Agreement will not constitute a
violation with respect to, any order or decree of any court or any
order or regulation of any federal, state, municipal or governmental
agency having jurisdiction, which violation would materially and
adversely affect the condition (financial or otherwise) or operations
of the Backup Servicer or materially and adversely affect the
performance of the Backup Servicer' duties hereunder;
(v) There are no actions or proceedings against, or investigations of, the
Backup Servicer pending, or, to the knowledge of the Backup Servicer,
threatened, before any court, administrative agency or other tribunal
that, if determined adversely, in the opinion of the Backup Servicer,
would prohibit or materially and adversely affect the performance by
the Backup Servicer of its obligations under, or the validity or
enforceability of, this Agreement against the Backup Servicer;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Backup Servicer of, or compliance by the Backup
Servicer with, this Agreement, or for the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders, if any, that have been obtained
prior to the Closing Date; and
(vii) The Backup Servicer or an affiliate is duly licensed or otherwise
qualified in each state to the extent required to perform its
obligations hereunder, and the Backup Servicer or an affiliate is an
FHLMC-approved servicer.
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(i) Financial Statements. If at any time the corporate parent of the Backup
Servicer ceases to be a reporting company under the Securities Exchange Act of
1934, as amended, the Backup Servicer will thereafter deliver to Standard &
Poor's its, and its corporate parent's quarterly financial statements, in a form
reasonably satisfactory to Standard & Poor's, within 45 days after the end of
each calendar quarter occurring during the Appointment Period.
(j) Limitation of Liability. The Backup Servicer, as Servicer, shall have
no liability for errors in allocating collections, as required by Section
3.06(c)(3), or withholding tax as required by Section 3.07, provided that no
provision of this Agreement shall be construed to relieve the Backup Servicer
from liability for its own negligence.
(k) Successor Backup Servicer. The Backup Servicer may at any time resign
and be discharged from its obligations under this Agreement, provided that a
successor Backup Servicer acceptable (as evidenced in writing) to the Rating
Agencies shall have executed and delivered to the Servicer, the Originator, and
the predecessor Backup Servicer, an instrument accepting such appointment and
agreeing to be bound by the terms of this Agreement. Upon such acceptance, the
resignation of the predecessor Backup Servicer shall become effective. The
predecessor Backup Servicer shall cooperate in effecting the transfer of its
obligations to the successor.
(l) Termination. All rights and obligations of the Backup Servicer under
this Agreement shall terminate upon the expiration of the Appointment Period.
ARTICLE VI
REPORTS AND TAX MATTERS
SECTION 6.01 Monthly Reports.
(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), the Backup Servicer (if the Backup Servicer is not the
Servicer) and the Rating Agencies a "Monthly Report," substantially in the form
of Exhibit M hereto, or such other form as shall disclose the information
required by this Agreement.
(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
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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
or ▇▇▇▇▇'▇, or a Certificateholder, furnish the Trustee and/or Standard & Poor's
or ▇▇▇▇▇'▇, 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, 2003, the Servicer, if the Originator, 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 require 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.
(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 Certificates allocable
to interest, separately identifying any Unpaid Class A, Class A-IO,
Class M-1, Class M-2 and Class B Interest Shortfall included in such
distribution, any remaining Unpaid Class A, Class A-IO, Class M-1,
Class M-2 and Class B Interest Shortfall after giving effect to such
distribution, any Class M-1, Class M-2 and Class B-1 Liquidation Loss
Interest Amount and any Unpaid Class M-1, Class M-2 and Class B-1
Liquidation Loss Interest Shortfall remaining;
(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,
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Class M-1, Class M-2 and Class B Principal Shortfall after giving
effect to such distribution;
(iii) the Class Principal Balance for each Class of Certificates and the
Class A-IO Notional Principal Amount, and the Class M-1, Class M-2 and
Class B-2 Adjusted Principal Balance, after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class A, Class M-1, Class M-2 and Class B 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);
(xiii) the Weighted Average Contract Rate, the Net WAC Cap Rate and the
Adjusted Net WAC Cap Rate;
(xiv) the Class M-1, Class M-2 and Class B-1 Interest Deficiency Amount, if
any, for such Remittance Date;
(xv) the Overcollateralization Amount, if any, for such Remittance Date;
(xvi) Servicer Advances for such Remittance Date and Liquidation Expenses
not in excess of Related Proceeds;
(xvii) [RESERVED];
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(xviii) the Additional Principal Distribution Amount, if any, to be
distributed on such Remittance Date pursuant to Section 8.03(a)(xiv);
and
(xix) the Class B-3I Formula Distribution Amount and Class B-3I
Distribution Amount for such Remittance Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts distributed in respect of principal interest shall be
expressed as a dollar amount per Certificate with a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year, 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 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) Copies of all reports provided to the Trustee for the
Certificateholders shall also be provided to the Rating Agencies 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.
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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 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,
subject to the last sentence of this Section 7.01:
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(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 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, so long as the Originator acts as the Servicer, (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 ▇▇▇▇▇'▇ is
not then "Baa3" or higher, and
(A) if such Remittance Date occurs between July 1, 2002 and June 30,
2003, 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 July 1, 2003 and June 30,
2004, 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 July 1, 2004 and June 30,
2005, 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 July 1, 2005 and June 30,
2006, 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 July 1, 2006 and June 30,
2007, 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 July 1, 2007 and June 30,
2008, the Cumulative Realized Losses as of such Remittance Date
are greater than 13.50% of the Cut-off Date Pool Principal
Balance;
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(G) if such Remittance Date occurs between July 1, 2008 and June 30,
2009, the Cumulative Realized Losses as of such Remittance Date
are greater than 14.25% of the Cut-off Date Pool Principal
Balance;
(v) if, so long as the Originator acts as the Servicer, (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
▇▇▇▇▇'▇ is then "Baa3" or higher, and
(A) if such Remittance Date occurs between July 1, 2002 and June 30,
2003, 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 July 1, 2003 and June 30,
2004, 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 July 1, 2004 and June 30,
2005, 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 July 1, 2005 and June 30,
2006, 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 July 1, 2006 and June 30,
2007, 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 July 1, 2007 and June 30,
2008, 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 July 1, 2008 and June 30,
2009, 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;
(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
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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 (if other than the Backup Servicer) to
be an Eligible Servicer.
Any "Termination Event" that occurs while the Originator is the Servicer
and results in appointment of the Backup Servicer as the Servicer shall cease to
be a Termination Event upon the acceptance of the appointment by the Backup
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 the Backup Servicer (and to the Trustee if given by the
Certificateholders) may terminate all (but not less than all) of the Servicer's
management, administrative, servicing and collection functions (such termination
being herein called a "Service Transfer"). Upon a Service Transfer during the
Appointment Period, the Trustee may appoint the Backup Servicer as the successor
Servicer. On the Servicer's receipt of such notice from the Trustee or
Certificateholders (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 Backup Servicer,
if appointed as the primary Servicer during the Appointment Period, and
otherwise the Trustee, pursuant to and under this Section 7.02; and, without
limitation, the Backup Servicer or the Trustee or its designee, as appropriate,
is authorized and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments
(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 Backup Servicer or 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 promptly transfer to the new servicer
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(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.
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 Backup
Servicer, following its appointment, or the Trustee, as applicable, 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 neither the Trustee nor the Backup
Servicer (i) shall assume any obligations of the Originator pursuant to Section
3.06 or (ii) shall 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; and
provided further that no removal or resignation of the Servicer shall become
effective until the Backup Servicer, a successor Servicer or the Trustee, as
applicable, shall have assumed the Servicer's responsibilities and obligations.
As compensation therefor, the Backup Servicer shall be entitled to the Monthly
Servicing Fee and Backup Servicing Fee, or to the extent that the Trustee
assumes the servicing responsibilities, 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 and the
Backup Servicer shall be unwilling so to act, or shall, if it and the Backup
Servicer are legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, an Eligible Servicer as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. Pending appointment of a successor to
the Servicer hereunder, unless the Trustee is prohibited by law from so acting,
the Trustee shall act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on 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,
the Backup Servicer 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.
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(c) The Trustee shall give written notice to the Rating Agencies at least
30 days prior to the date upon which the Backup Servicer or 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.
(a) 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.
(b) 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 new Servicer shall have all of such
obligations, except that
(i) the Backup Servicer shall have no responsibility or obligation for any
act or omission of the replaced Servicer, and
(ii) 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.
(c) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Originator pursuant to Article X and Sections 3.06, 11.06 and 11.11(f))
other than those relating to the management, administration, servicing or
collection of the Contracts.
SECTION 7.08 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 A-IO
Certificates, Class M Certificates, or Class B Certificates with an aggregate
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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 Registrar, 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 A-IO, Class M, and Class B
Certificates as set forth in Exhibits ▇-▇, ▇-▇, 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 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇, 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) only on a Remittance Date, prior to the Trustee's remittance of the
Amount Available pursuant to Section 8.03, to pay to the Servicer, the
Servicer's Assignee
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or the Advance Financing Person, as appropriate, the amount of any
Liquidation Expenses as to which Related Proceeds, net of all
Liquidation Expenses previously reimbursed pursuant to this Section
8.02(iii) with respect to the related Contract, exceed such
Liquidation Expenses;
(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), but not out of collections in respect of
any Contract that constitute Related Proceeds, to the extent a
Liquidation Expense has been paid by the Servicer with respect to that
Contract which has not yet been reimbursed.
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 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) to the Servicer the Monthly Servicing Fee and any other compensation
owed to the Servicer pursuant to Sections 7.03 and 11.05; to the
Backup Servicer, the Backup Servicing Fee and any other fees, expenses
or indemnification (subject to the limitations contained in Section
10.01) owed to the Backup Servicer pursuant to this Agreement;
provided that no amounts paid to the Backup Servicer under this
Section 8.03(a)(i) in respect of indemnification shall exceed $100,000
in any calendar year or $1,000,000 in the aggregate; and to the
Trustee, any fees incurred by it under Section 4.02 and 4.05;
(ii) after payment of the amount specified in clause (i) 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; 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
Certificates 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;
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(iii) after payment of the amounts specified in clauses (i)-(ii) 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;
(iv) after payment of the amounts specified in clauses (i)-(iii) 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;
(v) after payment of the amounts specified in clauses (i)-(iv) 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;
(vi) after payment of the amounts specified in clauses (i)-(v) 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 and Class
A-2 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-2
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; and
(2) to the Class A-2 Certificateholders, but in no event more
than the Class A-2 Principal Balance;
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(vii) after payment of the amounts specified in clauses (i)-(vi) 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-2
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;
(C) any Class M-1 Liquidation Loss Interest Amount;
(D) any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
(viii) after payment of the amounts specified in clauses (i)-(vii) 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;
(ix) after payment of the amounts specified in clauses (i)-(viii) 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;
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(x) after payment of the amounts specified in clauses (i)-(ix) 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 B-2 Principal Shortfall;
(D) 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);
(xi) after payment of the amounts specified in clauses (i)-(x) 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 a total of
$12,500,000 has been paid pursuant to this clause (xi)(A); and
(B) on each Additional Principal Payment Date (as defined in Section
8.05(e)), 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 (sequentially, beginning with Class A-1);
(xii) after payment of the amounts specified in clauses (i) to (xi) above,
to the Backup Servicer any indemnification owed to it and unreimbursed
under Section 8.03(a)(i);
(xiii) after payment of the amounts specified in clauses (i)-(xii) above,
the Class B-3I Distribution Amount to the Class B-3I
Certificateholders;
(xiv) after payment of the amounts specified in clauses (i) -(xiii) above,
to reimburse the Class C Certificateholders for expenses incurred by
and reimbursable to them pursuant to Section 10.06; and
(xv) after payment of the amounts specified in clauses (i)-(xiv) above, any
remaining funds to the Class C Master Certificateholders.
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(b) On each Remittance Date, the Uncertificated Intermediate Interests (or
other appropriate interest or account as the context implies) 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) the Class
A-IO Remittance Rate multiplied by the sum of the Subsidiary
Interest Adjusted Principal Balance of the (1) Class S-2(1)
Interest through and including the September 2002 Remittance
Date, (2) Class S-2(2) Interest through and including the
December 2002 Remittance Date, (3) Class S-2(3) Interest through
and including the March 2003 Remittance Date, (4) Class S-2(4)
Interest through and including the June 2003 Remittance Date, (5)
Class S-2(5) Interest through and including the September 2003
Remittance Date, (6) Class S-2(6) Interest through and including
the December 2003 Remittance Date, (7) Class S-2(7) Interest
through and including the March 2004 Remittance Date, (8) Class
S-2(8) Interest through and including the June 2004 Remittance
Date, (9) Class S-2(9) Interest through and including the
September 2004 Remittance Date, (10) Class S-2(10) Interest
through and including the December 2004 Remittance Date, (11)
Class S-2(11) Interest through and including the March 2005
Remittance Date, (12) Class S-2(12) Interest through and
including the June 2005 Remittance Date, (13) Class S-2(13)
Interest through and including the September 2005 Remittance
Date, (14) Class S-2(14) Interest through and including the
December 2005 Remittance Date, (15) Class S-2(15) Interest
through and including the March 2006 Remittance Date, (16) Class
S-2(16) Interest through and including the June 2006 Remittance
Date, (17) Class S-2(17) Interest through and including the
September 2006 Remittance Date, (18) Class S-2(18) Interest
through and including the December 2006 Remittance Date, (19)
Class S-2(19) Interest through and including the
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March 2007 Remittance Date, (20) Class S-2(20) Interest through
and including the June 2007 Remittance Date, (21) Class S-2(21)
Interest through and including the September 2007 Remittance
Date, (22) Class S-2(22) Interest through and including the
December 2007 Remittance Date, (23) Class S-2(23) Interest
through and including the March 2008 Remittance Date, (24) Class
S-2(24) Interest through and including the June 2008 Remittance
Date, (25) Class S-2(25) Interest through and including the
September 2008 Remittance Date, (26) Class S-2(26) Interest
through and including the December 2008 Remittance Date, (27)
Class S-2(27) Interest through and including the March 2009
Remittance Date, (28) Class S-2(28) Interest through and
including the June 2009 Remittance Date, (29) Class S-2(29)
Interest through and including the September 2009 Remittance
Date, (30) Class S-2(30) Interest through and including the
December 2009 Remittance Date, (31) Class S-2(31) Interest
through and including the March 2010 Remittance Date, (32) Class
S-2(32) Interest through and including the June 2010 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 (ii) 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 (or
other appropriate interest or account as the context implies) 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 to the Servicer, the Backup Servicer and the trustee of the
amounts 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)
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1/12 of the Net WAC Cap 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(32) 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 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 $169,350,000;
(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 $106,350,000;
(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 $76,350,000;
(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 $3,758,265;
(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 $2,147,850; and
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(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 $1,125,000.
(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.
(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].
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, 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).
(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 Original Principal Balance of the Certificates, (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
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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 deposit the balance of the
purchase price in the Certificate Account for distribution in accordance with
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 Original Principal Balance of the Certificates, to the effect that
the Pool Scheduled Principal Balance is then less than or equal to 10% of the
Original Principal Balance of the Certificates.
(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 (b), 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)(xi).
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 2002-2." The Trustee shall maintain within the Pre-
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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 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 any
REMIC. The Trustee on behalf of the Trust shall be the legal owner of the
Pre-Funding Account. The Seller shall be the beneficial owner of the Pre-Funding
Account, subject to the foregoing power of the Trustee to transfer amounts in
the Pre-Funding Account to the Certificate Account. Funds in the Pre-Funding
Account shall, at the direction of the Servicer, be invested in Eligible
Investments of the kind described in clauses (i) and (ii)(A) of the definition
of "Eligible Investment" and that mature no later than the Business Day prior to
the next succeeding
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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.
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 $46,250,000 initial
aggregate principal balance,
(ii) one or more Class A-2 Certificates representing $300,000,000 initial
aggregate principal balance,
(iii) one or more Class A-IO Certificates representing $117,700,000
Original Notional Principal Amount,
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(iv) one or more Class M-1 Certificates representing $38,750,000 initial
aggregate principal balance,
(v) one or more Class M-2 Certificates representing $28,750,000 initial
aggregate principal balance,
(vi) one or more Class B-1 Certificates representing $28,750,000 initial
aggregate principal balance,
(vii) one or more Class B-2 Certificates representing $18,750,000 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, the
Backup Servicer and the Servicer of any change in the Certificate Registrar.
(b) The provisions of this Subsection (b) also apply with respect to any
transfers of Certificates.
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(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) no Class C Certificate, nor any interest therein, shall be
transferred, sold or otherwise disposed of to:
(i) an entity making an election under Section 775 of the Code,
(ii) any individual, corporation, partnership or other entity
which is not a "United States Person: (as such term is
defined in Section 7701(a)(30) of the Code; or
(iii) a "disqualified organization" within the meaning of Section
860E(e)(5) of the Code, including, but not limited to (x)
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, (y) an
organization (other
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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 (z) a
cooperative described in Section 1381(a)(2)(C) of the Code
(each such individual, corporation, entity or organization
described in this Section 9.02(b)(3)(A) hereinafter a
"Disqualified Organization"); and
(B) prior to any registration of any transfer, sale or other
disposition of any Class C 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
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on such Certificate, and shall be deemed to have no interest
whatsoever in such Certificate.
(5) The Trustee shall give notice to the Rating Agencies 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
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representing such Certificate Owner. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(e) If
(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
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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."
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 Backup Servicer, the Seller,
the Trustee, the Certificate Registrar, the Paying Agent or any agent of the
Servicer, the Backup 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
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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 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 Backup Servicer and the Certificateholders, or their respective
Affiliates, officers, directors, employees or agents, against any and all costs,
expenses, losses, damages, claims, actions, judgments, suits and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation of
any third-party claims
(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);
(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; or
(iii) with respect to the Backup Servicer (whether then acting as Backup
Servicer or Servicer), arising out of actions taken or not taken by
the Backup Servicer, its Affiliates, officers, directors, employees or
agents under this Agreement, unless such action or inaction
constitutes a breach of this Agreement.
Notwithstanding any other provision of this Agreement, the obligation of the
Originator under this Section shall not terminate upon a Service Transfer
pursuant to Article VII, except that the obligation of the Originator under this
Section shall not relate to the actions of the Backup Servicer or any other
subsequent Servicer after a Service Transfer. To the extent the Seller and
Originator fail to indemnify the Backup Servicer or its Affiliates, officers,
directors, employees
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or agents for any amounts due under this Section 10.01 within 15 Business Days
of written demand for such indemnification hereunder, the Backup Servicer or its
Affiliates, officers, directors, employees or agents will be entitled to the
payment of such amounts under Section 8.03(a) of this Agreement.
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) the Backup Servicer 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 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, the Backup 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 Backup Servicer 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, the Backup Servicer or the Certificateholders pursuant
to this Article and the Trustee thereafter collects any of such amounts from
others, they will repay such amounts collected to the Originator or the
Servicer, as the case may be, without interest.
SECTION 10.06 REMIC Tax Matters. If a Class 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
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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.
SECTION 10.07 Limitation of Liability. In no event shall the Backup
Servicer be liable for any consequential, incidental or punitive damages.
ARTICLE XI
THE TRUSTEE
SECTION 11.01 Duties of Trustee. The Trustee, prior to the occurrence of an
Event of Termination and after the curing of all Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform 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
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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, the Servicer or the
Backup 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.
(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,
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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, if the Originator, 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 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
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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).
(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,
provided that, if for any Remittance Date the Originator is not the Servicer,
the obligations of the Servicer under this Section 11.05 shall be limited to the
funds remaining after distributions under Section 8.03(a)(i) (without taking
into account any amounts to be reimbursed to the Backup Servicer under this
Section 11.05) for that Remittance Date. 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. If any entity other than the Originator or a
subsidiary or affiliate of the Originator is the Servicer, the Servicer shall be
reimbursed for any costs and expenses incurred by it in this Section 11.05
pursuant to Section 8.03(a)(i).
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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 ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇)
of at least Baa3, or as shall be otherwise acceptable to ▇▇▇▇▇'▇ 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 the Rating Agencies. Upon receiving such notice of resignation,
the Originator shall promptly appoint a successor Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to each of the
Servicer, the Backup Servicer and the Originator and one copy to the successor
Trustee. If no successor Trustee shall have been so appointed and shall have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.06 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 Backup Servicer and
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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 the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall promptly notify the Rating Agencies in the event it is a party to
any merger, conversion or consolidation.
SECTION 11.10 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. ss. 433) as amended from time to time. The Trustee and Originator
agree to the provisions set forth below.
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(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.
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:
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(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.
The Backup Servicer will not have any obligation to exercise any rights
under this Section 11.12 and will have no liability upon the exercise or
non-exercise of its rights under this Section 11.12.
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 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.
(a) 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
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to receive all or any portion of the Monthly Servicing Fee payable to it. The
Originator as Servicer, shall not resign from the obligations and duties hereby
imposed on it except upon determination that the performance of its duties
hereunder is no longer permissible under 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 and the Backup Servicer. No such resignation shall
become effective until the Backup Servicer, 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.
(b) 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 the Rating Agencies of any such merger to which it is a
party.
(c) 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, unless
the Backup Servicer is then acting as Servicer. The Servicer shall promptly
notify the Rating Agencies of any such acquisition.
(d) 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.
(e) The Backup Servicer, if it is the Servicer, may delegate some or all of
its servicing duties to a wholly-owned subsidiary of its ultimate corporate
parent for so long as said subsidiary remains, directly or indirectly, a
wholly-owned subsidiary of its ultimate corporate parent . Notwithstanding any
such delegation, the Backup Servicer 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. ▇▇▇▇, 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 purposes is located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇.
The Trustee will give prompt written notice to the Originator, the Seller, the
Backup Servicer and the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 12.03 Termination.
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(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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late Ambassador of the United States to the Court of St. ▇▇▇▇▇, 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.
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
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(i) as to Class A and Class A-IO Certificates, the Class A Principal
Balance or Class A-IO Notional Balance, as appropriate, together with
any Unpaid Class A Interest Shortfall or Unpaid Class A-IO Interest
Shortfall and one month's interest at the related Remittance Rate on
the related Class Principal Balance or Class A-IO Notional Balance, as
appropriate (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.
(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
130
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.
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
131
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 the Rating
Agencies 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, ▇▇▇▇▇'▇, 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 A-IO 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
(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,
132
(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 and the Backup Servicer 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, the Backup Servicer 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.
(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
133
(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) This Agreement shall not be amended without the consent of the Backup
Servicer if such amendment would result in a change in the provisions of this
Agreement pertaining to the Backup Servicer or any successor Servicer.
(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 Backup 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
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Originator or Servicer:
Conseco Finance Corp.
1100 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
134
If to the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Backup Servicer:
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Conseco 2002-2
If to Standard & Poor's:
Standard & Poor's Rating Services,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Backed Securities, Surveillance Group
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Moody's:
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Financing, Manufactured Housing
Surveillance Group
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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.
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.
135
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.
136
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this _____
day of June, 2002.
CONSECO FINANCE CORP.
By:
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and Assistant Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and Assistant Treasurer
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely
as Trustee
By:
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Vice President
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
137
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] No.
(Senior)
Remittance Rate: The lesser of (i) [2.477]
Cut-off Date: as defined in the [6.030]% and (ii) the Adjusted Net WAC Cap
Pooling and Servicing Agreement Rate]
dated as of June 1, 2002
Denomination: $1,000
First Remittance Date:
July 1, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ of
All Class [A-1][A-2] 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 2002-2, CLASS [A-1][A-2] (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 2002-2 (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 June 1, 2002, among Conseco Finance
Corp., as Originator and as the initial Servicer (the "Originator"), Conseco
Finance Securitizations Corp., as Seller (the
A-1-1
"Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Backup Servicer
(the "Backup Servicer") 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 July 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. ▇▇▇▇, 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-1-2
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 Backup Servicer, the Trustee,
the Paying Agent and the Certificate Registrar and any agent of the Originator,
the Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
A-1-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2002-2 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 2002-2
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
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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: The lesser of (i) 8.500%
Cut-off Date: as defined in the and (ii) the Net WAC Cap Rate
Pooling and Servicing Agreement
dated as of June 1, 2002 Denomination: $_____________
First Remittance Date: Aggregate Original Notional Principal
July 1, 2002 Amount of all Class A-IO Certificates:
$117,700,000
Servicer: Maturity Date: ________________
Conseco Finance Corp. (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 2002-2, 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 2002-2 (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 June 1, 2002, among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Backup Servicer (the "Backup
A-2-1
Servicer"), 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 July 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 ______________________ or the next
succeeding Business Day if such _____________________ 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. ▇▇▇▇, 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.
A-2-2
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 Backup Servicer, the Trustee,
the Paying Agent and the Certificate Registrar and any agent of the Originator,
the Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
A-2-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2002-2 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 2002-2
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
Cut-off Date: as defined in the of (i) [7.424] [9.163]% and (ii) the
Pooling and Servicing Agreement Adjusted Net WAC Cap Rate
dated as of June 1, 2002
First Remittance Date: Denomination: $1,000
July 1, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ of
Servicer: All Class M-[1][2]
Conseco Finance Corp. 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 2002-2, 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 2002-2 (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
B-1
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 June 1, 2002 among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota,
National Association , as Backup Servicer (the "Backup Servicer"), 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 July 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. ▇▇▇▇, 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 Backup Servicer, the Trustee,
the Paying Agent and the Certificate Registrar and any agent of the Originator,
the Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
B-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2002-2 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 2002-2
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: The lesser of (i) 9.250%
Cut-off Date: as defined in the and (ii) the Adjusted Net WAC Cap Rate
Pooling and Servicing Agreement
dated as of June 1, 2002
Denomination: $1,000
First Remittance Date:
July 1, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ of All Class
B-[1][2] Certificates: $___________
Servicer:
Conseco Finance Corp. Maturity Date: ____________________
(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 2002-2, CLASS B-[1][2] (SUBORDINATE)
----------------------------------------------------------------------
[BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT THE CERTIFICATEHOLDER EITHER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR ACTING ON BEHALF
OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR (II) THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE 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 2002-2 (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 June 1, 2002, among Conseco
Finance Corp., as Originator and as the initial Servicer (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller"), ▇▇▇▇▇ Fargo
Bank Minnesota, National Assolciation, as backup Servicer (the "Backup
Servicer"), 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.
C-1-2
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 July 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.
[No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.]
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon
C-1-3
surrender of this Certificate for registration of transfer at the office or
agency maintained by the Trustee in St. ▇▇▇▇, 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 Backup Servicer, the Trustee,
the Paying Agent and the Certificate Registrar and any agent of the Originator,
the Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
C-1-4
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2002-2 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 2002-2
By U.S. BANK NATIONAL ASSOCIATION
By
--------------------------------------
Authorized Signatory
C-1-5
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-1-6
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 Maturity Date: ___________________
dated as of June 1, 2002 or if such day is not a Business Day,
then the next succeeding Business Day)
First Remittance Date:
July 1, 2002
Servicer:
Conseco Finance Corp.
C-2-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
------------------------------------------------
PASS-THROUGH CERTIFICATES, SERIES 2002-2, CLASS B-3I (SUBORDINATE)
------------------------------------------------------------------
BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT THE CERTIFICATEHOLDER EITHER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR ACTING ON BEHALF
OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR (II) THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE 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 2002-2 (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 June 1, 2002, among Conseco Finance Corp., as Originator and as the
initial Servicer (the "Originator"), Conseco Finance Securitizations Corp., as
Seller (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Backup Servicer (the "Backup Servicer"), 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.
C-2-2
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 July 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.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the
C-2-3
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. ▇▇▇▇, 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 Backup Servicer, the Trustee,
the Paying Agent and the Certificate Registrar and any agent of the Originator,
the Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Seller, the Servicer, the Backup Servicer, the Trustee, the Paying Agent, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
C-2-4
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2002-2 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 2002-2
By U.S. BANK NATIONAL ASSOCIATION
By
--------------------------------------
Authorized Signatory
C-2-5
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-2-6
EXHIBIT D
FORM OF ASSIGNMENT
------------------
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of June 1, 2002 among Conseco Finance Corp., as Originator and as the
initial Servicer (the "Originator"), Conseco Finance Securitizations Corp., as
Seller (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Backup Servicer (the "Backup Servicer"), 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 and the
Staged-Funding Contract Reserve Account, and (viii) 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 June, 2002.
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 June 1, 2002 (the "Pooling and Servicing Agreement") among Conseco Finance
Corp., Conseco Finance Securitizations Corp., ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Backup Servicer (the "Backup Servicer") 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 June 4, 2002
(the "Underwriting Agreement"), among Conseco Finance Corp., Conseco Finance
Securitizations Corp., Credit Suisse First Boston Corporation, ▇▇▇▇▇▇ Brothers
Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ 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
E-1
the time of such signing and is as of the date hereof duly elected or
appointed, 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
E-2
satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of [Conseco Finance]
[Conseco Securitizations] which 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
June, 2002.
[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 ▇▇▇▇▇▇ & Whitney 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").
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 us to which
the Originator is a party or by which it is bound, or result in a
F-1
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. ss. 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 Contracts as collateral
and naming the Originator as debtor and the Seller as
F-2
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.
ss.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. ss.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 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. ▇▇.▇▇. 513.41 through 513.51), nor,
should the Originator become a debtor under the United States
Bankruptcy Code, as a fraudulent transfer under Section 548 of the
United States Bankruptcy Code (11 U.S.C. ss. 548) as in effect on the
date hereof.
(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. ▇▇.▇▇. 513.41
through 513.51), nor, should the Seller become a debtor under the
▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code, as a fraudulent transfer under Section
548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.
F-5
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 June 1, 2002, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the "Seller"), ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as Backup Servicer (the "Backup Servicer")
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 and (viii) 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 June, 2002.
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
___________________________________, ___________________(the "Custodian")
acting as Custodian under a Custodial Agreement (the "Custodial Agreement")
dated as of __________________, between the Custodian and U.S. Bank National
Association, as Trustee (the "Trustee") under the Pooling and Servicing
Agreement dated as of June 1, 2002 among Conseco Finance Corp., as Originator
and Servicer (the "Originator"), Conseco Finance Securitizations Corp., as
Seller (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Backup Servicer (the "Backup Servicer") 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, ______________________________ has caused this
acknowledgment to be executed by its duly authorized officer as of the ___ day
of _______________.
-------------------------------------,
as Custodian
By:
-------------------------------------
[Name]
[Title]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
CONTRACT FILES
___________________________________, ___________________(the "Custodian")
acting as Custodian under a Custodial Agreement (the "Custodial Agreement")
dated as of __________________, between the Custodian and U.S. Bank National
Association, as Trustee (the "Trustee") under the Pooling and Servicing
Agreement dated as of June 1, 2002 among Conseco Finance Corp., as Originator
and Servicer (the "Originator"), Conseco Finance Securitizations Corp., as
Seller (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Backup Servicer (the "Backup Servicer") 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, _______________________________________ has caused this
acknowledgment to be executed by its duly authorized officer as of the ___ day
of _______________.
--------------------------------------,
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 June 1, 2002 among the Company, Conseco Finance Securitizations Corp., ▇▇▇▇▇
Fargo Bank Minnesota, National Association 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
June, 2002.
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 and Servicing Agreement Percentage Interest: 100%
dated as of June 1, 2002
First Remittance Date:
July 1, 2002
J-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
------------------------------------------------
PASS-THROUGH CERTIFICATES, SERIES 2002-2 CLASS C [SUBSIDIARY]
-------------------------------------------------------------
[INTERMEDIATE] [MASTER] (RESIDUAL INTEREST)
-------------------------------------------
Cut-off Date Pool Principal Balance: $500,000,000.00 (Approximate)
BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT THE CERTIFICATEHOLDER EITHER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT SUCH PERSON IS NEITHER A PLAN, NOR ACTING ON BEHALF
OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR (II) THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
This 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 2002-2 (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
June 1, 2002, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Backup Servicer (the
"Backup Servicer") 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.
J-2
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 July 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.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.
This Class 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, 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
J-3
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. ▇▇▇▇, 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 Backup Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Originator, the
Servicer, the Backup 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 Backup Servicer, the
Trustee, the Paying Agent, the Certificate Registrar nor any such agent shall be
affected by any notice to the contrary.
The holder of this Class 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-4
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2002-2 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 2002-2
By U.S. BANK NATIONAL ASSOCIATION
By
--------------------------------------
Authorized Signatory
J-5
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-6
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 June 1, 2002 among the Company, Conseco Finance Securitizations Corp., ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as Backup Servicer 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
June, 2002.
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 June 1, 2002 among the
Company, Conseco Finance Securitizations Corp., ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Backup Servicer 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 ▇▇▇▇▇ Fargo Bank Minnesota,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ National Association
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Conseco Finance Securitizations Corp.
300 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2002-2, 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 April 5, 2002 and
related Prospectus Supplement dated June ___, 2002, 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.
ss.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 2002-2
M-1
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
MANUFACTURED HOUSING CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-1
TRUST ACCOUNT: ▇▇▇▇▇▇▇-0
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Available Funds Principal Interest Total
--------------- --------- -------- -----
Scheduled Monthly Payments Collected 0.00 0.00 0.00
Principal Prepayments 0.00 0.00 0.00
Proceeds on Liquidated Loans 0.00 0.00 0.00
Servicer Reimbursement of Pre-Liquidation Expenses 0.00 0.00 0.00
Servicer Reimbursement of Post-Liquidation Expenses 0.00 0.00 0.00
Servicer Advance for Delinquent Payments 0.00 0.00 0.00
Recovery of Prior Month's Servicer Advance 0.00 0.00 0.00
10-Day Roll Forward of Principal Collections 0.00 0.00 0.00
Recovery of Prior Month's 10-Day Roll Forward 0.00 0.00 0.00
Collection Account Earnings 0.00 0.00 0.00
Class M & B-1 Interest Deficiencies for current Remittance 0.00 0.00 0.00
Class M & B-1 Interest Deficiencies from prior Remittance 0.00 0.00 0.00
Amount Withdrawn from Reserve Funds 0.00 0.00 0.00
Other Adjustments to Available Funds 0.00 0.00 0.00
------------------------------------------------------
Total Available Funds 0.00 0.00 0.00
======================================================
Fees Payable
------------
Monthly Servicing Fee (0.5% of Pool Scheduled Principal Balance) 0.00
Back-up Servicing Fee (.02% of Pool Scheduled Principal Balance) 0.00
Trustee Fee 0.00
Insurance Premium 0.00
Total Fees 0.00
Amount Available for Principal and Interest Distribution (see page 2) 0.00
==================
Formula Principal Distribution
------------------------------
Scheduled Principal Payments 0.00
Principal Prepayments (Payoffs and Curtailments) 0.00
Liquidated Loans 0.00
Repurchased / Substituted Contracts 0.00
10-Day Principal Roll Forward 0.00
Prior Month's 10-Day Roll Forward 0.00
-------------------
Total Formula Principal Distribution 0.00
===================
Unpaid Class A Principal Shortfall as of Prior Month 0.00
Class M and B Liquidation Loss Principal Distribution 0.00
Overcollateralization Principal Distribution (begins 05/01/2002) 0.00
-------------------
Total Additional Principal Distribution and Other Principal Distribution 0.00
===================
Pool Scheduled Principal Balance 0.00
10-Day Adjusted Pool Principal Balance 0.00
Certificate Principal Balance (excluding IO Notional Principal Amount) 0.00
Overcollateralization Amount (Target:) 21,000,000.00 0.00
Total Outstanding Loan Count 0
Reserve Funds / Cash Deposits Previous Balance Deposits Withdrawals Ending Balance
----------------------------- ---------------- -------- ----------- --------------
Prefunded Account 0.00 0.00 0.00 0.00
Undelivered Account 0.00 0.00 0.00 0.00
Stage-Funded Reserve Fund 0.00 0.00 0.00 0.00
Non-Recoverable Pre-Liquidation Expenses Incurred: 0.00 Outstanding: 0.00
Non-Recoverable Post-Liquidation Expenses Incurred: 0.00 Outstanding: 0.00
M-1
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
MANUFACTURED HOUSING CONTRACT PASS-THROUGH
CERTIFICATES SERIES 2002-2
TRUST ACCOUNT: ____________ Principal Allocation Percentage
MONTHLY REMITTANCE REPORT: -------------------------------
REMITTANCE DATE: Current Date Following Date
--------------------------------------
Class A-1 0.00000000 0.00000000
Class A-2 0.00000000 0.00000000
Class A-IO 0.00000000 0.00000000
Class M-1A 0.00000000 0.00000000
Class M-1F 0.00000000 0.00000000
Class M-2 0.00000000 0.00000000
Class B 0.00000000 0.00000000
--------------------------------------
Total 0.00000000 0.00000000
--------------------------------------
Distributions Current Interest
------------- ------- --------
Coupon Interest Shortfall Interest Principal Principal Ending
------ -------- --------- -------- --------- --------- -------
Class CUSIP Rate Payment Payment Per $1000 Payment Per $1000 Balance
----- ----- ---- ------- ------- --------- ------- --------- -------
--------------- ------------ ------------- ----------- ------------ ------------- ------------- ------------ -------------
A1 0.00 0.00 0.00000000 0.00 0.00000000 0.00
--------------- ------------ ------------- ----------- ------------ ------------- ------------- ------------ -------------
A2 0.00 0.00 0.00000000 0.00 0.00000000 0.00
--------------- ------------ ------------- ----------- ------------ ------------- ------------- ------------ -------------
0.00 0.00 0.00000000 0.00 0.00000000 0.00
M1 0.00 0.00 0.00000000 0.00 0.00000000 0.00
M2 0.00 0.00 0.00000000 0.00 0.00000000 0.00
B1 0.00 0.00 0.00000000 0.00 0.00000000 0.00
B2 0.00 0.00 0.00000000 0.00 0.00000000 0.00
B3I xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
C xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
O/C xxxxxxxxx N/A 0.00 0.00 N/A 0.00 N/A N/A
--------------- ------------ ------------- ----------- ------------ ------------- ------------- ------------ -------------
Totals 0.00 0.00 0.00 0.00
=============== ============ ============= =========== ============ ============= ============= ============ =============
[Table continues]
Distributions Unpaid Unpaid
------------- ------ ------
Pool Original Interest Principal
---- --------- -------- ---------
Class CUSIP Factor Balance Shortfall Shortfall
----- ----- ------ ------- --------- ---------
--------------- ------------ ------------ ----------------- ------------ -------------
A1 0.00000000 46,250,000.00 0.00 0.00
--------------- ------------ ------------ ----------------- ------------ -------------
A2 0.00000000 300,000,000.00 0.00 0.00
--------------- ------------ ------------ ----------------- ------------ -------------
0.00000000 117,700,000.00 0.00 0.00
M1 0.00000000 38,750,000.00 0.00 0.00
M2 0.00000000 28,750,000.00 0.00 0.00
B1 0.00000000 28,750,000.00 0.00 0.00
B2 0.00000000 18,750,000.00 0.00 0.00
B3I xxxxxxxxx N/A N/A 0.00 0.00
C xxxxxxxxx N/A N/A 0.00 0.00
O/C xxxxxxxxx N/A 6,000,000.00
--------------- ------------ ------------ ----------------- ------------ -------------
Totals 0.00000000 500,000,000.00 0.00 0.00
=============== ============ ============= ================= ============ =============
Delinquency/Default Summary
---------------------------
Delinquencies 31-60 Days 61-90 Days Over 90Days Total Extensions
------------- ---------- ---------- ----------- ----- ----------
----------------------- -------------- ------------- --------------- ------------ -------------
Number of Loans 0 0 0 0 0
Principal Balance 0.00 0.00 0.00 0.00 0.00
Percent of Total (#) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Percent of Total ($) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
----------------------- -------------- ------------- --------------- ------------ -------------
[Table continues]
Repossessions Repossession Repossessions Liquidations/ Liquidation
------------- ------------ ------------- ------------- -----------
Delinquencies Incurred Inventory Repurchased Charge-Offs Losses
------------- -------- --------- ----------- ----------- ------
----------------------- -------------- ---------------- ---------------- --------------- ------------
Number of Loans 0 0 0 0 0
Principal Balance 0.00 0.00 0.00 0.00 0.00
Percent of Total (#) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Percent of Total ($) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
----------------------- -------------- ---------------- ---------------- --------------- ------------
---------------- --------------- ------------
Cumulative (#): 0 0 0
Cumulative ($): 0.00 0.00 0.00
---------------- --------------- ------------
Distribution Tests Test Date: 5/1/06
Target Actual
------ ------
--------------------------------------------------------------------------------------------
3 Month Average 60 Day Delinquency Ratio Less than 7.00% 0.00%
Current Realized Loss Ratio Less than 3.50% 0.00%
Cumulative Realized Loss Ratio until 6/30/2007 Less than 7.00% 0.00%
(target not to exceed 8.75% from 7/1/2007 to 6/30/2008,
11.75% from 7/1/2008 to 6/30/2009, 13.25% thereafter)
--------------------------------------------------------------------------------------------
[Table continues]
Target Actual
------ ------
-----------------------------------------------------------------
Class M-1 Principal Balance Greater than 49.875% 0%
--------------- ---------
Class M-2 Principal Balance Greater than 38.25% 0% WAC 0%
Class B Principal Balance Greater than 29.625% 0% Net WAC Cap 0%
Class B Principal Balance Greater than 10,000,000.00 0.0 WAM 0.00
-------------------------
-----------------------------------------------------------------
Page2
CONSECO FINANCE CORPORATION (SELLER & SERVICER)
U.S. BANK NATIONAL ASSOCIATION (TRUSTEE)
MANUFACTURED HOUSING CONTRACT PASS-THROUGH CERTIFICATES
SERIES 2002-2
TRUST ACCOUNT: _______________
MONTHLY REMITTANCE REPORT:
REMITTANCE DATE:
Additional Interest Distributions
---------------------------------
Liquidation Loss Interest Distributions
---------------------------------------
Adjusted Liquidation
-------- -----------
Coupon Principal Liquidation Principal Loss Interest
------ --------- ----------- --------- -------------
Class CUSIP Rate Balance Loss Amount Balance Amount
----- ----- ---- ------- ----------- ------- ------
------------------ --------------- --------------- --------------- --------------- ---------------- ----------------
M1 0.00 0.00 0.00 0.00
M2 0.00 0.00 0.00 0.00
B1 0.00 0.00 0.00 0.00
B2 0.00 0.00 0.00 0.00
------------------ --------------- --------------- --------------- --------------- ---------------- ----------------
Totals: 0.00 0.00
================== =============== =============== =============== =============== ================ ================
[Table continues]
Liquidation Interest Unpaid Interest
----------- -------- ------ --------
Loss Interest Payment Liquidation Deficiency
------------- ------- ----------- ----------
Class CUSIP Payment Per $1000 Loss Interest Amount
----- ----- ------- --------- ------------- ------
------------------ --------------- --------------- --------------- ---------------- ---------------
M1 0.00 0.00000000 0.00 0.00
M2 0.00 0.00000000 0.00 0.00
B1 0.00 0.00000000 0.00 0.00
B2 0.00 0.00000000 0.00 0.00
------------------ --------------- --------------- --------------- ---------------- ---------------
Totals: 0.00 0.00 0.00
================== =============== =============== =============== ================ ===============
Page3
EXHIBIT N
FORM OF ADDITION NOTICE
-----------------------
June ____, 2001
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of June 1,
2002, among Conseco Finance Corp. (the "Company"), Conseco Finance
Securitizations Corp. (the "Seller"), ▇▇▇▇▇ Fargo Bank Minnesota,
National Association (the "Backup Servicer") and U.S. Bank National
Association as Trustee (the "Trustee") relating to Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates, Series
2002-2
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 June 1, 2002, among Conseco Finance Corp. (the "Originator"),
Conseco Finance Securitizations Corp. (the "Seller"), ▇▇▇▇▇ Fargo Bank
Minnesota, National Association (the "Backup Servicer") 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 2002-2, 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 June, 2002.
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
June 1, 2002 (the "Agreement") among the Company, Conseco Finance Corp., ▇▇▇▇▇
Fargo Bank Minnesota, National Association, as Backup Servicer and U.S. Bank
National Association as Trustee. All capitalized terms used herein without
definition have the respective meanings specified in the Agreement. The
undersigned further certifies that:
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 June, 2002.
By
--------------------------------------
Name:
Title
P-1