Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-2
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
CONSECO FINANCE CORP.
as Originator and Initial Servicer
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
Dated as of June 1, 2001
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................................................... 1
SECTION 1.01 General...................................................................................... 1
SECTION 1.02 Specific Terms............................................................................... 1
SECTION 1.03 Calculations................................................................................. 44
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS....................................................... 44
SECTION 2.01 Closing...................................................................................... 44
SECTION 2.02 Conditions to the Closing.................................................................... 46
SECTION 2.03 Conveyance of the Subsequent Contracts....................................................... 48
SECTION 2.04 Acceptance by Trustee........................................................................ 50
SECTION 2.05 REMIC Provisions............................................................................. 50
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................................................... 56
SECTION 3.01 Representations and Warranties Regarding the Seller.......................................... 57
SECTION 3.02 Representations and Warranties Regarding Each Contract....................................... 57
SECTION 3.03 Additional Representations and Warranties.................................................... 62
SECTION 3.04 Representations and Warranties Regarding the Contracts
in the Aggregate............................................................................. 62
SECTION 3.05 Representations and Warranties Regarding the Contract Files
and Land-and-Home Contract Files............................................................. 65
SECTION 3.06 Repurchase of Contracts or Substitution of Contracts for
Breach of Representations and Warranties..................................................... 65
SECTION 3.07 Repurchase or Substitution Under Certain Circumstances....................................... 69
SECTION 3.08 Staged-Funding Contract Reserve Account...................................................... 70
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS......................................... 71
SECTION 4.01 Custody of Contract Files and Land-and-Home Contract Files................................... 71
SECTION 4.02 Filings...................................................................................... 72
SECTION 4.03 Name Change or Relocation.................................................................... 72
SECTION 4.04 Chief Executive Office....................................................................... 72
SECTION 4.05 Costs and Expenses........................................................................... 73
ARTICLE V SERVICING OF CONTRACTS............................................................................... 73
SECTION 5.01 Responsibility for Contract Administration................................................... 73
SECTION 5.02 Standard of Care............................................................................. 73
SECTION 5.03 Records...................................................................................... 73
SECTION 5.04 Inspection; Computer Tape.................................................................... 73
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SECTION 5.05 Certificate Account........................................................................74
SECTION 5.06 Enforcement................................................................................75
SECTION 5.07 Trustee to Cooperate.......................................................................77
SECTION 5.08 Costs and Expenses.........................................................................77
SECTION 5.09 Maintenance of Insurance...................................................................77
SECTION 5.10 Repossession...............................................................................79
SECTION 5.11 Commingling of Funds.......................................................................79
SECTION 5.12 Retitling; Security Interests..............................................................79
SECTION 5.13 Covenants, Representations and Warranties of Servicer......................................80
ARTICLE VI REPORTS AND TAX MATTERS...............................................................................81
SECTION 6.01 Monthly Reports............................................................................81
SECTION 6.02 Certificate of Servicing Officer...........................................................82
SECTION 6.03 Other Data.................................................................................82
SECTION 6.04 Annual Report of Accountants...............................................................82
SECTION 6.05 Statements to Certificateholders...........................................................82
SECTION 6.06 Payment of Taxes...........................................................................88
ARTICLE VII SERVICE TRANSFER.....................................................................................89
SECTION 7.01 Event of Termination.......................................................................89
SECTION 7.02 Transfer...................................................................................91
SECTION 7.03 Trustee to Act; Appointment of Successor...................................................92
SECTION 7.04 Notification to Certificateholders.........................................................93
SECTION 7.05 Effect of Transfer.........................................................................93
SECTION 7.06 Transfer of Certificate Account............................................................93
ARTICLE VIII PAYMENTS............................................................................................94
SECTION 8.01 Monthly Payments...........................................................................94
SECTION 8.02 Permitted Withdrawals from the Certificate Account.........................................94
SECTION 8.03 Payments...................................................................................95
SECTION 8.04 Reserve Fund..............................................................................102
SECTION 8.05 Class C Subsidiary Certificateholder's Purchase Option;
Additional Principal Distribution Amount.................................................103
SECTION 8.06 Capitalized Interest Account..............................................................104
SECTION 8.07 Pre-Funding Account.......................................................................105
SECTION 8.08 Claims Upon Policy........................................................................106
SECTION 8.09 Effect of Payments by the Certificate Insurer; Subrogation................................108
SECTION 8.10 Notices to the Certificate Insurer........................................................108
ARTICLE IX THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS.............................................108
SECTION 9.01 The Certificates..........................................................................108
SECTION 9.02 Registration of Transfer and Exchange of Certificates.....................................110
SECTION 9.03 No Charge; Disposition of Void Certificates...............................................114
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SECTION 9.04 ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Certificates.........................................115
SECTION 9.05 Persons Deemed Owners.....................................................................115
SECTION 9.06 Access to List of Certificateholders' Names and Addresses.................................115
SECTION 9.07 Authenticating Agents.....................................................................115
ARTICLE X INDEMNITIES...........................................................................................116
SECTION 10.01 Seller's and Originator's Indemnities....................................................116
SECTION 10.02 Liabilities to Obligors..................................................................116
SECTION 10.03 Tax Indemnification......................................................................116
SECTION 10.04 Servicer's Indemnities...................................................................117
SECTION 10.05 Operation of Indemnities.................................................................117
SECTION 10.06 REMIC Tax Matters........................................................................117
ARTICLE XI THE TRUSTEE..........................................................................................117
SECTION 11.01 Duties of Trustee........................................................................117
SECTION 11.02 Certain Matters Affecting the Trustee....................................................118
SECTION 11.03 Trustee Not Liable for Certificates or Contracts.........................................119
SECTION 11.04 Rights of Certificateholders to Direct Trustee and to Waiver Event of Termination........119
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses..........................................120
SECTION 11.06 Eligibility Requirements for Trustee.....................................................121
SECTION 11.07 Resignation or Removal of Trustee........................................................121
SECTION 11.08 Successor Trustee........................................................................122
SECTION 11.09 Merger or Consolidation of Trustee.......................................................122
SECTION 11.10 Tax Returns..............................................................................122
SECTION 11.11 Obligor Claims...........................................................................123
SECTION 11.12 Appointment of Co-Trustee or Separate Trustee............................................123
SECTION 11.13 Agents of Trustee........................................................................124
ARTICLE XII MISCELLANEOUS.......................................................................................124
SECTION 12.01 Servicer Not to Assign Duties or Resign; Delegation of Servicing Functions...............124
SECTION 12.02 Maintenance of Office or Agency..........................................................125
SECTION 12.03 Termination..............................................................................125
SECTION 12.04 Acts of Certificateholders...............................................................128
SECTION 12.05 Calculations.............................................................................128
SECTION 12.06 Assignment or Delegation by Originator...................................................128
SECTION 12.07 Amendment................................................................................129
SECTION 12.08 Notices..................................................................................131
SECTION 12.09 Merger and Integration...................................................................132
SECTION 12.10 Headings.................................................................................132
Section 12.11 Governing Law............................................................................132
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EXHIBIT A-1 --Form of Class A Certificate............................................................A-1-1
EXHIBIT A-2 --Form of Class A-IO Certificate.........................................................A-2-1
EXHIBIT B --Form of Class M-[1][2] Certificate.......................................................B-1
EXHIBIT C-1 --Form of Class B-[1][2] Certificate.....................................................C-1-1
EXHIBIT C-2 --Form of Class B-3I Certificate.........................................................C-2-1
EXHIBIT D --Form of Assignment.......................................................................D-1
EXHIBIT E --Form of Certificate of Officer...........................................................E-1
EXHIBIT F --Form of Opinion of Counsel...............................................................F-1
EXHIBIT G --Form of Trustee's Acknowledgement........................................................G-1
EXHIBIT H-1 --Form of Custodian's Acknowledgement (Land-and-Home
Contract Files)......................................................H-1-1
EXHIBIT H-2 --Form of Custodian's Acknowledgement (Contract Files)...................................H-2-1
EXHIBIT I --Form of Certificate of Servicing Officer.................................................I-1
EXHIBIT J --Form of Class C [Subsidiary] [Intermediate] [Master] Certificate.........................J-1
EXHIBIT K-1 --Form of Certificate Regarding Repurchased Contracts....................................K-1-1
EXHIBIT K-2 --Form of Certificate Regarding Substituted Contracts....................................K-2-1
EXHIBIT L --Form of Representation Letter............................................................L-1
EXHIBIT M --Form of Monthly Report...................................................................M-1
EXHIBIT N --Form of Addition Notice..................................................................N-1
EXHIBIT O --Form of Subsequent Transfer Instrument...................................................O-1
EXHIBIT P --Form of Officer's Certificate (Subsequent Transfer)......................................P-1
EXHIBIT Q --List of Reserve Fund Contracts...........................................................Q-1
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AGREEMENT, dated as of June 1, 2001, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware, as
originator (directly or through a wholly owned subsidiary) of the manufactured
housing installment sales contracts and installment loan agreements described
herein (the "Originator"), and as the initial servicer (the "Servicer") and U.S.
Bank National Association, a national banking association, not in its individual
capacity but solely as Trustee (the "Trustee").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
originates, purchases and services manufactured housing installment sales
contracts and installment loan agreements, which contracts provide for
installment payments by or on behalf of the owner of the manufactured home and
grant security interests in the related manufactured home (or, in certain cases,
mortgages or deeds of trust on the real estate to which such manufactured home
is deemed permanently affixed);
WHEREAS, the Seller, the Originator, the Servicer, and the Trustee wish
to set forth the terms and conditions pursuant to which the "Trust," as
hereinafter defined, will acquire the "Contracts," as hereinafter defined, and
the Servicer will manage and service the Contracts;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as provided herein:
ARTICLE I
DEFINITIONS
SECTION 1.01 General. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article include the plural as well as the singular, the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision, and Section references refer to Sections of the Agreement.
SECTION 1.02 Specific Terms.
"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 October 2001, the Amount Available
remaining after payment of the amounts described in clauses (i) through (xiii)
of Section 8.03(a), subject to the limitations and conditions specified in
Section 8.03(a)(xiv).
"Additional Principal Payment Date" has the meaning assigned in Section
8.05(d).
"Adjusted Amount Available" means, as to any Remittance Date, the
Amount Available (as determined on the immediately preceding Determination
Date), plus (i) on the Post-Funding Remittance Date any Pre-Funded Amount, (ii)
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), (iii) on the Remittance Dates in August 2001 and September
2001 any amount withdrawn from the Capitalized Interest Account and deposited in
the Certificate Account, and (iv) any amount withdrawn from the Reserve Fund and
deposited in the Certificate Account.
"Adjusted Weighted Average Contract Rate" means, for any Remittance
Date, a fraction expressed as a percentage, (a) the numerator of which is the
sum of (i) the Weighted Average Contract Rate multiplied by the Subsidiary
Interest Adjusted Principal Balance of the Class S-1 Interest and (ii) the
Weighted Average Contract Rate less (A) 2.50% (two hundred fifty basis points),
multiplied by the sum of the Subsidiary Interest Adjusted Principal Balance of
the (1) Class S-2(1) Interest through and including the October 2001 Remittance
Date, (2) Class S-2(2) Interest through and including the January 2002
Remittance Date, (3) Class S-2(3)
Interest through and including the April 2002 Remittance Date, (4) Class S-2(4)
Interest through and including the July 2002 Remittance Date, (5) Class S-2(5)
Interest through and including the October 2002 Remittance Date, (6) Class S-
2(6) Interest through and including the January 2003 Remittance Date, (7) Class
S-2(7) Interest through and including the April 2003 Remittance Date, (8) Class
S-2(8) Interest through and including the July 2003 Remittance Date, (9) Class
S-2(9) Interest through and including the October 2003 Remittance Date, (10)
Class S-2(10) Interest through and including the January 2004 Remittance Date,
Class S-2(11) Interest through and including the April 2004 Remittance Date,
(12) Class S-2(12) Interest through and including the July 2004 Remittance Date,
(13) Class S-2(13) Interest through and including the October 2004 Remittance
Date, (14) Class S-2(14) Interest through and including the January 2005
Remittance Date, (15) Class S-2(15) Interest through and including the April
2005 Remittance Date, (16) Class S-2(16) Interest through and including the July
2005 Remittance Date, (17) Class S-2(17) Interest through and including the
October 2005 Remittance Date, (18) Class S-2(18) Interest through and including
the January 2006 Remittance Date, (19) Class S-2(19) Interest through and
including the April 2006 Remittance Date, (20) Class S-2(20) Interest through
and including the July 2006 Remittance Date, (21) Class S-2(21) Interest through
and including the October 2006 Remittance Date, (22) Class S-2(22) Interest
through and including the January 2007 Remittance Date and (23) Class S-2(23)
Interest through and including the April 2007 Remittance Date, and (B) 0% after
the April 2007 Remittance Date, minus (iii) the Premium and, if Conseco Finance
is no longer the Servicer, minus the Monthly Servicing Fee and (b) the
denominator of which is the sum of the Subsidiary Interest Adjusted Principal
Balance of the Class S-1 and Class S-2 Interests.
"Advance Payment" means any payment by an Obligor in advance of the
related Due Period in which it would be due under such Contract and which
payment is not a Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Agreement" means this Pooling and Servicing Agreement, as the same may
be amended or supplemented from time to time.
"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
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(C) all collections in respect of principal on the
Contracts received after the last day of the related
Due Period up to and including the third Business Day
prior to such Remittance Date (but in no event later
than the 25th day of the month prior to such
Remittance Date), minus
(ii) the sum as of the close of business on the Business Day
preceding such Remittance Date of
(A) the Amount Held for Future Distribution,
(B) amounts permitted to be withdrawn by the Trustee from
the Certificate Account pursuant to clauses (ii)-(v),
inclusive, of Section 8.02, and
(C) with respect to all Remittance Dates other than the
Remittance Date in August 2001, 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.
"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).
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"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.
"Capitalized Interest Account" means the account established and
maintained pursuant to Section 8.06.
"Certificates" means the Class A, Class A-IO, Class M, Class B, Class
B-3I, and Class C Certificates, collectively.
"Certificate Account" means the account established and maintained
pursuant to Section 5.05.
"Certificate Insurer" means Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance company, or any successor thereto, as issuer
of the Policy.
"Certificate Insurer Default" means the occurrence and continuance of
any of the following:
(i) the Certificate Insurer fails to make a payment required under
the Policy in accordance with its terms; or
(ii) the Certificate Insurer shall have (a) filed a petition or
commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York
State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization, (b) made a general assignment
for the benefit of its creditors or (c) had an order for
relief entered against it under the United States Bankruptcy
Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization that is final
and nonappealable.
"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
4
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 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 Cross-Over Date" means the Remittance Date on which the Class
A Principal Balance (after giving effect to the distributions of principal on
the Class A Certificates on such Remittance Date) is reduced to zero.
"Class A Distribution Amount" means, as to any Remittance Date, the
lesser of:
(i) the Adjusted Amount Available for such Remittance Date (less
any amounts paid to the Servicer or the Certificate Insurer
pursuant to Section 8.03(a)(i)), and
(ii) the Class A Formula Distribution Amount for such Remittance
Date;
provided that after the Class A Cross-Over Date the Class A Distribution Amount
shall be zero.
"Class A Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of:
(i) one month's interest (or, as to the first Remittance Date,
interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified
in Section 1.03), at the Class A Remittance Rate on the Class
A Principal Balance, 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)(xiv);
provided, however, that the aggregate of all amounts distributed for all
Remittance Dates pursuant to clauses (iii), (iv) and (v) shall not exceed the
sum of the Original Class A Principal Balance.
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"Class A Interest Distribution Amount" means, as of any Remittance
Date, the sum of the amount specified in clauses (i) and (ii) 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), plus the
amount, if paid, paid pursuant to claim on the Policy, is less than the Class A
Interest Distribution Amount.
"Class A Percentage" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the Class A Principal
Balance and the denominator of which is the sum of:
(i) the Class A Principal Balance,
(ii) if the Class M-1 Distribution Test is satisfied, the Class M-1
Principal Balance (minus the Unpaid Class M-1 Principal
Shortfall, if any), otherwise zero,
(iii) if the Class M-2 Distribution Test is satisfied, the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal
Shortfall, if any), otherwise zero, and
(iv) if the Class B Distribution Test is satisfied, the sum
of the Class B Principal Balance (minus the Unpaid Class B-1
Principal Shortfall, if any, and the Unpaid Class B-2
Principal Shortfall, if any) and the Overcollateralization
Amount, otherwise zero.
"Class A Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class A Certificates less all amounts
previously distributed to holders of Class A certificates on account of
principal.
"Class A Principal Deficiency Amount" means, as to any Remittance Date,
the amount, if any, by which the Pool Scheduled Principal Balance plus any
Pre-Funded Amount is less than the Class A Principal Balance.
"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)(viii)(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 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than:
(i) for each Remittance Date prior to and including the first
Remittance Date on which the Pool Scheduled Principal Balance
is equal to or less than 10% of the Cut-off Date Pool
Principal Balance, 6.60% per annum, and
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(ii) for each Remittance Date after the first Remittance Date on
which the Pool Scheduled Principal Balance is equal to or less
than 10% of the Cut-off Date Pool Principal Balance, 7.10% per
annum.
"Class A-IO Certificate" means any one of the Class A-IO Certificate
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-IO Formula Distribution Amount" means, as to any Remittance
Date, the sum of:
(i) one month's interest (or, as to the first Remittance Date,
interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified
in Section 1.03), at the Class A-IO Remittance Rate on the
Class A-IO Notional Principal Amount, for such Remittance
Date, and
(ii) the aggregate Unpaid Class A-IO Interest Shortfall, if any.
"Class A-IO Interest Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class A-IO
Certificates on such Remittance Date pursuant to Section 8.03(a)(ii) is less
than the Class A-IO Formula Distribution Amount.
"Class A-IO Notional Principal Amount" means, for any Remittance Date,
an amount equal to (i) through and including the Remittance Date in April 2007,
the lesser of (A) the Notional Principal Amount, and (B) the sum of the Pool
Scheduled Principal Balance and the amount on deposit in the Pre-Funding Account
and (ii) thereafter, zero.
"Class A-IO Remittance Rate" means 2.50% per annum.
"Class B Certificate" means any one of the Class B-1 or Class B-2
Certificates.
"Class B Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that:
(i) such Remittance Date occurs in or after August 2005;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance
Date is less than or equal to 6.25%;
(iii) the Cumulative Realized Losses Test for such Remittance Date
is satisfied;
(iv) the Current Realized Loss Ratio for such Remittance Date is
less than or equal to 3.50%;
(v) the fraction, expressed as a percentage, the numerator of
which is the sum of the Class B Principal Balance and the
Overcollateralization Amount as of such Remittance Date and
the denominator of which is the Pool Scheduled Principal
7
Balance as of the immediately preceding Remittance Date, is
equal to or greater than 15.150%; 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 and the Overcollateralization Amount and the
denominator of which is the sum of:
(A) the Class A Principal Balance,
(B) the Class M-1 Principal Balance (minus the Unpaid
Class M-1 Principal Shortfall, if any),
(C) the Class M-2 Principal Balance (minus the Unpaid
Class M-2 Principal Shortfall, if any),and
(D) the sum of the Class B Principal Balance (minus the
Unpaid Class B-1 Principal Shortfall, if any, and the
Unpaid Class B-2 Principal Shortfall, if any) and the
Overcollateralization Amount.
"Class B Principal Balance" means, as to any Remittance Date, the sum
of the Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B-1 Adjusted Principal Balance" means, as of any Remittance
Date, the Class B-1 Principal Balance as of that Remittance Date minus the Class
B-1 Liquidation Loss Amount (if any) as of the prior Remittance Date.
"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:
8
(i) one month's interest (or as to the first Remittance Date,
interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified
in Section 1.03) at the Class B-1 Remittance Rate on the Class
B-1 Adjusted Principal Balance as of such Remittance Date,
(ii) any Unpaid Class B-1 Interest Shortfall,
(iii) the Class B Percentage of the Formula Principal Distribution
Amount,
(iv) any Unpaid Class B-1 Principal Shortfall,
(v) any Additional Principal Distribution Amount to be distributed
to the Class B-1 Certificates pursuant to Section
8.03(a)(xiv),
(vi) any Class B-1 Liquidation Loss Interest Amount, and
(vii) any Unpaid Class B-1 Liquidation Loss Interest Shortfall;
provided, however, that on the Class M-2 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class M-2 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the second
proviso to such term shall instead be included in clause (iii) or (v) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed pursuant to clauses (iii), (iv) and (v) of this definition shall not
exceed the Original Class B-1 Principal Balance.
"Class B-1 Interest Deficiency Amount" means, as to the Class B-1
Certificates and any Remittance Date, the difference, if any, between:
(i) the sum of the amounts described in clauses (i), (ii), (vi)
and (vii) of the definition of the term "Class B-1 Formula
Distribution Amount," and
(ii) the amount available for distribution to the Class B-1
Certificateholders pursuant to Section 8.03(a)(vi)(A) and (B)
and Section 8.03(a)(xi)(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)(vi)(A) and (B), and
9
(B) any amount distributed to the Holders of the Class
B-1 Certificates pursuant to Section 8.03(d) on such
Remittance Date, and
(ii) the Class B-1 Interest Distribution Amount for such Remittance
Date.
"Class B-1 Liquidation Loss Amount" means, as of any Remittance Date,
the lesser of:
(i) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2
Principal Balance and the Class B-1 Principal Balance for such
Remittance Date exceeds the sum of the Pre-Funded Amount plus
the Pool Scheduled Principal Balance for such Remittance Date
(after giving effect to all distributions of principal on the
Class A, Class M-1, Class M-2 and Class B-1 Certificates on
such Remittance Date), and
(ii) the Class B-1 Principal Balance (after giving effect to all
distributions of principal on the Class B-1 Certificates on
such Remittance Date).
"Class B-1 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class B-1 Remittance Rate on the Class B-1 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class B-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(xi)(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)(xi)(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 floating rate (determined each Due
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 9.44% per annum.
"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.
10
"Class B-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (i) the Remaining Amount Available and (ii) the Class B-2 Formula
Distribution Amount for such Remittance Date.
"Class B-2 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date,
interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified
in Section 1.03) at the Class B-2 Remittance Rate on the Class
B-2 Principal Balance as calculated immediately prior to such
Remittance Date,
(ii) any Unpaid Class B-2 Interest Shortfall,
(iii) the amount set forth in (A) or (B) below, as applicable:
(A) if such Remittance Date is prior to or on the Class
B-1 Cross-Over Date, zero, or
(B) if such Remittance Date is after the Class B-1 Cross-
Over Date, the Class B Percentage of the Formula
Principal Distribution Amount,
(iv) any Unpaid Class B-2 Principal Shortfall, and
(v) any Additional Principal Distribution Amount to be distributed
to the Class B-2 Certificates pursuant to Section
8.03(a)(xiv);
provided, however, that on the Class B-1 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class B-1 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the second
proviso to such term shall instead be included in clause (iii) or (v) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed pursuant to clauses (iii), (iv) and (v) of this definition shall not
exceed the Original Class B-2 Principal Balance.
"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)(xii)(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
11
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)(xii)(D) is less
than the amount described in Section 8.03(a)(xii)(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 floating rate (determined each Due
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 10.15% per annum.
"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 (i) the Class B-3I Formula Distribution Amount for
such Remittance Date less (ii) any amount distributed on that Remittance Date
under Section 8.03(a)(xiv) plus (iii) on the Remittance Date on which the Class
Principal Balance of the Certificates is reduced to zero, the excess of the Pool
Scheduled Principal Balance over the aggregate Class Principal Balance of the
Certificates on such Remittance Date, plus (iv) the amount, if any, by which the
Class B-3I Distribution Amount on the preceding Remittance Date exceeds the
amount actually distributed to the Class B-3I Certificates on that 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 and the Pre-Funded Amount as of the immediately
preceding Remittance Date.
"Class B-3I Remittance Rate" means the excess of (i) the Adjusted
Weighted Average Contract 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.
12
"Class C Certificate" means any one of the Class C Subsidiary
Certificate, Class C Intermediate or Class C Master Certificate.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Intermediate Certificate" means a Class C Intermediate
Certificate executed and delivered by the Trustee substantially in the form of
Exhibit J, and evidencing an interest designated as the "residual interest" in
the Intermediate REMIC for purposes of the REMIC Provisions.
"Class C Intermediate Distribution Amount" means, as to any Remittance
Date, the amount, if any, distributable pursuant to Section 8.03(b)(iii).
"Class C Master Certificate" means a Class C Master Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the Master
REMIC for purposes of the REMIC Provisions.
"Class C Master Distribution Amount" means, as to any Remittance Date,
the amount, if any, distributable pursuant to Section 8.03(a)(xvii).
"Class C Subsidiary Certificate" means a Class C Subsidiary Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Subsidiary REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, as to any Remittance
Date, the amounts, if any, distributable pursuant to Section 8.03(c)(iii).
"Class I-A Interest," "Class I-AIO Interest," "Class I-B1 Interest,"
"Class I-B2 Interest," "Class I-M1 Interest," "Class I-M2 Interest" and "Class
I-Accrual Interest" means, respectively, a regular interest in the Intermediate
REMIC which is held as an asset of the Master REMIC, is entitled to monthly
distributions as provided in Section 8.03(b), and has the Original Principal
Balance, and bears interest at the Pass-Through Rate, specified in Section
2.05(c).
"Class M Certificate" means any one of the Class M-1 or M-2
Certificates executed and delivered by the Trustee.
"Class M-1 Adjusted Principal Balance" means, as to any Remittance
Date, the Class M-1 Principal Balance as of that Remittance Date minus the Class
M-1 Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-1 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.
13
"Class M-1 Cross-Over Date" means the Remittance Date on which the
Class M-1 Principal Balance (after giving effect to the distributions of
principal on the Class M-1 Certificates on such Remittance Date) is reduced to
zero.
"Class M-1 Distribution Test" means, to be considered "satisfied" for
any Remittance Date, that:
(i) such Remittance Date occurs in or after August 2005;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date
is less than or equal to 6.25%;
(iii) the Cumulative Realized Losses Test for such Remittance Date is
satisfied;
(iv) the Current Realized Loss Ratio for such Remittance Date is less
than or equal to 3.50%; and
(v) the fraction, expressed as a percentage, the numerator of which
is the sum of the Class M-1 Principal Balance, the Class M-2
Principal Balance, the Class B Principal Balance and the
Overcollateralization Amount as of such Remittance Date and the
denominator of which is the Pool Scheduled Principal Balance as
of the immediately preceding Remittance Date, is equal to or
greater than 32.250%.
"Class M-1 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date,
interest from and including the Closing Date to but excluding the
first Remittance Date) (calculated in the manner specified in
Section 1.03) at the Class M-1 Remittance Rate on the Class M-1
Adjusted Principal Balance as of such Remittance Date,
(ii) the aggregate Unpaid Class M-1 Interest Shortfall, if any,
(iii) the Class M-1 Percentage of the Formula Principal Distribution
Amount,
(iv) any Unpaid Class M-1 Principal Shortfall,
(v) any Additional Principal Distribution Amount to be distributed to
the Class M-1 Certificates pursuant to Section 8.03(a)(xiv),
(vi) any Class M-1 Liquidation Loss Interest Amount, and
(vii) any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
provided, however, that on the Class A Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class A Formula Distribution Amount" (assuming
a sufficient Amount Available) but for the operation of the proviso to such term
shall instead be included in clause (iii) or (v) of this definition, as
14
applicable; provided, further, that the aggregate of all amounts distributed for
all Remittance Dates pursuant to clauses (iii), (iv) and (v) shall not exceed
the Original Class M-1 Principal Balance.
"Class M-1 Interest Deficiency Amount" means, as to the Class M-1
Certificates and any Remittance Date, the difference, if any, between:
(i) the sum of the amounts described in clauses (i), (ii), (vi) and
(vii) of the definition of the term "Class M-1 Formula
Distribution Amount," and
(ii) the amount available for distribution to the Class M-1
Certificateholders pursuant to Section 8.03(a)(iv)(A) and (B) and
Section 8.03(a)(ix)(C) and (D) on such Remittance Date.
"Class M-1 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (i) of the definition of the term "Class
M-1 Formula Distribution Amount" plus the Unpaid Class M-1 Interest Shortfall,
if any.
"Class M-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between:
(i) the sum of:
(A) the amount distributed to Holders of the Class M-1
Certificates on such Remittance Date pursuant to Section
8.03(a)(iv)(A) and (B), and
(B) any amount distributed to the Holders of the Class M-1
Certificates pursuant to Section 8.03(d) on such Remittance
Date, and
(ii) the Class M-1 Interest Distribution Amount for such Remittance
Date.
"Class M-1 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of:
(i) the amount, if any, by which the sum of the Class A Principal
Balance and the Class M-1 Principal Balance for such Remittance
Date exceeds the sum of the Pre-Funded Amount plus the Pool
Scheduled Principal Balance for such Remittance Date (after
giving effect to all distributions of principal on the Class A
and Class M-1 Certificates on such Remittance Date), and
(ii) the Class M-1 Principal Balance (after giving effect to all
distributions of principal on the Class M-1 Certificates on such
Remittance Date).
"Class M-1 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class M-1 Remittance Rate on the Class M-1 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.
15
"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)(ix)(C) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-1 Percentage" means:
--------------------
(i) as to any Remittance Date prior to the Class A Cross-Over Date
and on which the Class M-1 Distribution Test is not satisfied,
0%, and
(ii) as to any Remittance Date after the Class A Cross-Over Date or on
which the Class M-1 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-
1 Principal Balance (minus the Unpaid Class M-1 Principal
Shortfall, if any) and the denominator of which is the sum of:
(A) the Class A Principal Balance,
(B) the Class M-1 Principal Balance (minus the Unpaid Class M-1
Principal Shortfall, if any),
(C) if the Class M-2 Distribution Test is satisfied, the Class
M-2 Principal Balance (minus the Unpaid Class M-2 Principal
Shortfall, if any), otherwise zero, and
(D) if the Class B Distribution test is satisfied, the sum of
the Class B Principal Balance and the Overcollateralization
Amount, otherwise zero.
"Class M-1 Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class M-1 Certificates less all amounts
previously distributed to Holders of Class M-1 Certificates on account of
principal.
"Class M-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(ix)(B) is less
than the Class M-1 Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class M-1 Principal
Shortfall exceed the Class M-1 Principal Balance.
"Class M-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 7.69% per annum.
"Class M-2 Adjusted Principal Balance" means, as to any Remittance
Date, the Class M-2 Principal Balance as of that Remittance Date minus the Class
M-2 Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
16
"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 August 2005;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date
is less than or equal to 6.25%;
(iii) the Cumulative Realized Losses Test for such Remittance Date is
satisfied;
(iv) the Current Realized Loss Ratio for such Remittance Date is less
than or equal to 3.50%; and
(v) the fraction, expressed as a percentage, the numerator of which
is the sum of the Class M-2 Principal Balance, the Class B
Principal Balance and the Overcollateralization Amount as of
such Remittance Date and the denominator of which is the Pool
Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 22.875%.
"Class M-2 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of:
(i) one month's interest (or as to the first Remittance Date,
interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified
in Section 1.03) at the Class M-2 Remittance Rate on the Class
M-2 Adjusted Principal Balance as of such Remittance Date,
(ii) the aggregate Unpaid Class M-2 Interest Shortfall, if any,
(iii) the Class M-2 Percentage of the Formula Principal Distribution
Amount,
(iv) any Unpaid Class M-2 Principal Shortfall,
(v) any Additional Principal Distribution Amount to be distributed
to the Class M-2 Certificates pursuant to Section 8.03(a)(xiv),
(vi) any Class M-2 Liquidation Loss Interest Amount, and
(vii) any Unpaid Class M-2 Liquidation Loss Interest Shortfall;
provided, however, that on the Class M-1 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses
(iii), (iv) and (v) of the term "Class M-1 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the proviso to
such term shall instead be included in clause (iii) or (v) of this
17
definition, as applicable; provided, further, that the aggregate of all amounts
distributed for all Remittance Dates pursuant to clauses (iii), (vi) and (v)
shall not exceed the Original Class M-2 Principal Balance.
"Class M-2 Interest Deficiency Amount" means, as to the Class M-2
Certificates and any Remittance Date, the difference, if any, between
(i) the sum of the amounts described in clauses (i), (ii), (vi) and
(vii) of the definition of the term "Class M-2 Formula
Distribution Amount" and
(ii) the amount available for distribution to the Class M-2
Certificateholders pursuant to Section 8.03(a)(v)(A) and (B) and
Section 8.03(a)(x)(C) and (D) on such Remittance Date.
"Class M-2 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (i) of the definition of the term "Class
M-2 Formula Distribution Amount" plus the Unpaid Class M-2 Interest Shortfall,
if any.
"Class M-2 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between
(i) the sum of:
(A) the amount distributed to Holders of the Class M-2
Certificates on such Remittance Date pursuant to Section
8.03(a)(v)(A) and (B), and
(B) any amount distributed to the Holders of the Class M-2
Certificates pursuant to Section 8.03(d) on such
Remittance Date, and
(ii) the Class M-2 Interest Distribution Amount for such Remittance
Date.
"Class M-2 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of:
(i) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance and the Class M-2
Principal Balance for such Remittance Date exceeds the sum of
the Pre-Funded Amount plus the Pool Scheduled Principal Balance
for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1 and Class
M-2 Certificates on such Remittance Date), and
(ii) the Class M-2 Principal Balance (after giving effect to all
distributions of principal on the Class M-2 Certificates on such
Remittance Date).
"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.
18
"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)(x)(C) is less than the Class M-2 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-2 Percentage" means:
--------------------
(i) as to any Remittance Date prior to the Class M-1 Cross-Over Date
and on which the Class M-2 Distribution Test is not satisfied,
0%, and
(ii) as to any Remittance Date after the Class M-1 Cross-Over Date or
on which the Class M-2 Distribution Test is satisfied, a
fraction, expressed as a percentage, the numerator of which is
the Class M-2 Principal Balance (minus the Unpaid Class M-2
Principal Shortfall, if any) and the denominator of which is the
sum of:
(A) the Class A Principal Balance,
(B) the Class M-1 Principal Balance (minus the Unpaid Class M-2
Principal Shortfall, if any),
(C) the Class M-2 Principal Balance (minus the Unpaid Class M-2
Principal Shortfall, if any), and
(D) if the Class B Distribution Test is satisfied, the sum of
the Class B Principal Balance (minus the Unpaid Class B-1
Principal Shortfall, if any, and the Unpaid Class B-2
Principal Shortfall, if any) and the Overcollateralization
Amount, otherwise zero.
"Class M-2 Principal Balance" means, as to any Remittance Date, the
Original Principal Balance of the Class M-2 Certificates less all amounts
previously distributed to Holders of Class M-2 Certificates on account of
principal.
"Class M-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(x)(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 floating rate (determined each Due
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 8.13% per annum.
"Class of Uncertificated Intermediate Interests" means any one of the
Class I-A, Class I-AIO, Class I-M1, Class I-M2, Class I-B1, Class I-B2 and Class
I-Accrual Interests.
"Class of Uncertificated Subsidiary Interests" means any one of the
Class S-1 or Class S-2 Interests.
19
"Class Principal Balance" means, as to any Remittance Date and each
Class of Certificates, the Original Principal Balance of such Class less all
amounts previously distributed to Holders of such Class of Certificates on
account of principal.
"Class S-1 Interest", "Class S-2(1) Interest", "Class S-2(2) Interest",
"Class S-2(3) Interest", "Class S-2(4) Interest", "Class S-2(5) Interest",
"Class S-2(6) Interest", "Class S-2(7) Interest", "Class S-2(8) Interest",
"Class S-2(9) Interest", "Class S-2(10) Interest", "Class S-2(11) Interest",
"Class S-2(12) Interest", "Class S-2(13) Interest", "Class S-2(14) Interest",
"Class S-2(15) Interest", "Class S-2(16) Interest", "Class S-2(17) Interest",
"Class S-2(18) Interest", "Class S-2(19) Interest", "Class S-2(20) Interest",
"Class S-2(21) Interest", "Class S-2(22) Interest" and "Class S-2(23) Interest",
means, respectively, a regular interest in the Subsidiary REMIC which is held as
an asset of the Intermediate REMIC, is entitled to monthly distributions as
provided in Section 8.03(c), and has the Original Principal Balance and bears
interest at the Remittance Rate, specified in Section 2.05(d).
"Class S-2 Interest" means any one of the Class S-2(1) Interest, Class
S-2(2) Interest, Class S-2(3) Interest, Class S-2(4) Interest, Class S-2(5)
Interest, Class S-2(6) Interest, Class S-2(7) Interest, Class S-2(8) Interest,
Class S-2(9) Interest, Class S-2(10) Interest, Class S-2(11) Interest, Class
S-2(12) Interest, Class S-2(13) Interest, Class S-2(14) Interest, Class S-2(15)
Interest, Class S-2(16) Interest, Class S-2(17) Interest, Class S-2(18)
Interest, Class S-2(19) Interest, Class S-2(20) Interest, Class S-2(21)
Interest, Class S-2(22) Interest and Class S-2(23) Interests.
"Closing Date" means June 27, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" means, with respect to any Contract or Reserve
Fund 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 or Reserve Fund 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 or Reserve Fund Contract,
(iii) all guarantees, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing
payment of such Contract or Reserve Fund Contract whether
pursuant to the agreement giving rise to such Contract or
Reserve Fund Contract or otherwise, and
(iv) all records in respect of such Contract or Reserve Fund
Contract.
20
"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,
(ii) either:
(A) the original title document for the related Manufactured
Home or a duplicate certified by the appropriate
governmental authority which issued the original thereof
or the application for such title document, or
(B) if the laws of the jurisdiction in which the related
Manufactured Home is located do not provide for the
issuance of title documents for manufactured housing,
other evidence of ownership of the related Manufactured
Home which is customarily relied upon in such jurisdiction
as evidence of title to a manufactured housing unit,
(iii) evidence of one or more of the following types of perfection of
the security interest in the related Manufactured Home granted
by such Contract, as appropriate:
(A) notation of such security interest on the title document,
(B) a financing statement meeting the requirements of the UCC,
with evidence of recording indicated thereon, or
(C) such other evidence of perfection of a security interest
in a manufactured housing unit as is customarily relied
upon in the jurisdiction in which the related Manufactured
Home is located,
(iv) the assignment of the Contract from the originator (if other
than Conseco Finance Corp.) to the Originator,
(v) evidence of any other Collateral Security, including with
respect to a Land-in-Lieu Contract, the mortgage or deed of
trust, and
(vi) any extension, modification or waiver agreement(s).
"Contract Interest Shortfalls" means, for any Remittance Date, all
Relief Act Shortfalls and all Prepayment Interest Shortfalls for such Remittance
Date.
"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
21
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-A Class A
Class I-AIO Class A-IO
Class I-M1 Class M-1
Class I-M2 Class M-2
Class I-B1 Class B-1
Class I-B2 Class B-2
"Counsel for the Originator and Seller" means ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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 August 1, 2005 and July
31, 2006 (inclusive), that the Cumulative Realized Losses as of
such Remittance Date are less than or equal to 7.00% of the Cut-
off Date Pool Principal Balance;
(ii) if such Remittance Date occurs between August 1, 2006 and July
31, 2007 (inclusive), that the Cumulative Realized Losses as of
such Remittance Date are less than or equal to 8.75% of the Cut-
off Date Pool Principal Balance;
(iii) if such Remittance Date occurs between August 1, 2007 and July
31, 2008 (inclusive), that the Cumulative Realized Losses as of
such Remittance Date are less than or equal to 11.75% of the Cut-
off Date Pool Principal Balance; and
22
(iv) if such Remittance Date occurs on or after August 1, 2008, 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, with respect to the Initial Contracts and the
Additional Contracts, June 1, 2001; and with respect to the Subsequent
Contracts, the applicable Subsequent Cut-off Date.
"Cut-off Date Pool Principal Balance" means the aggregate of the
Cut-off Date Principal Balances of the Contracts.
"Cut-off Date Principal Balance" means, as to any Contract, the unpaid
principal balance thereof at the applicable Cut-off Date, after giving effect to
all installments of principal due on or prior thereto. With respect to any
Staged-Funding Contract, the Cut-off Date Principal Balance means the principal
amount stated on such Contract.
"Deficiency Amount" means,
-----------------
(i) for any Remittance Date occurring prior to the Payment Date in
February 2033, the excess, if any, of Required Interest
Distributions over the Net Available Amount; and
(ii) for the Remittance Date in February 2033, the sum of
(A) the excess, if any, of the Required Interest Distributions
over the Net Available Amount, and
(B) the Class A Principal Balance after giving effect to all
distributions of principal on the Class A Certificates on
such Remittance Date (other than pursuant to a claim on
the Policy on such Remittance Date).
"Defaulted Contract" means a Contract with respect to which the
Servicer commenced repossession or foreclosure procedures, made a sale of such
Contract to a third party for repossession, foreclosure or other enforcement, or
as to which there was a payment delinquent
23
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:
(i) two certificates evidencing in the aggregate $402,500,000.00 in
Original Principal Balance of Class A Certificates,
(ii) one certificate evidencing $100,000,000.00 in Original Notional
Principal Amount of Class A-IO Certificates,
(iii) one certificate evidencing $31,250,000.00 in Original Principal
Balance of Class M-1 Certificates,
(iv) one certificate evidencing $25,750,000.00 in Original Principal
Balance of Class M-2 Certificates,
(v) one certificate evidencing $25,500,000.00 in Original Principal
Balance of Class B-1 Certificates, and
(vi) one certificate evidencing $15,000,000.00 in Original Principal
Balance of the Class B-2 Certificates,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in the Uniform Commercial Code of the State of
New York.
"Depository Participant" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date" means the third Business Day preceding each
Remittance Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section
9.02(b)(3).
"Due Date" means, as to any Contract, the date of the month on which
the scheduled monthly payment for such Contract is due.
"Due for Payment" means the Remittance Date on which Insured Amounts
are due.
"Due Period" means with respect to any Remittance Date other than the
Remittance Date in August 2001, 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
24
Remittance Date, and with respect to the Remittance Date in August 2001, the
period from and including June 1, 2001 and including July 15, 2001.
"Electronic Ledger" means the electronic master record of installment
sale contracts of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following:
(i) an account maintained with an Eligible Institution;
(ii) a trust account (which shall be a "segregated trust account")
maintained with the corporate trust department of a federal or
state chartered depository institution or trust company with
trust powers and acting in its fiduciary capacity for the
benefit of the Trustee hereunder, which depository institution
or trust company shall have capital and surplus (or, if such
depository institution or trust company is a subsidiary of a
bank holding company system, the bank holding company shall have
capital and surplus) of not less than $50,000,000 and the
securities of such depository institution or trust company (or,
if such depository institution or trust company is a subsidiary
of a bank holding company system and such depository
institution's or trust company's securities are not rated, the
securities of the bank holding company) shall have a credit
rating from each of ▇▇▇▇▇'▇ (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
Fitch to downgrade or withdraw their then-current ratings
assigned to the Certificates, as confirmed in writing by
Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
"Eligible Institution" means any depository institution (which may be
the Trustee or an Affiliate of the Trustee) organized under the laws of the
United States or any State, the deposits of which are insured to the full extent
permitted by law by the Bank Insurance Fund (currently administered by the
Federal Deposit Insurance Corporation), which is subject to supervision and
examination by federal or state authorities and whose short-term deposits have
been rated P-1 by ▇▇▇▇▇'▇ (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;
25
(ii) both
(A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by
any depository institution or trust company (including the
Trustee or any Affiliate of the Trustee, acting in its
commercial capacity) incorporated under the laws of the
United States of America or any State thereof and subject
to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, the
commercial paper or other short-term deposits of such
depository institution or trust company (or, in the case
of a depository institution which is the principal
subsidiary of a holding company, the commercial paper or
other short-term debt obligations of such holding company)
are rated at least P-1 by ▇▇▇▇▇'▇, 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; and
26
(vii) other obligations or securities that are acceptable to the
Rating Agencies as an Eligible Investment hereunder and will not
reduce the rating assigned to any Class of Certificates by any
of the Rating Agencies below the lower of the then-current
rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency, as evidenced in writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
Notwithstanding the foregoing, securities that represent the right to
receive payments only of interest due on underlying obligations shall not be
included as Eligible Investments, whether or not such securities otherwise fall
within (i) through (vii) above.
"Eligible Servicer" means the Originator or any Person qualified to act
as Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than an aggregate of $100,000,000 in
outstanding principal amount of manufactured housing conditional sales contracts
and installment loan agreements and, so long as any FHA/VA Contract is
outstanding, which Person is qualified under FHA/VA Regulations to act as a
servicer of all such FHA/VA Contracts.
"Eligible Substitute Contract" means, as to any Replaced Contract for
which such Eligible Substitute Contract is being substituted pursuant to Section
3.06(b), a Contract that
(i) as of the date of its substitution, satisfies all of the
representations and warranties (which, except when expressly
stated to be as of origination, shall be deemed to be determined
as of the date of its substitution rather than as of the Cut-off
Date or the Closing Date) in Sections 3.02 and 3.03 and does not
cause any of the representations and warranties in Section 3.04,
after giving effect to such substitution, to be incorrect,
(ii) after giving effect to the scheduled payment due in the month of
such substitution, has a Scheduled Principal Balance that is not
greater than the Scheduled Principal Balance of such Replaced
Contract,
(iii) has a Contract Rate that is at least equal to the Contract Rate
of such Replaced Contract,
(iv) has a remaining term to scheduled maturity that is not greater
than the remaining term to scheduled maturity of the Replaced
Contract, and
(v) is a Land-and-Home Contract if the Replaced Contract is a Land-
and-Home Contract and is otherwise secured by a Manufactured
Home that is similar in type and value to the collateral serving
the Replaced Contract. If more than one Contract is being
substituted pursuant to Section 3.06(b) for more than one
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.
27
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Contracts comprising
a portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"FHA/VA Contract" means a Contract that, at its origination, was
insured by the Federal Housing Administration or partially guaranteed by the
Veterans Administration.
"FHA/VA Regulations" means, as to any FHA/VA Contract, the contractual
agreements and regulations of the Federal Housing Administration or the Veterans
Administration, as the case may be, providing or governing the terms of the
insurance for such Contract by the Federal Housing Administration or the partial
guarantee for such Contract by the Veterans Administration, as the case may be.
"Fidelity Bond" means the fidelity bond maintained by the Servicer or
any similar replacement bond, meeting the requirements of Section 5.09, as such
bond relates to Contracts comprising a portion of the corpus of the Trust.
"Final Remittance Date" means the Remittance Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
12.03.
"Fitch" means Fitch, Inc., or any successor thereto; provided that if
Fitch does not then have a rating outstanding on any of the Class A, Class A-IO,
Class M-1, Class M-2 or Class B Certificates, then references herein to "Fitch"
shall be deemed to refer to the NRSRO then rating any Class of the Certificates
(or, if more than one such NRSRO is then rating any Class of the Certificates,
to such NRSRO as may be designated by the Servicer), and references herein to
ratings by or requirements of Fitch shall be deemed to have the equivalent
meanings with respect to ratings by or requirements of such NRSRO.
"Formula Principal Distribution Amount" means, as of any Remittance
Date, the sum of:
(i) all scheduled payments of principal due on each outstanding
Contract during the related Due Period as specified in the
amortization schedule at the time applicable thereto (after
adjustments for previous Partial Principal Prepayments and any
adjustment to such amortization schedule by reason of any
bankruptcy of an Obligor or similar proceeding or any
moratorium or similar waiver or grace 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
28
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 2001 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 August 2001, 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, 2001.
"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.
29
"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 June 18, 1984, and which have an aggregate principal balance as of the
Cut-off Date of $337,700,575.25.
"Insurance Agreement" means the Insurance and Indemnity Agreement,
dated as of June 27, 2001, among the Certificate Insurer, the Trust, the
Servicer, the Originator, the Seller and the Trustee.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract or any FHA/VA Contract.
"Insured Amounts" means, with respect to any Remittance Date, any
Deficiency Amount for such Remittance Date.
"Insured Payments" means the aggregate amount actually paid by the
Certificate Insurer to the Trustee in respect of (i) the Deficiency Amount for
any Remittance Date and (ii) any Preference Amount (as defined in the Policy)
for any Business Day.
"Intermediate Interest Principal Balance" means, with respect to each
Class of Intermediate REMIC Accretion Directed Interests, one-half the Principal
Balance of the Corresponding Certificate Class and with respect to the Class
I-Accrual Interest, one-half the sum of the Pool Scheduled Principal Balance,
the Pre-Funded Amount and the Overcollateralization Amount.
"Intermediate Interest Shortfall" means, with respect to each Class of
Uncertificated Intermediate Interests and any Remittance Date, the amount, if
any, by which the amount distributed on such Class on such Remittance Date
pursuant to Section 8.03(b)(i) is less than the amount specified in Section
8.03(b)(i).
"Intermediate REMIC" means the segregated pool of assets consisting of
the Uncertificated Subsidiary Interests, as to which assets a separate REMIC
election is to be made.
"Intermediate REMIC Accretion Directed Interests" means the
Uncertificated Intermediate Interests, other than the Class I-Accrual Interest
and the Class I-AIO Interest.
"Land-and-Home Contract" means a Contract that is secured by a Mortgage
on real estate on which the related Manufactured Home is situated, and which
Manufactured Home is considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.
"Land-and-Home Contract File" means, as to each Land-and-Home Contract,
(i) the original executed copy of the Land-and-Home Contract or a
lost note affidavit in a form acceptable to the Trustee;
(ii) the original related Mortgage with evidence of recording
thereon (or, if the original Mortgage has not yet been
returned by the applicable recording office, a copy thereof,
certified by such recording office, which will be replaced by
the
30
original Mortgage when it is so returned) and any title
document for the related Manufactured Home;
(iii) the assignment of the Land-and-Home Contract and the related
Mortgage from the originator (if other than Conseco Finance
Corp.) to the Originator;
(iv) an endorsement of such Land-and-Home Contract by the Seller to
the Trustee or in blank;
(v) an assignment of the related Mortgage to the Trustee or in
blank; and
(vi) any extension, modification or waiver agreement(s).
"Land-in-Lieu Contract" means a Contract that is secured by a security
interest in a Manufactured Home and a mortgage or deed of trust on real estate
on which such Manufactured Home is situated, but such Manufactured Home is not
considered or classified as part of the real estate under the laws of the
jurisdiction in which it is located.
"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,
31
(iii) the Contract Rate and (iv) the maturity date.
"Loan-to-Value Ratio" means:
(i) with respect to any Contract other than a Land-in-Lieu
Contract, one minus a fraction, the numerator of which is the
total amount down (which may include both cash (plus, in
certain cases, fees and insurance premiums financed, but not
buydown points) and, for certain Contracts, the amount of any
equity in land on which a lien has been granted) and the
denominator of which is the sum of the original principal
amount and such amount down, and
(ii) with respect to a Land-in-Lieu Contract, one minus a
fraction, the numerator of which is the appraised value of
land and the denominator of which is the original principal
amount.
"Manufactured Home" means a unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.
"Master Certificates" means all of the Certificates other than the
Class C Subsidiary Certificate and the Class C Intermediate Certificate.
"Master REMIC" means the segregated pool of assets consisting of the
Uncertificated Intermediate Interests, as to which a separate REMIC election is
to be made.
"Maturity Date" means, as to any Certificate, other than a Class C
Certificate, and as to any Uncertificated Subsidiary Interest and Uncertificated
Intermediate Interest, the latest possible maturity date for purposes of
complying with the REMIC Provisions governing "regular interests." The Maturity
Dates for such Certificates, Uncertificated Intermediate Interests and
Uncertificated Subsidiary Interests are set forth in Sections 2.05(c) and (d).
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Remittance Date, one-twelfth
of the product of 0.50% and the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date (or, with respect to the first Remittance
Date, the Cut-off Date Pool Principal Balance as of the Closing Date).
"Moody's" means ▇▇▇▇▇'▇ 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-1, Class M-2 or
Class B Certificates, then references herein to "▇▇▇▇▇'▇" 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.
32
"Mortgage" means the mortgage, deed of trust, security deed or similar
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.
"Mortgaged Property" means the property subject to the lien of a
Mortgage.
"Net Available Amount" means, for any Remittance Date, the Adjusted
Amount Available minus all amounts payable pursuant to Section 8.03(a)(i).
"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.
"Notional Principal Amount" means, as to the Class I -AIO Certificates
and the Class A-IO Certificates and each Remittance Date identified below, the
related amount set forth below:
Remittance Date Notional Principal Amount
--------------- -------------------------
August, September, October 2001 $ 100,000,000
November, December 2001, January 2002 98,700,000
February, March, April 2002 96,600,000
May, June, July, 2002 94,500,000
August, September, October 2002 92,300,000
November, December 2002, January 2003 89,900,000
February, March, April 2003 87,600,000
May, June, July 2003 85,100,000
August, September, October 2003 82,600,000
November, December 2003, January 2004 80,100,000
February, March, April 2004 77,700,000
May, June, July 2004 75,300,000
August, September, October 2004 73,000,000
November, December 2004, January 2005 70,800,000
February, March, April 2005 68,600,000
May, June, July 2005 66,500,000
August, September, October 2005 64,400,000
November, December 2005, January 2006 62,400,000
February, March, April 2006 60,500,000
May, June, July 2006 58,600,000
August, September, October 2006 56,800,000
November, December 2006, January 2007 55,000,000
February, March, April 2007 53,200,000
"NRSRO" means any nationally recognized statistical rating
organization.
33
"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, Uncertificated Intermediate Interests and Uncertificated
Subsidiary Interests, the respective amount set forth with respect to such Class
in Sections 2.05(b), 2.05(c) and 2.05(d).
"Overcollateralization Amount" means, as of any Remittance Date, the
amount by which the aggregate Class Principal Balance of the Certificates as of
such Remittance Date is less than the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount as of the immediately preceding Remittance
Date.
"Overcollateralization Amount Increase" means, as of any Remittance
Date, the amount by which the Overcollateralization Amount on that Remittance
Date exceeds the Overcollateralization Amount as of the immediately preceding
Remittance Date.
"Partial Principal Prepayment" means
(i) any Principal Prepayment other than a Principal Prepayment in
Full and
(ii) any cash amount deposited in the Certificate Account pursuant
to the provision in Section 3.06(a) or pursuant to Section
3.06(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Percentage Interest" means, as to any Certificate, the percentage
interest evidenced thereby in distributions made on the related Class, such
percentage interest being equal to, in the case of the Class A, Class M and
Class B Certificates, the percentage (carried to eight places) obtained from
dividing the denomination of such Certificate by the Original Principal Balance
of the related Class, or, in the case of a Class A-IO Certificate, by the
Original Notional Principal Amount; and in the case of the Class B-3I and Class
C Certificates, the percentage specified on the face of such Certificate. The
aggregate Percentage Interests for each Class of Certificates shall equal 100%,
respectively.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
34
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Policy" means the financial guaranty insurance policy (#AB0471BE)
issued by the Certificate Insurer irrevocably guaranteeing timely payments of
interest and ultimate payment of principal on the Class A Certificates.
"Policy Payments Account" means the policy payments account maintained
by the Trustee pursuant to Section 8.08(b) hereof.
"Pool Factor" means, at any time, the percentage derived from a
fraction, the numerator of which is the aggregate Principal Balance of each
Class of Certificates at such time and the denominator of which is the Cut-off
Date Pool Principal Balance.
"Pool Scheduled Principal Balance" means, as of any Remittance Date,
the aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Due Period.
"Post-Funding Remittance Date" means the first Remittance Date after
the last day of the Pre-Funding Period.
"Pre-Funded Amount" means with respect to any date of determination,
the amount then on deposit in the Pre-Funding Account, after giving effect to
any sale of Subsequent Contracts to the Trust on such date, excluding any
investment earnings.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.07.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of
(i) the date on which the amount on deposit in the Pre-Funding
Account is less than $10,000,
(ii) the Funding Termination Date or
(iii) the date on which an Event of Termination occurs.
"Pre-Funding Subaccount" means the subaccount, if any, so designated,
established and maintained pursuant to Section 8.07.
"Preference Amount" means any payment of principal or interest on a
Class A Certificate which has become Due for Payment and which is made to an
owner of a Class A Certificate by or on behalf of the Trustee which has been
deemed a preferential transfer and was previously recovered from its owner
pursuant to the United States Bankruptcy Code in accordance with a final,
nonappealable order of a court of competent jurisdiction.
"Prepayment Interest Shortfall" means, for any Remittance Date, an
amount equal to the excess, if any, of
35
(i) one month's interest on the outstanding principal balance of
each Contract that was subject to a prepayment during the
related Due Period at the related Contract Rate, or such lower
contract rate as may be in effect for such Contract because of
application of the Soldiers' and Sailors' Civil Relief Act of
1940, over
(ii) for each contract that was subject to a Principal Prepayment
in Full during the related Due Period, the amount of interest
actually remitted by the related Obligor for the month in
which such Principal Prepayment in Full occurred.
"Premium" means, as of any Remittance Date, the fee payable to the
Certificate Insurer in accordance with the Policy.
"Principal Prepayment" means a payment or other recovery of principal
on a Contract (exclusive of Liquidation Proceeds) which is received in advance
of its scheduled due date and applied upon receipt (or, in the case of a Partial
Principal Prepayment, upon the next scheduled payment date on such Contract) to
reduce the outstanding principal amount due on such Contract prior to the date
or dates on which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the
entire principal balance of a Contract.
"Rating Agencies" means Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
"Realized Losses" means, as to any Remittance Date, the aggregate Net
Liquidation Losses of all Contracts that became Liquidated Contracts during the
immediately preceding month.
"Record Date" means the Business Day immediately preceding the related
Remittance Date.
"Regular Certificate" means a Class A, Class A-IO, Class M, Class B or
Class B-3I Certificate.
"Relief Act Shortfalls" means any interest shortfalls resulting from
the application of the Soldiers' and Sailors' Civil Relief Act of 1940.
"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 August 2001.
36
"Remittance Rate" means with respect to each Class of Certificates, the
rate set forth in Section 2.05(b), and with respect to each Class of
Uncertificated Intermediate Interests, the rate set forth in Section 2.05(c).
"Replaced Contract" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Contract to be repurchased
pursuant to Section 3.06, an amount equal to
(i) the remaining principal amount outstanding on such Contract
(or, with respect to an Unfunded Contract being repurchased
pursuant to Section 3.06(c), the Cut-off Date Principal
Balance of such Unfunded Contract), plus
(ii) interest at the Contract Rate on such Contract from the end of
the Due Period with respect to which the Obligor last made a
payment through the end of the immediately preceding Due
Period.
"Required Interest Distributions" means, with respect to any Remittance
Date, the amount specified in clause (i) of the definition of the term "Class A
Formula Distribution Amount," net of any Contract Interest Shortfalls.
"Requisite Reserve Fund Amount" means, for any Remittance Date, the
amount (but not less than zero) equal to
(i) $2,500,000, minus
(ii) the amount, if any, by which the Overcollateralization Amount
exceeds $7,500,000
on the Remittance Date after the Overcollateralization Amount is equal to
$10,000,000, and for all periods thereafter, zero.
"Reserve Fund" means the account so designated, established and
maintained pursuant to Section 8.04.
"Reserve Fund Contracts" means the manufactured housing contracts and
installment loan agreements deposited in the Reserve Fund on the Closing Date,
and identified on Exhibit Q hereto.
"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.
37
"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 previous Partial Principal Prepayments and to
the payment of principal due on such Due Date and irrespective of any
delinquency in payment by, or extension granted to, the related Obligor.
"Servicer" means the Originator until any Service Transfer hereunder
and thereafter means the new servicer appointed pursuant to Article VII.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Originator, as the same may be amended from time
to time.
"Sixty-Day Delinquency Ratio" means, as to any Remittance Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate of
the outstanding balances of all Contracts that were delinquent 60 days or more
as of the end of the related Due Period (including Contracts in respect of which
the related Manufactured Homes have been repossessed but are still in
inventory), and the denominator of which is the Pool Scheduled Principal Balance
as of such Remittance Date.
"Staged-Funding Contract" means an Initial or Additional Contract with
respect to which the Originator has agreed to make multiple disbursements (up to
the related Cut-off Date Principal Balance) with respect to the purchase of the
related Manufactured Home and improvement of the related real estate, but not
all such disbursements have been made as of the Closing Date.
"Staged-Funding Contract Reserve Account" means the account established
and maintained pursuant to Section 3.08.
"Standard & Poor's" means Standard & Poor's Rating Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ 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.
38
"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.
"Subsequent Cut-off Date" means, with respect to a Subsequent Contract,
either the last day of the calendar month in which the related Subsequent
Transfer Date occurs or the last day of the preceding calendar month, as
specified by the Seller in the related Addition Notice.
"Subsequent Transfer Date" means, with respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Contracts are sold
to the Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument dated as of a Subsequent Transfer Date executed by the Seller
substantially in the form of Exhibit O, by which the Seller sells Subsequent
Contracts to the Trust.
"Subsidiary Interest Shortfall" means, with respect to each Class of
Uncertificated Subsidiary Interests and any Remittance Date, the amount, if any,
by which the amount distributed on such Class on such Remittance Date pursuant
to Section 8.03(b)(i) is less than the amount specified in Section 8.03(b)(i).
"Subsidiary Interest Adjusted Principal Balance" means, as to any
Remittance Date and each Class of Uncertificated Subsidiary Interests, the
Subsidiary Interest Principal Balance of such Class less its allocable share of
the amount, if any, by which the aggregate Subsidiary Interest Principal Balance
of the Class S-1 and Class S-2 Interests exceeds the Pool Scheduled Principal
Balance, such excess to be allocated sequentially; i.e., first to the Class S-1
Interest up to its Subsidiary Interest Principal Balance, then to the Class
S-2(1) Interest any remaining excess, up to its Subsidiary Interest Principal
Balance, and last to the S-2(23) Interest.
"Subsidiary Interest Principal Balance" means, as to any Remittance
Date and each Class of Uncertificated Subsidiary Interests, the Original
Principal Balance of such Class less all amounts previously distributed under
Section 8.03(c) in respect of such Class on account of principal.
"Subsidiary REMIC" means the segregated pool of assets 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,
39
(iv) all remittances, deposits and payments made into the 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
(vi) all documents contained in the Contract Files or the Land-and-
Home Contract Files.
"Transfer Agreement" means that certain Transfer Agreement between
Conseco Finance Securitizations Corp., as Purchaser, and Conseco Finance Corp.,
as Seller, dated as of even date herewith.
"Trust" means the trust created by this Agreement, known as
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust
2001-2, 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,
(ix) the Capitalized Interest Account,
(x) the Pre-Funding Account,
(xi) the Reserve Fund and all Reserve Fund Contracts, and
(xii) the Policy and the Policy Payments Account.
40
"Uncertificated Intermediate Interests" means the Class I-A, Class I-
AIO, Class I-M1, Class I-M2, Class I-B1, Class I-B2 and Class I-Accrual
Interests, collectively.
"Uncertificated Subsidiary Interests" means the Class S-1 and Class S-2
Interests, collectively.
"Undelivered Contract" means as of any date of determination an Initial
or Additional Contract identified, on the exception report attached to the
Acknowledgement delivered by the Trustee under Section 2.04, as a Land-and-Home
Contract as to which the Trustee did not receive the related Land-and-Home
Contract File as of the Closing Date and has not received the related Land-and-
Home Contract File and remitted payment to the Seller pursuant to Section
8.07(c).
"Undelivered Contract Subaccount" means the subaccount so designated
and established and maintained pursuant to Section 8.07.
"Underwriters" means ▇▇▇▇▇▇ Brothers, Inc., Banc One Capital Markets,
Inc., Credit Suisse First Boston Corporation and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related
Terms Agreement, each dated as of June 13, 2001, 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)(viii)(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
41
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
(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)(xi)(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)(xi)(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)(xii)(C).
"Unpaid Class B-3I Shortfall" means, as to any Remittance Date, the
amount, if any, by which the aggregate of the Class B-3I Shortfalls for prior
Remittance Dates is in excess of the amounts distributed on prior Remittance
Dates to Holders of Class B-3I Certificates pursuant to Section 8.03(a)(xv) in
respect of any Unpaid Class B-3I Shortfall.
"Unpaid Class M-1 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
42
amount thereof from such prior Remittance Date to such current Remittance Date
(calculated in the manner specified in Section 1.03).
"Unpaid Class M-2 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class M-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of
(i) the amount, if any, of the remainder of:
(A) the Class M-1 Liquidation Loss Interest Amount, if
any, for the immediately prior Remittance Date, plus
(B) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior
Remittance Date, minus
(C) all amounts distributed to the Holders of the Class
M-1 Certificates on account of any Unpaid Class M-1
Liquidation Loss Interest Shortfall pursuant to
Section 8.03(a)(ix)(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)(x)(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
43
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)(ix)(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)(x)(A).
"Unpaid Intermediate Interest Shortfall" means, as to any Remittance
Date and any Class of Uncertificated Intermediary Interests other than the Class
I-AIO Interest, the amount, if any, of the Intermediary Interest Shortfall for
the prior Remittance Date with respect to such Class, plus accrued interest (to
the extent payment thereof is legally permissible) at 1/12th of the Adjusted
Weighted Average Contract Rate (or 2.50% in the case of the Class I-AIO
Interest) on the amount thereof from such prior Remittance Date to such current
Remittance Date.
"Unpaid Subsidiary Interest Shortfall" means, as to any Remittance Date
and any Class of Uncertificated Subsidiary Interests, the amount, if any, of the
Subsidiary Interest Shortfall for the prior Remittance Date with respect to such
Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Weighted Average Contract 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 2001-2. 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,
Intermediary 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), the Capitalized Interest Account, the Pre-Funding
Account and the Reserve
44
Fund, as a REMIC. The Trust shall be administered pursuant to the provisions of
this Agreement for the benefit of the Certificateholders.
(b) The Seller hereby transfers, assigns, delivers, sells, sets
over and otherwise conveys to the Trustee on behalf of the Trust, by execution
of an assignment substantially in the form of Exhibit D hereto,
(i) all the right, title and interest of the Seller in and to the
Initial and Additional Contracts, including, without
limitation, all right, title and interest in and to the
Collateral Security, all rights to receive payments on or with
respect to the Initial and Additional Contracts (other than the
principal and interest due on the Contracts on or before the
applicable Cut-off Date) and all rights of the Seller under the
Transfer Agreement,
(ii) all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing an Initial or Additional Contract
for the benefit of the owner of such Contract,
(iii) all rights under all FHA/VA Regulations pertaining to any
Initial or Additional Contract that is an FHA/VA Contract,
(iv) 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,
(vi) $2,705,660.73 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),
(vii) amounts on deposit in the Capitalized Interest Account,
(viii) amounts on deposit in the Pre-Funding Account,
(ix) the Reserve Fund Contracts, including, without limitation, the
related Collateral Security and all rights to receive payments
on or with respect to the Reserve Fund Contracts (other than
principal and interest due thereon before the Cut-off Date),
(x) the Policy, and
(xi) 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
45
disbursements on any Staged-Funding Contract made on or before the Funding
Termination Date shall automatically become the property of the Trust, without
further action by the Seller or the Trust. The payment to the Seller by the
Trust and the transfer of additional obligations to the Trust pursuant to this
Section 2.01(c) and Section 3.06(c)(2) shall be a purchase by the Trust of
qualified mortgages pursuant to a fixed price contract within the meaning of
Section 860G(a)(3) of the Code.
Although the parties intend that the conveyance of the Seller's right,
title and interest in and to the Contracts and the Collateral Security pursuant
to this Agreement and each Subsequent Transfer Instrument shall constitute a
purchase and sale and not a pledge of security for loans from the
Certificateholders, it is the intent of this Agreement that if such conveyances
are deemed to be a pledge of security for loans from the Certificateholders or
any other Persons including the Certificate Insurer (the "Secured Obligations"),
the parties intend that the rights and obligations of the parties to the Secured
Obligations shall be established pursuant to the terms of this Agreement. The
parties also intend and agree that the Seller shall be deemed to have granted to
the Trustee, and the Seller does hereby grant to the Trustee, a perfected first-
priority security interest in the items designated in Section 2.01(b)(i) through
2.01(b)(xi) above and in each Subsequent Transfer Instrument, and all proceeds
thereof, to secure the Secured Obligations, and that this Agreement shall
constitute a security agreement under applicable law. If the trust created by
this Agreement terminates prior to the satisfaction of the claims of any Person
under any Certificates or the Secured Obligations, the security interest created
hereby shall continue in full force and effect and the Trustee shall be deemed
to be the collateral agent for the benefit of such Person.
Section 2.02 Conditions to the Closing. On or before the Closing Date,
the Seller shall deliver or cause to be delivered to the Trustee each of the
documents listed below:
(i) the List of Contracts identifying all Initial and Additional
Contracts, certified by the Chairman of the Board, President
or any Vice President of the Seller;
(ii) a certificate of an officer of each of the Originator and
Seller substantially in the form of Exhibit E hereto;
(iii) an Opinion of Counsel for each of the Originator and Seller
substantially in the form of Exhibit F hereto;
(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
46
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 with the Secretary of State of Minnesota of
UCC-1 financing statements, (A) executed by the Originator as
debtor, naming the Seller as secured party and listing the
Contracts as collateral, and (B) executed by the Seller as
debtor, naming the Trustee as secured party and listing the
Contracts as collateral;
(ix) the Land-and-Home Contract File or Contract File, as
applicable, for each Initial and Additional Contract;
(x) an executed copy of the Assignment of the Seller substantially
in the form of Exhibit D hereto with respect to the Contracts
and the Reserve Fund Contracts;
(xi) an Officer's Certificate listing the Servicer's Servicing
Officers;
(xii) evidence of continued coverage of the Servicer under the
Errors and Omissions Protection Policy;
(xiii) evidence of deposit in the Certificate Account of all funds
received with respect to the Initial and Additional Contracts
after the Cut-off Date to the Closing Date, other than amounts
due on or before the Cut-off Date, together with an Officer's
Certificate to the effect that such amount is correct;
(xiv) an Officer's Certificate confirming that the Originator's
internal audit department has reviewed the original or a copy
of each Initial and Additional Contract and each related
Contract File or Land-and-Home Contract File, as applicable,
that each Initial and Additional Contract and related Contract
File or Land-and-Home Contract File, as applicable, conforms
in all material respects with the List of Contracts and that
each such Contract File or Land-and-Home Contract File, as
applicable, is complete in all material respects and that each
Manufactured Home securing a Contract is covered by a Hazard
Insurance Policy as required by Section 3.02(f);
(xv) a letter from Moody's confirming that it has assigned the
Class A Certificates a rating of "Aaa," the Class M-1
Certificates a rating of "Aa2," the Class M-2 Certificates a
rating of "A2," and the Class B-1 Certificates a rating of
"Baa2;"
(xvi) a letter from Fitch confirming that it has assigned the Class
A Certificates a rating of "AAA," the Class M-1 Certificates a
rating of "AA," the Class M-2 Certificates a rating of "A+,"
and the Class B-1 Certificates a rating of "BBB;"
(xvii) a letter from Standard & Poor's confirming that it has
assigned the Class A Certificates a rating of "AAA," the Class
M-1 Certificates a rating of "AA," the
47
Class M-2 Certificates a rating of "A," and the Class B-1
Certificates a rating of "BBB;"
(xviii) the demand note described in Section 3.06(c)(5);
(xix) an executed copy of the Transfer Agreement;
(xx) evidence of the deposit of $0 in the Staged-Funding Contract
Reserve Account;
(xxi) evidence of the deposit of $0 in the Capitalized Interest
Account;
(xxii) evidence of the deposit of $4,009.62 in the Pre-Funding
Account;
(xxiii) 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;
(xxiv) the Policy; and
(xxv) any other documents or certificates that the Trustee may
reasonably request.
SECTION 2.03 Conveyance of the Subsequent Contracts.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Contracts identified on the List of
Contracts attached to the Subsequent Transfer Instrument, including all rights
to receive payments on or with respect to the Subsequent Contracts due after the
applicable Cut-off Date, and all items with respect to such Subsequent Contracts
in the related Contract Files and Land-and-Home Contract Files. The transfer to
the Trustee by the Seller of the Subsequent Contracts shall be absolute and is
intended by the Seller, the Trustee and the Certificateholders to constitute and
to be treated as a sale of the Subsequent Contracts by the Seller to the Trust.
The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Contracts. The purchase price of 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:
48
(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; and
(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.
(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
49
address the Subsequent Contracts and their conformity in all material
respects to the characteristics described in Section 3.04(c) of this
Agreement.
(2) Evidence that as a result of the purchase by the Trust of
the Subsequent Contracts, the Class A, Class M and Class B-1 Certificates
shall not receive from any of the Rating Agencies a lower credit rating
than the rating assigned to such Certificates as of the Closing Date.
(3) Evidence that the aggregate amount on deposit in the Pre-
Funding Account and the Staged-Funding Contract Reserve Account as of the
Closing Date, minus the aggregate Cut-off Date Principal Balance of any
Subsequent Contracts that had been specifically identified as Subsequent
Contracts as of the Closing Date (and purchased by the Trust on or before
the first Remittance Date), did not exceed 25% of the aggregate Original
Principal Balance of the Master Certificates.
SECTION 2.04 Acceptance by Trustee.
(a) On the Closing Date and each Subsequent Transfer Date, if the
conditions set forth in Section 2.02 and 2.03, respectively, have been
satisfied, the Trustee shall deliver a certificate to the Seller substantially
in the form of Exhibit G hereto acknowledging conveyance of the Contracts,
identified on the applicable List of Contracts and the related Contract Files
and Land-and-Home Contract Files to the Trustee and declaring that the Trustee,
directly or through a custodian, will hold all Contracts that have been
delivered in trust, upon the terms herein set forth, for the use and benefit of
all Certificateholders and on the Closing Date the Trustee shall issue to or
upon the order of the Seller Certificates representing ownership of a beneficial
interest in 100% of the Trust.
(b) If, in its review of the Land-and-Home Contract Files and the
Contract Files as described in Exhibits H-1 and H-2, the Trustee or its
Custodian discovers a breach of the representations or warranties set forth in
Sections 2.02(xiv), 3.02, 3.03, 3.04 or 3.05, the Seller and the Originator
shall cure such breach or repurchase or replace such Contract pursuant to
Section 3.06.
SECTION 2.05 REMIC Provisions.
(a) The Originator, as Servicer, and the Class C Subsidiary
Certificateholder, Class C Intermediate Certificateholder and the Class C Master
Certificateholder, by acceptance thereof, each agrees that, in accordance with
the requirements of Section 860D(b)(1) of the Code, the federal tax return of
each of the Subsidiary REMIC, Intermediate REMIC and Master REMIC for its first
taxable year shall provide that the Subsidiary REMIC, Intermediate REMIC or
Master REMIC, as the case may be (excluding the Capitalized Interest Account,
the obligation and related demand note of the Originator pursuant to Section
3.06(c), the Staged-Funding Contract Reserve Account, the Pre-Funding Account
and the Reserve Fund) elects to be treated as a REMIC for such taxable year and
all subsequent taxable years. In furtherance of the foregoing, the Trustee (at
the direction of the Originator, the Seller or the Servicer) and the Originator,
the Seller and the Servicer shall take, or refrain from taking, all such action
as is necessary to maintain the status of each of the Subsidiary REMIC,
Intermediate REMIC or
50
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 seven 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:
51
Original Class
Pass-Through Principal Balance (or
Rate Notional Principal
Class ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (1)) Maturity Date
------------------------ ----------------- -------------------------- ------------------------
Class A (1) $ 402,500,000 February 2033
Class A-IO 2.50% $ (2) February 2033
Class M-1 7.69% (3) $ 31,250,000 February 2033
Class M-2 8.13% (3) $ 25,750,000 February 2033
Class B-1 9.44% (3) $ 25,500,000 February 2033
Class B-2 10.15% (3) $ 15,000,000 February 2033
Class B-3I (4) (4)
---------------
(1) A floating rate (determined each Due Period as of each Remittance Date)
equal to the Adjusted Weighted Average Contract Rate, but in no event
greater than (i) for each Remittance Date prior to and including the
first Remittance Date on which the Pool Scheduled Principal Balance is
equal to or less than 10% of the Cut-off Date Pool Principal Balance,
6.60% per annum, and (ii) for each Remittance Date after the first
Remittance Date on which the Pool Scheduled Principal Balance is equal
to or less than 10% of the Cut-off Date Pool Principal Balance, 7.10%
per annum.
(2) The Class A-IO Certificate will receive each Remittance Date the
distribution on such Remittance Date to the Class I-AIO Interest under
Section 8.03(b)(i), which is equivalent to interest accrued at the
Class A-IO Remittance Rate on the Class A-IO Notional Principal Amount.
(3) A floating rate (determined monthly on each Remittance Date) equal to
the Adjusted Weighted Average Contract Rate, but in no event greater
than the related Remittance Adjusted Rate specified above.
(4) The Class B-3I Certificates are interest-only Certificates entitled to
the payment of the Class B-3I Distribution Amount.
The Seller does not represent that any Class of Regular Certificates will, in
fact, mature on any given date. 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
seven 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:
52
Pass-Through Original
Class Rate ▇▇▇ ▇▇▇▇▇ Principal Balance Maturity Date
------------------ --------------------------------------- -------------------- ----------------
Class I-A Adjusted Weighted Average Contract Rate $ 201,250,000 February 2033
Class I-AIO 2.500% per annum through and (1) February 2033
including the Remittance Date in
April 2007 and 0% thereafter
Class I-M1 Adjusted Weighted Average $ 15,625,000 February 2033
Contract Rate
Class I-M2 Adjusted Weighted Average $ 12,875,000 February 2033
Contract Rate
Class I-B1 Adjusted Weighted Average $ 12,750,000 February 2033
Contract Rate
Class I-B2 Adjusted Weighted Average $ 7,500,000 February 2033
Contract Rate
Class I-Accrual Adjusted Weighted Average $ 250,000,000 February 2033
Contract Rate
(1) A Notional Principal Amount equal to the Subsidiary Interest Adjusted
Principal Balance of the Class S-2 Interests as described in Section
8.03(b)(i)(B).
The Seller does not represent that any Class of Uncertificated Intermediate
Interests will, in fact, mature on any given date. The Class C Intermediate
Certificate is being issued in a single Class and is hereby designated by the
Seller as constituting the sole class of "residual interests" in the
Intermediate REMIC for purposes of Section 860G(a)(2) of the Code.
(d) The Uncertificated Subsidiary Interests are being issued in
twenty-four classes and are hereby designated by the Seller as constituting the
"regular interests" in the Subsidiary REMIC for the purposes of Section
860G(a)(1) of the Code. The following terms of the Uncertificated Subsidiary
Interests are irrevocably established as of the Closing Date:
53
Pass-Through Original
Class Rate Per Annum Principal Balance Maturity Date
------------------- -------------------- ----------------------- -----------------
Class S-1 Weighted Average $ 400,000,000 February 2033
Contract Rate
Class S-2(1) Weighted Average 1,300,000 February 2033
Contract Rate
Class S-2(2) Weighted Average 2,100,000 February 2033
Contract Rate
Class S-2(3) Weighted Average 2,100,000 February 2033
Contract Rate
Class S-2(4) Weighted Average 2,200,000 February 2033
Contract Rate
Class S-2(5) Weighted Average 2,400,000 February 2033
Contract Rate
Class S-2(6) Weighted Average 2,300,000 February 2033
Contract Rate
Class S-2(7) Weighted Average 2,500,000 February 2033
Contract Rate
Class S-2(8) Weighted Average 2,500,000 February 2033
Contract Rate
Class S-2(9) Weighted Average 2,500,000 February 2033
Contract Rate
Class S-2(10) Weighted Average 2,400,000 February 2033
Contract Rate
Class S-2(11) Weighted Average 2,400,000 February 2033
Contract Rate
Class S-2(12) Weighted Average 2,300,000 February 2033
Contract Rate
Class S-2(13) Weighted Average 2,200,000 February 2033
Contract Rate
Class S-2(14) Weighted Average 2,200,000 February 2033
Contract Rate
Class S-2(15) Weighted Average 2,100,000 February 2033
Contract Rate
Class S-2(16) Weighted Average 2,100,000 February 2033
Contract Rate
Class S-2(17) Weighted Average 2,000,000 February 2033
Contract Rate
54
Class S-2(18) Weighted Average Contract 1,900,000 February 2033
Rate
Class S-2(19) Weighted Average Contract 1,900,000 February 2033
Rate
Class S-2(20) Weighted Average Contract 1,800,000 February 2033
Rate
Class S-2(21) Weighted Average Contract 1,800,000 February 2033
Rate
Class S-2(22) Weighted Average Contract 1,800,000 February 2033
Rate
Class S-2(23) Weighted Average Contract 53,200,000 February 2033
Rate
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 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, Intermediate REMIC and 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,
Intermediate REMIC or Master REMIC,
(ii) dispose of any portion of the Subsidiary REMIC, Intermediate
REMIC or Master REMIC, other than as provided in Sections 3.06,
3.07 and 8.05,
(iii) engage in any "prohibited transaction," as defined in Sections
860F(a)(2) an d (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,
Intermediate REMIC or 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,
55
(A) adversely affect the status of the Subsidiary REMIC,
Intermediate R EMIC or 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 Certific ate 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 sta tus 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, Intermediate REMIC
or 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 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.
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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 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
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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), except that 41 Initial Contracts, with
an aggregate Cut-off Date Principal Balance of $4,126,330.79, were more than 59
days delinquent.
(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 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.
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(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.
(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 a valid and perfected and
enforceable first priority security interest in such Contract and Manufactured
Home.
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.
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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 a valid and perfected and
enforceable first priority security interest in such Land-and-Home Contract.
(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. The Originator has not
sold, assigned or pledged the Contract to any person and prior to 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 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 35 Step-up Rate Contracts included
among the Initial Contracts and 14 Step-up Rate Contracts included among the
Additional Contracts, each Contract has a fixed Contract Rate and provides for
level monthly payments which fully amortize the loan over its term. Of the Step-
up Rate Contracts which are still bearing interest at their initial Contract
Rates, 45 provide for two rate increases and the remaining 4 provide for a
single rate increase.
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(q) Enforceability. The Contract contains customary and enforceable
provisions so as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security provided thereby.
(r) One Original. There is only one original executed Contract (other than
the original executed copy retained by the Obligor), which Contract has been
delivered to the Trustee or its custodian on or before the Closing Date or the
Subsequent Transfer Date, as applicable.
(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.
(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 42 United States Code,
Section 5402(6). Each manufactured housing dealer from whom the Originator
purchased such Contract, if any, was then approved by the Originator in
accordance with the requirements of the Secretary of Housing and Urban
Development set forth in 24 CFR (S) 201.27. At the origination of each
Contract, the Originator was approved for insurance by the Secretary of Housing
and Urban Development pursuant to Section 2 of the National Housing Act.
(x) Qualified Mortgage. The Contract represents a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code. The Originator represents
and warrants that, either as of the date of origination or the Closing Date, the
fair market value of the property securing each Contract was not less than 80%
of the "adjusted issue price" (within the meaning of the
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REMIC Provisions) of such Contract. Each Manufactured Home is a "single-family
residence" which has a minimum of 400 square feet of living space and a minimum
width in excess of 102 inches and which is of a kind which is customarily used
at a fixed location, pursuant to the requirements of Section 25(e)(10) of the
Code.
(y) Credit Life. No Obligor obtained a prepaid single-premium credit life
policy in connection with the origination of the Contract.
(z) Section 32. No Contract is subject to the Home Ownership and Equity
Protection Act of 1994, Regulation Z ("Section 32"), or any similar state law or
regulation including those relating to "high cost mortgages" and "high LTV
mortgages."
SECTION 3.03 Additional Representations and Warranties. The Seller hereby
represents and warrants (a) and (b) below to the Trustee for the benefit of the
Certificateholders, as of the Closing Date with respect to each Initial and
Additional Contract and as of each Subsequent Transfer Date with respect to each
Subsequent Contract identified on the List of Contracts attached to the related
Subsequent Transfer Instrument.
(a) Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract under this Agreement or pursuant to transfers of the Certificates
unlawful or render the Contract unenforceable. The Seller has duly executed a
valid blanket assignment of the Contracts transferred to the Trust, and has
transferred all its right, title and interest in such Contracts. The blanket
assignment, any and all documents executed and delivered by the Seller pursuant
to Sections 2.01(b) and 2.03(b), and this Agreement each constitutes the legal,
valid and binding obligation of the Seller enforceable in accordance with its
respective terms.
(b) Good Title. The Seller is the sole owner of the Contract and has the
authority to sell, transfer and assign such Contract to the Trust under the
terms of this Agreement. There has been no assignment, sale or hypothecation of
the Contract by the Seller, which does not terminate upon sale of the Contract
to the Trust. The Seller has good and marketable title to the Contract, free and
clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has 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 $337,700,575.25. The aggregate principal
amounts payable by Obligors under the Initial and Additional Contracts
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(assuming all Staged-Funding Contracts included among the Additional Contracts
were fully disbursed) as of the Cut-off Date equal $499,995,990.38.
(b) Characteristics of Initial and Additional Contracts. The Initial and
Additional Contracts have the following characteristics as of the Cut-off Date:
(i) of the Initial Contracts, the Obligors on not more than 10% (by Cut-
off Date Principal Balance) are located in any one state except for
Texas; of the Initial and Additional Contracts, the Obligors on not
more than 13.45% are located in any one state, the Obligors on not
more than 0.24% are located in an area with the same zip code and
the Obligors on not more than 0.18% are located in California in an
area with the same zip code;
(ii) no Initial or Additional Contract has a remaining maturity of fewer
than 8 months or more than 360 months;
(iii) the final scheduled payment date on the Initial or Additional
Contract with the latest maturity is in July 2031;
(iv) of the Initial Contracts, approximately 69.0% (by Cut-off Date
Principal Balance) is attributable to loans to purchase new
Manufactured Homes and approximately 31.0% to used Manufactured
Homes; of the Initial and Additional Contracts, approximately 69.63%
is attributable to loans to purchase new Manufactured Homes and
approximately 30.37% to used Manufactured Homes;
(v) no less than 20.02% 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 12.746% per annum;
(vii) at least 70.05% 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
88.09%;
(ix) no Initial Contract was originated before June 18, 1984 and no
Additional Contract was originated before September 12, 2000; and
(x) not more than 34.33% 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:
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(i) the Weighted Average Contract Rate is not less than 12.65%, and not
more than 1.5% of the Cut-off Date Pool Principal Balance is
attributable to Contracts with a Contract Rate of less than 8.00%;
(ii) the weighted average (by Cut-off Date Pool Principal Balance) Loan-
to-Value Ratio of the Contracts is not more than 89%;
(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 32% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of single-Section
Manufactured Homes, and not less than 68% of the Cut-off Date Pool
Principal Balance is attributable to loans for the purchase of
double-Section Manufactured Homes;
(v) not less than 20% of the Cut-off Date Pool Principal Balance is
attributable to Land-and-Home Contracts;
(vi) not more than 36% of the Cut-off Date Pool Principal Balance is
attributable to loans secured by Manufactured Homes located in
parks;
(vii) the final scheduled payment date on the Contract with the latest
maturity is not later than July 2031;
(viii) not more than 20% 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 20.0% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of Manufactured Homes that
had been repossessed;
(x) not more than 1% of the Cut-off Date Pool Principal Balance as of
the end of the Pre-Funding Period is attributable to Initial or
Additional Contracts that were 60 or more days delinquent as of the
Closing Date; and
(xi) not more than 15.50% of the Cut-off Date Pool Principal Balance is
attributable to loans with a low side override.
(d) Staged-Funding Contracts. Approximately $9,245,799.56 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
$6,540,138.83 of such amount has been disbursed by the Closing Date, and
approximately $2,705,660.73 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.
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(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.
(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
and 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
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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 Contracts that it is obligated to repurchase
pursuant to Section 3.06(a) (such Contracts being referred to as the "Replaced
Contracts") upon satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the Contracts to be
substituted for the Replaced Contracts and the Contract Files related
to such Contracts and the Originator shall have marked the Electronic
Ledger indicating that such Contracts constitute part of the Trust;
(ii) the Contracts to be substituted for the Replaced Contracts are
Eligible Substitute Contracts and the Originator delivers an
Officers' Certificate, substantially in the form of Exhibit K-2
hereto, to the Trustee certifying that such Contracts are Eligible
Substitute Contracts;
(iii) the Originator shall have delivered to the Seller evidence of filing
of a UCC-1 financing statement executed by the Originator as debtor,
naming the Seller as secured party and the Seller shall have
delivered to the Trustee evidence of filing of a UCC-1 financing
statement executed by the Seller as debtor, naming the Trustee as
secured party and filed in Minnesota (or Delaware, if filed after
July 1, 2001), 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
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(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 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
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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 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 August 2001.
(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.
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(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 Repurchase or Substitution Under Certain Circumstances.
Notwithstanding any provision of this Agreement to the contrary, no
repurchase or substitution pursuant to Section 3.06 (other than a repurchase or
substitution pursuant to Section 3.06(c)) shall be made unless the Originator
obtains for the Trustee an Opinion of Counsel addressed to the Trustee that any
such repurchase or substitution would not, under the REMIC Provisions,
(i) cause the Subsidiary REMIC, Intermediate REMIC or Master REMIC to
fail to qualify as a REMIC while any regular interest in the
Subsidiary REMIC, Intermediate REMIC or Master REMIC, respectively,
is outstanding,
(ii) result in a tax on prohibited transactions within the meaning of
Section 860F(a)(2) of the Code or
(iii) constitute a contribution after the startup day subject to tax under
Section 860G(d) of the Code.
The Servicer shall attempt to obtain such Opinion of Counsel. In the case of a
repurchase or deposit pursuant to Section 3.06(a) or 3.06(c), the Originator
shall, notwithstanding the absence of such opinion as to the imposition of any
tax as the result of such purchase or deposit, repurchase such Contract or make
such deposit and shall guarantee the payment of such tax by paying to the
Trustee the amount of such tax not later than five Business Days before such tax
shall be due and payable to the extent that amounts previously paid over to and
then held by the Trustee pursuant to Section 6.06 hereof are insufficient to pay
such tax and all other taxes chargeable under Section 6.06. Pursuant to Section
6.06, the Servicer is hereby directed to withhold, and shall withhold and pay
over to the Trustee, an amount sufficient to pay such tax and any other taxes
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or
imposed on "contributions after start up date" under Section 860G(d) of the Code
from amounts otherwise distributable to Class C Subsidiary Certificateholders.
The Servicer shall give notice to the Trustee at the time of such repurchase of
the amounts due from the Originator pursuant to the guarantee of the Originator
described above and notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
In the event any tax that is guaranteed by the Originator pursuant to this
Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid
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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(xx). The Account shall be
entitled "U.S. Bank National Association, as Trustee for the benefit of holders
of Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 2001-2, and the Certificate Insurer."
(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 Seller 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.
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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
appoints the Custodian to maintain custody of the Contract Files and the Land-
and-Home Contract Files for the benefit of the Certificateholders and the
Trustee. In the event that the Trustee is no longer acting as Custodian of the
Contract Files or the Land-and-Home Contract Files, upon execution and delivery
of an agreement between the Trustee and the Person assuming the duties of the
Trustee hereunder as Custodian with respect to such Files, the replacement
Custodian shall concurrently execute an acknowledgment of receipt of such Files
substantially in the form of Exhibit H hereto.
(b) The Custodian shall agree to maintain the Contract Files and Land-
and-Home Contract Files at its office where they are currently maintained, or at
such other offices of the Servicer 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 Servicer 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
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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 or the Trustee.
SECTION 4.02 Filings. On or prior to the Closing Date, the Originator
shall cause the UCC-1 financing statement referred to in Section 2.02(viii) to
be filed. Trustee shall cause to be filed all necessary continuation statements
of the UCC-1 financing statement. From time to time the Servicer shall take and
cause to be taken such actions and execute such documents as are necessary to
perfect and protect the Certificateholders' interest in the Contracts and their
proceeds and the Manufactured Homes against all other persons, including,
without limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title. The
Servicer will maintain the Trustee's first priority perfected security interest
in each Manufactured Home and a first lien on each Mortgaged Property so long as
the related Contract is property of the Trust.
SECTION 4.03 Name Change or Relocation.
(a) During the term of this Agreement, the Originator shall not change its
name, identity, structure or jurisdiction of incorporation or relocate its chief
executive office without first giving notice thereof to the Seller, the Trustee,
the Servicer and the Certificate Insurer. In addition, following any such change
in the name, identity, structure or location of the chief executive office of
the Originator, the Originator shall give written notice of any such change to
Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
(b) If any change in the Originator's name, identity, structure or
jurisdiction of incorporation or the relocation of its chief executive office
would make any financing or continuation statement or notice of lien filed under
this Agreement seriously misleading within the meaning of applicable provisions
of the UCC or any title statute or would cause any such financing or
continuation statement or notice of lien to become unperfected (whether
immediately or with lapse of time), the Originator, no later than five days
after the effective date of such change, shall file, or cause to be filed, such
amendments or financing statements as may be required to preserve, perfect and
protect the Certificateholders' interest in the Contracts and proceeds thereof
and in the Manufactured Homes.
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.
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SECTION 4.05 Costs and Expenses. The Servicer agrees to pay all
reasonable costs and disbursements in connection with the perfection and the
maintenance of perfection, as against all third parties, of the
Certificateholders' right, title and interest in and to the Contracts
(including, without limitation, the security interests in the Manufactured Homes
granted thereby).
ARTICLE V
SERVICING OF CONTRACTS
SECTION 5.01 Responsibility for Contract Administration. The Servicer
will have the sole obligation to manage, administer, service and make
collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor. Conseco Finance Corp., if it is the Servicer, may delegate some or all
of its servicing duties to a wholly owned subsidiary of Conseco Finance Corp.,
for so long as such subsidiary remains, directly or indirectly, a wholly owned
subsidiary of Conseco Finance Corp. Notwithstanding any such delegation, Conseco
Finance Corp. shall retain all of the rights and obligations of the Servicer
hereunder. The Trustee, at the request of a Servicing Officer, shall furnish the
Servicer with any powers of attorney or other documents necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder. Conseco Finance Corp. is hereby appointed the Servicer until such
time as any Service Transfer shall be effected under Article VII.
SECTION 5.02 Standard of Care. In managing, administering, servicing and
making collections on the Contracts pursuant to this Agreement, the Servicer
will exercise that degree of skill and care consistent with the highest degree
of skill and care that the Servicer exercises with respect to similar contracts
serviced by the Servicer; provided, however, that
(i) such degree of skill and care shall be at least as favorable as the
degree of skill and care generally applied by servicers of
manufactured housing installment sales contracts for institutional
investors and
(ii) notwithstanding the foregoing, the Servicer shall not release or waive
the right to collect the unpaid balance on any Contract.
The Servicer shall comply with FHA/VA Regulations in servicing any FHA/VA
Contracts (and will pay any required premiums) so that the related insurance of
the Federal Housing Administration or partial guarantee of the Veterans
Administration remains in full force and effect, except for good faith disputes
relating to FHA/VA Regulations that will not cause the termination or reduction
of such insurance or guarantee.
SECTION 5.03 Records. The Servicer shall, during the period it is
servicer hereunder, maintain such books of account and other records as will
enable the Trustee to determine the status of each Contract.
SECTION 5.04 Inspection; Computer Tape.
(a) At all times during the term hereof, the Servicer shall afford the
Trustee, the Certificate Insurer and their authorized agents reasonable access
during normal business hours to
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the Servicer's records, which have not previously been provided to the Trust,
relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Trustee, the Certificate Insurer or their
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 or the Certificate Insurer may make, the
Trustee or the Certificate Insurer may, using generally accepted audit
procedures, verify the status of each Contract and review the Electronic Ledger
and records relating thereto for conformity to Monthly Reports prepared pursuant
to Article VI and compliance with the standards represented to exist as to each
Contract in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep available
a copy of the List of Contracts at its principal executive office for inspection
by Certificateholders.
(c) On or before the ninth Business Day of each related Due Period, the
Servicer will provide to the Trustee a Computer Tape setting forth a list of all
the outstanding Contracts and the outstanding principal balance of each such
Contract as of the end of the next related Due Period.
SECTION 5.05 Certificate Account.
(a) On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which must be an Eligible Account.
The Certificate Account shall be entitled "U.S. Bank National Association as
Trustee for the benefit of holders of Manufactured Housing Contract Pass-Through
Certificates, Series 2001-2 and the Certificate Insurer (Conseco Finance Corp.,
Servicer)." The Servicer shall pay into the Certificate Account as promptly as
practicable (not later than the next Business Day) following receipt thereof all
payments from Obligors and Net Liquidation Proceeds, other than late payment
penalty fees, extension fees and assumption fees, which shall be retained by the
Servicer as additional compensation for servicing the Contracts. All amounts
paid into the Certificate Account under this Agreement shall be held in trust
for the Trustee, the Certificate Insurer and the Certificateholders until
payment of any such amounts is authorized under this Agreement. Only the Trustee
may withdraw funds from the Certificate Account.
(b) If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as such,
invest the amounts in the Certificate Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Remittance
Date. Once such funds are invested, such institution shall not change the
investment of such funds. All income and gain from such investments shall be
added to the Certificate Account and distributed on such Remittance Date
pursuant to Section 8.03(a). An amount equal to any net loss on such investments
shall be deposited in the Certificate Account by the Class C Subsidiary
Certificateholder out of its own funds immediately as realized. The Servicer and
the Trustee shall in no way be liable for losses on amounts invested in
accordance with the provisions hereof. Funds in the Certificate Account not so
invested must be insured to the extent permitted by law by the Federal Deposit
Insurance Corporation.
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The Trustee may trade with itself or an Affiliate in the purchase or sale
of such Eligible Investments.
The Originator, the Servicer and the Seller acknowledge that to the extent
regulations of the Comptroller of the Currency or other applicable regulatory
agency grant the Originator, Seller or Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Originator, the Seller
and the Servicer specifically waive receipt of such confirmations.
(c) If at any time the Trustee receives notice (from Standard & Poor's,
▇▇▇▇▇'▇, Fitch or the Servicer or otherwise) that the Certificate Account has
ceased to be an Eligible Account, the Trustee must, as soon as practicable but
in no event later than 5 Business Days of the Trustee's receipt of such notice,
transfer the Certificate Account and all funds and Eligible Investments therein
to an Eligible Account. Following any such transfer, the Trustee must notify
each of the Rating Agencies and the Servicer of the location of the Certificate
Account.
SECTION 5.06 Enforcement.
(a) The Servicer shall, consistent with customary servicing procedures and
the terms of this Agreement, act with respect to the Contracts in such manner as
will maximize the receipt of principal and interest on such Contracts and
Liquidation Proceeds with respect to Liquidated Contracts.
The Servicer shall exercise its discretion, consistent with customary
servicing procedures and the terms of this Agreement, with respect to the
enforcement of defaulted Contracts in such manner as will maximize the receipt
of principal and interest with respect thereto, including but not limited to the
sale of such Contract to a third party, the modification of such Contract, or
foreclosure upon the related Collateral Security and disposition thereof.
(b) The Servicer may sue to enforce or collect upon Contracts, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to commence
a legal proceeding to enforce a Contract, the act of commencement shall be
deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Trustee on behalf of the Trust shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Contract,
including bringing suit in its name or the names of the Certificateholders.
(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Trustee's behalf to reassign the Contract or to resell the
related Manufactured Home to the person against whom recourse exists at the
price set forth in the document creating the recourse.
(d) So long as Conseco Finance Corp. is the Servicer, the Servicer may
grant to the Obligor on any Contract any rebate, refund or adjustment out of the
Certificate Account that the
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Servicer in good faith believes is required because of prepayment in full of the
Contract. The Servicer will not permit any rescission or cancellation of any
Contract.
(e) So long as Conseco Finance Corp. is the Servicer, the Servicer may,
consistent with its customary servicing procedures and consistent with Section
5.02, grant to the Obligor on any Contract an extension of payments due under
such Contract, provided that Obligors may not be solicited for extensions, no
such extension may extend beyond the final scheduled payment date of the
Contract with the latest maturity, as specified in Section 3.04(c), and no more
than one extension of payments under a Contract may be granted in any twelve-
month period.
(f) The Servicer may enforce any due-on-sale clause in a Contract if such
enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Contract is permitted by the Servicer
upon conveyance of the related Manufactured Home, the Servicer shall use its
best efforts to obtain an assumption agreement in connection therewith and add
such assumption agreement to the related Contract File or Land-and-Home Contract
File.
(g) Any provision of this Agreement to the contrary notwithstanding, the
Servicer shall not agree to the modification or waiver of any provision of a
Contract if such modification or waiver would be treated as a taxable exchange
under the REMIC Provisions.
(h) In the event that any Contract that was 60 or more days delinquent as
of the Closing Date (each, a "Delinquent Contract") goes into foreclosure, if
acquiring title to the related Mortgaged Property or Manufactured Home would
cause the adjusted basis, for federal income tax purposes, of Delinquent
Contracts that are currently in foreclosure or repossession, along with any
other assets owned by the Subsidiary REMIC other than "qualified mortgages",
qualified "foreclosure property" and "permitted investments" within the meaning
of Section 860G of the Code, to exceed 0.75% of the Pool Scheduled Principal
Balance, the Servicer shall not acquire title to that Mortgaged Property or
Manufactured Home on behalf of the Subsidiary REMIC. Instead, the Servicer shall
dispose of the Mortgaged Property or Manufactured Home for cash in a foreclosure
sale. In addition, if the Servicer determines that the adjusted basis of
Delinquent Contracts that are currently in foreclosure or repossession on any
Remittance Date, along with any other assets owned by the Subsidiary REMIC,
other than "qualified mortgages", "foreclosure property" and "permitted
investments" with the meaning of Section 860G of the Internal Revenue Code,
exceeds 1.0% of the Pool Scheduled Principal Balance after giving effect to
prepayments on the Contracts, then prior to such Remittance Date, the Servicer
shall dispose of sufficient Mortgaged Properties and Manufactured Homes securing
Delinquent Contracts and acquired upon foreclosure repossession, for cash, so
that the adjusted basis of Delinquent Contracts that are currently in
foreclosure or repossession, along with any other assets owned by the Subsidiary
REMIC, other than "qualified mortgages", "foreclosure property" and "permitted
investments" within the meaning of Section 860G of the Code, will be less than
1.0% of the Pool Scheduled Principal Balance. In either event, the Servicer may
acquire, for its own account and not on behalf of the Subsidiary REMIC, the
Mortgaged Property or Manufactured Home at the foreclosure sale for an amount
not less than the greater of: (i) the highest amount bid by any 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.
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SECTION 5.07 Trustee to Cooperate.
(a) Upon payment in full on any Contract, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the Servicer)
on the next succeeding Remittance Date by certification of a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received in connection with such payments which are required to be deposited in
the Certificate Account pursuant to Section 5.05 have been so deposited). The
Servicer is authorized to execute an instrument in satisfaction of such Contract
and to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the lien on the
related real estate. The Servicer shall determine when a Contract has been paid
in full; to the extent that insufficient payments are received on a Contract
credited by the Servicer as prepaid or paid in full and satisfied, the shortfall
shall be paid by the Servicer out of its own funds.
(b) From time to time as appropriate for servicing and foreclosure in
connection with any Land-and-Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt signed
by such Servicing Officer, cause the original Land-and-Home Contract and the
related Land-and-Home Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such Land-and-
Home Contract to be released to the Servicer with a notation that the Land-and-
Home Contract has been assigned to the Trustee. Upon request of a Servicing
Officer, the Trustee shall perform such other acts as reasonably requested by
the Servicer and otherwise cooperate with the Servicer in enforcement of the
Certificateholders' and Class C Certificateholders' rights and remedies with
respect to Contracts.
(c) The Servicer's receipt of a Land-and-Home Contract and/or Land-and-
Home Contract File shall obligate the Servicer to return the original Land-and-
Home Contract and the related Land-and-Home Contract File to the Trustee when
its need by the Servicer has ceased unless the Contract shall be liquidated or
repurchased or replaced as described in Section 3.06.
SECTION 5.08 Costs and Expenses. All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, including all fees and expenses
incurred in connection with the enforcement of Contracts (including enforcement
of defaulted Contracts and repossessions of Manufactured Homes securing such
Contracts) shall be paid by the Servicer and the Servicer shall not be entitled
to reimbursement hereunder, except that the Servicer shall be reimbursed out of
the Liquidation Proceeds of a Liquidated Contract for Liquidation Expenses
incurred by it. The Servicer shall not incur such Liquidation Expenses unless it
determines in its good faith business judgment that incurring such expenses will
increase the Net Liquidation Proceeds on the related Contract.
SECTION 5.09 Maintenance of Insurance.
(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
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issue such policies in the state in which the related Manufactured Home is
located and in an amount which is not less than the maximum insurable value of
such Manufactured Home or the principal balance due from the Obligor on the
related Contract, whichever is less; provided, however, that the amount of
coverage provided by each Hazard Insurance Policy shall be sufficient to avoid
the application of any co-insurance clause contained therein; and provided,
further, that such Hazard Insurance Policies may provide for customary
deductible amounts. With respect to: (x) a Manufactured Home securing an FHA/VA
Contract, if such Manufactured Home's location was, at the time of origination
of the related FHA/VA Contract, within a federally designated special flood
hazard area, the Servicer shall also cause such flood insurance to be
maintained, which coverage shall be at least equal to the minimum amount
specified in the preceding sentence or such lesser amount as may be available
under the federal flood insurance program; and (y) any Contract that is not an
FHA/VA Contract, the Originator shall obtain (i) a statement from the Obligor's
insurance agent that the Manufactured Home was, at the time of origination of
the Contract, not in a federally designated special flood hazard area, or (ii)
evidence that, at the time of origination, flood insurance was in effect, which
coverage was at least equal to the minimum amount specified in the preceding
sentence or such lesser amount as may be available under the federal flood
insurance program. Each Hazard Insurance Policy caused to be maintained by the
Servicer shall contain a standard loss payee clause in favor of the Servicer and
its successors and assigns. If any Obligor is in default in the payment of
premiums on its Hazard Insurance Policy or Policies, the Servicer shall pay such
premiums out of its own funds and may separately add such premium to the
Obligor's obligation as provided by the Contract, but shall not add such premium
to the remaining principal balance of the Contract.
(b) The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 5.09, and shall, to the extent that the related
Contract does not require the Obligor to maintain a Hazard Insurance Policy with
respect to the related Manufactured Home, maintain one or more blanket insurance
policies covering losses on the creditor's interest in the Contracts resulting
from the absence or insufficiency of individual Hazard Insurance Policies. Any
such blanket policy shall be substantially in the form and in the amount carried
by the Servicer as of the date of this Agreement. The Servicer shall pay the
premium for such policy on the basis described therein and shall deposit into
the Certificate Account from its own funds any deductible amount with respect to
claims under such blanket insurance policy relating to the Contracts. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to claims under individual Hazard Insurance Policies maintained pursuant
to subsection (a) of this Section. If the insurer under such blanket insurance
policy shall cease to be acceptable to the Servicer, the Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy.
(c) With respect to each Manufactured Home that has been repossessed in
connection with a defaulted Contract, the Servicer shall either (i) maintain one
or more Hazard Insurance Policies thereon or (ii) self-insure such Manufactured
Homes and deposit into the Certificate 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
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required by this Agreement and (ii) a fidelity bond. Such policy or policies and
such fidelity bond shall be in such form and amount as is generally customary
among Persons which service a portfolio of manufactured housing installment
sales contracts and installment loan agreements having an aggregate principal
amount of $100,000,000 or more and which are generally regarded as servicers
acceptable to institutional investors.
SECTION 5.10 Repossession. Notwithstanding the standard of care specified
in Section 5.02, the Servicer shall commence procedures for the repossession of
any Manufactured Home or the foreclosure upon any Mortgaged Property or take
such other steps that in the Servicer's reasonable judgment will maximize the
receipt of principal and interest or Net Liquidation Proceeds with respect to
the Contract secured by such Manufactured Home or Mortgaged Property (which may
include retitling or filing a recorded assignment of the Mortgage) subject to
the requirements of the applicable state and federal law, no later than five
Business Days after the time when such Contract becomes a Defaulted Contract;
provided that if the Servicer has actual knowledge that a Mortgaged Property is
affected by hazardous waste, then the Servicer shall not cause the Trust to
acquire title to such Mortgaged Property in a foreclosure or similar proceeding.
For purposes of the proviso in the preceding sentence, the Servicer shall not be
deemed to have actual knowledge that a Mortgaged Property is affected by
hazardous waste unless it shall have received written notice that hazardous
waste is present on such property and such written notice has been made a part
of the Land-and-Home Contract File with respect to the related Contract. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be consistent with Section 5.02. In the event that title to any Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed
or certificate of sale shall be issued to the Trustee, as Trustee, or, at its
election, to its nominee on behalf of the Trustee, as Trustee.
SECTION 5.11 Commingling of Funds. So long as Conseco Finance Corp. is
the Servicer, any collections in respect of Contracts collected by Conseco
Finance Corp. shall, prior to the deposit thereof in the Certificate Account, be
held in bank accounts entitled substantially as follows: "[name of depository],
as agent for U.S. Bank National Association as Trustee, other trustees, and
Conseco Finance Corp., as their interests may appear."
SECTION 5.12 Retitling; Security Interests.
(a) If, at any time, a Service Transfer has occurred and Conseco Finance
Corp. is no longer the Servicer and the new Servicer is unable to foreclose upon
a Manufactured Home because the title document for such Manufactured Home does
not show such Servicer or the Trustee as the holder of the first priority
security interest in the Manufactured Home, such Servicer shall take all
necessary steps to apply for a replacement title document showing it or the
Trustee as the secured party.
(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.
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(c) If the Servicer is still unable to retitle the Manufactured Home,
Conseco Finance Corp. will take all actions necessary to act with the Servicer
to foreclose upon the Manufactured Home, including, as appropriate, the filing
of any UCC-1 or UCC-2 financing statements necessary to perfect the security
interest in any Manufactured Home that constitutes a fixture under the laws of
the jurisdiction in which it is located and all actions necessary to perfect the
security interest in any Manufactured Home that is considered or classified as
part of the real estate on which it is located under the laws of the
jurisdiction in which it is located.
(d) The Originator shall
(i) deliver to the Trustee an Opinion of Counsel to the effect that
assignment and recordation of the Mortgages, securing Land-and-Home
Contracts relating to real estate located in any state other than
those states specified in such Opinion of Counsel (the "recordation
states"), is not necessary to effect the assignment to the Trustee of
the Originator's lien on the real property securing such Land-and-Home
Contracts, and
(ii) file in the appropriate recording offices within 60 days after the
Closing Date (or within 30 days after receipt of the recorded
Mortgage, if later) the assignments to the Trustee on behalf of the
Trust of the Mortgages securing all Land-and-Home Contracts secured by
Mortgages relating to real estate located in the recordation states.
SECTION 5.13 Covenants, Representations and Warranties of Servicer. By
its execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Trust relies in accepting
the Contracts and issuing the Certificates.
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Servicer is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Servicer, or its
ability to carry out its obligations hereunder.
(b) Authorization; Binding Obligations. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or 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
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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 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The Servicer is a Delaware corporation.
(g) No Default. The Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default would materially and adversely
affect its condition (financial or other) or operations or its properties or the
consequences of which would materially and adversely affect its performance
hereunder. The Servicer is not in default under any agreement involving
financial obligations or on any outstanding obligation which would materially
adversely impact its financial condition or operations or legal documents
associated with the transaction contemplated by this Agreement.
(h) No Impairment. The Servicer shall do nothing to impair the rights of
the Trust, or the Certificateholders in the Certificates.
(i) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Contract, except in accordance with Section 5.06.
ARTICLE VI
REPORTS AND TAX MATTERS
SECTION 6.01 Monthly Reports.
(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 Certificate Insurer and the Rating Agencies a "Monthly
Report," substantially in the form of Exhibit M hereto.
(b) If the applicable Monthly Report indicates that there is a Class M-1
Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a
Class B-1 Interest
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Deficiency Amount, the Servicer shall promptly notify the Trustee, by telephone,
of the aggregate amount of such Class M-1 Interest Deficiency Amount, Class M-2
Interest Deficiency Amount and Class B-1 Interest Deficiency Amount. On the day
one Business Day prior to the related Remittance Date, the Trustee shall
determine the total amount of funds in the Certificate Account available to pay
such deficiency in accordance with Section 8.03(d) and shall promptly notify the
Servicer of such amount. If the total amount of funds in the Certificate Account
is not sufficient to pay the deficiency, the Trustee shall promptly notify the
Servicer, and shall reflect such deficiency in the reports delivered to
Certificateholders pursuant to Section 6.05.
SECTION 6.02 Certificate of Servicing Officer. Each Monthly Report
pursuant to Section 6.01 shall be accompanied by a certificate of a Servicing
Officer substantially in the form of Exhibit I, certifying the accuracy of the
Monthly Report and that no Event of Termination or event that with notice or
lapse of time or both would become an Event of Termination has occurred, or if
such event has occurred and is continuing, specifying the event and its status.
SECTION 6.03 Other Data. In addition, the Originator and (if different
from the Originator) the Servicer shall, on request of the Trustee, Standard &
Poor's, ▇▇▇▇▇'▇, Fitch or a Certificateholder, furnish the Trustee and/or
Standard & Poor's, ▇▇▇▇▇'▇, Fitch or a Certificateholder such underlying data as
may be reasonably requested.
SECTION 6.04 Annual Report of Accountants. On or before May 1 of each
year, commencing May 1, 2002, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to issue to the Servicer a report that such firm
has examined selected documents, records and management's assertions relating to
loans serviced by the Servicer and stating that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers, or any successor
uniform program, except for such significant exceptions or errors in records
that, in the opinion of such firm, generally accepted attestation standards
requires it to report.
SECTION 6.05 Statements to Certificateholders.
(a) The Servicer shall prepare and furnish to the Trustee and the
Certificate Insurer 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 or Class A-IO Certificate and (if the Originator is not the
Servicer) the Originator a statement setting forth the following:
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(i) the amount of such distribution to Holders of the Class A
Certificates and Class A-IO Certificates allocable to interest,
separately identifying any Unpaid Class A Interest Shortfall and
Unpaid Class A-IO Interest Shortfall included in such
distribution and any remaining Unpaid Class A Interest Shortfall
and Unpaid Class A-IO Interest Shortfall after giving effect to
such distribution;
(ii) the amount of such distribution to Holders of Class A
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein,
and any remaining Unpaid Class A Principal Shortfall after giving
effect to such distribution;
(iii) the Class A Principal Balance and the Class A-IO Notional
Principal Amount, after giving effect to the distribution of
principal on such Remittance Date;
(iv) the Class A Percentage for such Remittance Date and the following
Remittance Date;
(v) the Pool Scheduled Principal Balance of the Contracts for such
Remittance Date;
(vi) the Pool Factor;
(vii) the number and aggregate principal balances of Contracts
delinquent (a) 30-59 days and (b) 60 or more days;
(viii) the number of Manufactured Homes that were repossessed during the
month ending immediately prior to such Remittance Date, the
number of repossessed Manufactured Homes that remain in inventory
as of the last day of the related Due Period and repossessed
Manufactured Homes purchased by the Originator or a subsidiary of
the Originator from the Trust (during the related Due Period and
cumulatively) by number of Contracts, aggregate Scheduled
Principal Balance of such Contracts and aggregate purchase price;
(ix) number of Contracts and aggregate Scheduled Principal Balance of
Contracts extended or otherwise amended during the Due Period
preceding current Remittance Date.
(x) the Class M-1 Distribution Test (as set forth in Exhibit M
hereto);
(xi) the Class M-2 Distribution Test (as set forth in Exhibit M
hereto);
(xii) the Class B Distribution Test (as set forth in Exhibit M hereto);
(xiii) the Weighted Average Contract Rate and Adjusted Weighted Average
Contract Rate;
(xiv) the Class M-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xv) the Class M-2 Interest Deficiency Amount, if any, for such
Remittance Date;
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(xvi) the Class B-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvii) the Overcollateralization Amount, if any, for such Remittance
Date, the Requisite Reserve Fund Amount, if any, and the amount
of cash, if any, on deposit in the Reserve Fund; and
(xviii) the Additional Principal Distribution Amount, if any, to be
distributed on such Remittance Date pursuant to Section
8.03(a)(xiv).
In the case of information furnished pursuant to clauses (i) through (iii)
above, the amounts shall be expressed as a dollar amount per Class A Certificate
or Class A-IO Certificate with a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class A Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Certificates during such calendar year. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in force.
(c) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates on such
Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class M-1 Certificateholders as part of the Monthly
Report, the following information:
(i) the amount of such distribution to Holders of Class M-1
Certificates allocable to interest, separately identifying any
Unpaid Class M-1 Interest Shortfall included in such
distribution, any remaining Unpaid Class M-1 Interest Shortfall
after giving effect to such distribution, any Class M-1
Liquidation Loss Interest Amount included in such distribution
and any remaining unpaid Class M-1 Liquidation Loss Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class M-1
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein
and any remaining Unpaid Class M-1 Principal Shortfall after
giving effect to such distribution;
(iii) the Class M-1 Principal Balance and the Class M-1 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class M-1 Percentage for such Remittance Date and the
following Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
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In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class M-1 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class M-1 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
(d) On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates and Class M-1
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class M-2 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class M-2
Certificates allocable to interest, separately identifying any
Unpaid Class M-2 Interest Shortfall included in such
distribution, any remaining Unpaid Class M-2 Interest Shortfall
after giving effect to such distribution, any Class M-2
Liquidation Loss Interest Amount included in such distribution
and any remaining unpaid Class M-2 Liquidation Loss Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class M-2
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein
and any remaining Unpaid Class M-2 Principal Shortfall after
giving effect to such distribution;
(iii) the Class M-2 Principal Balance and the Class M-2 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class M-2 Percentage for such Remittance Date and the
following Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class M-2 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class M-2 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable
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information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time enforced.
(e) On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1 and Class M-2
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class B-1 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-1
Certificates allocable to interest, separately identifying any
Unpaid Class B-1 Interest Shortfall included in such
distribution, any remaining Unpaid Class B-1 Interest Shortfall
after giving effect to such distribution, any Class B-1
Liquidation Loss Interest Amount included in such distribution
and any remaining Unpaid Class B-1 Liquidation Loss Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class B-1
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein,
and any remaining Unpaid Class B-1 Principal Shortfall after
giving effect to such distribution;
(iii) the Class B-1 Principal Balance and the Class B-1 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class B Percentage for such Remittance Date and the
following Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-1 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class B-1 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
(f) On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2 and
Class B-1 Certificates on such Remittance Date. The Servicer shall also furnish
to the Trustee, which shall forward such report to the Class B-2
Certificateholders as part of the Monthly Report, the following information:
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(i) the amount of such distribution to Holders of Class B-2
Certificates allocable to interest, separately identifying any
Unpaid Class B-2 Interest Shortfall included in such
distribution and any remaining Unpaid Class B-2 Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class B-2
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein,
and any Unpaid Class B-2 Principal Shortfall after giving
effect to such distribution;
(iii) the amount, if any, by which the Class B-2 Formula Distribution
Amount for such Remittance Date exceeds the Remaining Amount
Available for such Remittance Date;
(iv) the Class B-2 Principal Balance and Class B-2 Adjusted
Principal Balance, if different, after giving effect to the
distribution of principal on such Remittance Date;
(v) the Class B Percentage for such Remittance Date and the
following Remittance Date;
(vi) the information described above in Section 6.05(b)(v) through
(xviii);
(vii) the Class B-2 Liquidation Loss Amount, if any, for such
Remittance Date;
(viii) the Weighted Average Contract Rate of all outstanding
Contracts.
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-2 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class B-2 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
(g) On each Remittance Date, the Trustee shall forward or cause
to be forwarded by mail to each Holder of a Class B-3I Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such Remittance Date. The Servicer shall also
furnish to the Trustee, which shall forward such report to the Class B-3I
Certificateholders as part of the Monthly Report, the following information:
(i) the Class B-3I Formula Distribution Amount for such Remittance
Date; and
(ii) the Class B-3I Distribution Amount for such Remittance Date.
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(h) Copies of all reports provided to the Trustee for the
Certificateholders shall also be provided to Standard & Poor's, Moody's and
Fitch, to the Certificate Insurer and to the Class C Certificateholders. In
addition, Certificate Owners may receive copies of any reports provided to the
Trustee for the Certificateholders, upon written request together with a
certification that they are Certificate Owners and payment of reproduction and
postage expenses associated with the distribution of such reports, from the
Trustee at the Corporate Trust Office.
SECTION 6.06 Payment of Taxes. The Servicer shall be responsible for and
agrees to prepare, make and file all federal, state, local or other tax returns,
information statements and other returns and documents of every kind and nature
whatsoever required to be made or filed by or on behalf of the Subsidiary REMIC,
Intermediate REMIC or Master REMIC pursuant to the Code and other applicable tax
laws and regulations. Each such return, statement and document shall, to the
extent required by the Code or other applicable law and at the request of the
Servicer, be signed on behalf of the Subsidiary REMIC, Intermediate REMIC or
Master REMIC by the Trustee. The Trustee shall have no responsibility whatsoever
for the accuracy or completeness of any such return, statement or document. The
Servicer agrees to indemnify the Trustee and hold it harmless for, from, against
and in respect to any and all liability, loss, damage and expense which may be
incurred by the Trustee based upon or as a result of the Trustee's execution of
any and all such tax returns, statements and documents. The Servicer, if and for
so long as it is a Class C Certificateholder, shall be designated the "tax
matters person" on behalf of the Subsidiary REMIC, Intermediate REMIC and Master
REMIC, respectively, in the same manner as a partnership may designate a "tax
matters partner," as such term is defined in Section 6231(a)(7) of the Code. To
the extent permitted by the REMIC Provisions, any subsequent holder of a Class C
Certificate, by acceptance thereof, irrevocably designates and appoints the
Servicer as its agent to perform the responsibilities of the "tax matters
person" on behalf of the Subsidiary REMIC, Intermediate REMIC and Master REMIC,
respectively, if, and during such time as, the Servicer is not the holder of a
Class C Certificate. The Servicer may, at its expense, retain such outside
assistance as it deems necessary in the performance of its obligations under
this paragraph.
Each of the Holders of the Certificates, by acceptance thereof, agrees to
file tax returns consistent with and in accordance with any elections, decisions
or other reports made or filed with regard to federal, state or local taxes on
behalf of the Subsidiary REMIC, Intermediate REMIC or Master REMIC. The
Originator, as agent for the tax matters person, shall represent the Subsidiary
REMIC 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
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upon the Subsidiary REMIC, Intermediate REMIC or Master REMIC as a REMIC or
otherwise and shall, to the extent provided in Section 10.06, be entitled to be
reimbursed out of the Certificate Account or, if such tax or charge results from
a failure by the Trustee, the Originator or any Servicer to comply with the
provisions of Section 2.04 or 3.07, the Trustee, the Originator or such
Servicer, as the case may be, shall indemnify the Class C Certificateholders for
the payment of any such tax or charge. The Trustee shall be entitled to withhold
from amounts otherwise distributable to the Class C Certificateholders any taxes
or charges payable by the Class C Certificateholders hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Seller shall provide to the Internal
Revenue Service and the persons specified in Sections 860E(e)(3) and (6) of the
Code all information necessary for the application of Section 860E(e) and any
other applicable provision of the Code with respect to the transfer of such
Class C Certificate to such a disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Seller shall, upon the written request of persons
designated in Section 860E(e)(3) of the Code, furnish to such requesting party
and the Internal Revenue Service information sufficient to compute the present
value of anticipated excess inclusions within 60 days of the receipt of such
written request.
Article VII
SERVICE TRANSFER
SECTION 7.01 Event of Termination.
"Event of Termination" means the occurrence of any of the following:
(i) any failure by the Servicer to make any deposit into an account
required to be made hereunder and the continuance of such failure
for a period of five Business Days after the Servicer has become
aware, or should have become aware, that such deposit was required;
(ii) failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement in this Agreement (other
than a covenant or agreement which is elsewhere in this Section
specifically dealt with) which continues unremedied for 30 days
after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by
the 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;
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(iv) if (x) the Servicer's long-term debt rating from Standard & Poor's
is not then "BBB-" or higher, or (y) the Servicer's long-term debt
rating from ▇▇▇▇▇'▇ is not then "Baa3" or higher, or (z) the
Servicer's long-term debt rating from Fitch is not then "BBB-" or
higher, and
(A) if such Remittance Date occurs between August 1, 2001 and
July 31, 2002, the Cumulative Realized Losses as of such
Remittance Date are greater than 2.50% of the Cut-off Date
Pool Principal Balance;
(B) if such Remittance Date occurs between August 1, 2002 and
July 31, 2003, the Cumulative Realized Losses as of such
Remittance Date are greater than 5.50% of the Cut-off Date
Pool Principal Balance;
(C) if such Remittance Date occurs between August 1, 2003 and
July 31, 2004, the Cumulative Realized Losses as of such
Remittance Date are greater than 7.50% of the Cut-off Date
Pool Principal Balance;
(D) if such Remittance Date occurs between August 1, 2004 and
July 31, 2005, the Cumulative Realized Losses as of such
Remittance Date are greater than 10.50% of the Cut-off Date
Pool Principal Balance;
(E) if such Remittance Date occurs between August 1, 2005 and
July 31, 2006, the Cumulative Realized Losses as of such
Remittance Date are greater than 12.60% of the Cut-off Date
Pool Principal Balance;
(F) if such Remittance Date occurs between August 1, 2006 and
July 31, 2007, the Cumulative Realized Losses as of such
Remittance Date are greater than 13.50% of the Cut-off Date
Pool Principal Balance;
(G) if such Remittance Date occurs between August 1, 2007 and
July 31, 2008, the Cumulative Realized Losses as of such
Remittance Date are greater than 14.25% of the Cut-off Date
Pool Principal Balance;
(v) if (x) the Servicer's long-term debt rating from each of Standard &
Poor's and Fitch is then "BBB-" or higher, and (y) the Servicer's
long-term debt rating from ▇▇▇▇▇'▇ is then "Baa3" or higher, and
(A) if such Remittance Date occurs between August 1, 2001 and
July 31, 2002, the Cumulative Realized Losses as of such
Remittance Date are greater than 3.25% of the Cut-off Date
Pool Principal Balance;
(B) if such Remittance Date occurs between August 1, 2002 and
July 31, 2003, the Cumulative Realized Losses as of such
Remittance Date are greater than 6.90% of the Cut-off Date
Pool Principal Balance;
(C) if such Remittance Date occurs between August 1, 2003 and
July 31, 2004, the Cumulative Realized Losses as of such
Remittance Date are greater than 9.60% of the Cut-off Date
Pool Principal Balance;
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(D) if such Remittance Date occurs between August 1, 2004 and
July 31, 2005, the Cumulative Realized Losses as of such
Remittance Date are greater than 13.65% of the Cut-off Date
Pool Principal Balance;
(E) if such Remittance Date occurs between August 1, 2005 and
July 31, 2006, the Cumulative Realized Losses as of such
Remittance Date are greater than 16.40% of the Cut-off Date
Pool Principal Balance;
(F) if such Remittance Date occurs between August 1, 2006 and
July 31, 2007, the Cumulative Realized Losses as of such
Remittance Date are greater than 17.50% of the Cut-off Date
Pool Principal Balance;
(G) if such Remittance Date occurs between August 1, 2007 and
July 31, 2008, the Cumulative Realized Losses as of such
Remittance Date are greater than 18.45% of the Cut-off Date
Pool Principal Balance;
(vi) a court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect
of the Servicer in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Servicer, as the
case may be, or for any substantial liquidation of its affairs, and
such order remains undischarged and unstayed for at least 60 days;
(vii) the Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have consented to the entry of an
order for relief in an involuntary case under any such law, or
shall have consented to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian or
sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general
assignment for the benefit of its creditors, or shall have failed
to, or admitted in writing its inability to, pay its debts as they
become due, or shall have taken any corporate action in furtherance
of the foregoing; or
(viii) the failure of the Servicer to be an Eligible Servicer.
SECTION 7.02 Transfer. If an Event of Termination has occurred and is
continuing, either the Trustee or Certificateholders with aggregate Percentage
Interests representing 25% or more of the Trust, by notice in writing to the
Servicer (and to the Trustee if given by the Certificateholders) may with the
prior written consent of the Certificate Insurer (or, with respect to an Event
of Termination pursuant to Sections 7.01(iv) or (v) at the direction of the
Certificate Insurer, shall) terminate all (but not less than all) of the
Servicer's management, administrative, servicing and collection functions (such
termination being herein called a "Service Transfer"). On receipt of such notice
(or, if later, on a date designated therein), or upon resignation of the
Servicer in accordance with Section 12.01, all authority and power of the
Servicer under this Agreement, whether with respect to the Contracts, the
Contract Files, the Land-and-Home Contract Files or otherwise (except with
respect to the Certificate Account, the transfer of which
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shall be governed by Section 7.06), shall pass to and be vested in the Trustee
pursuant to and under this Section 7.02; and, without limitation, the Trustee is
authorized and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments
(including, without limitation, documents required to make the Trustee or a
successor servicer the sole lienholder or legal title holder of record of each
Manufactured Home) and to do any and all acts or things necessary or appropriate
to effect the purposes of such notice of termination. Each of the Originator and
the Servicer agrees to cooperate with the Trustee in effecting the termination
of the responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to the Trustee for administration by it of all cash
amounts which shall at the time be held by the Servicer for deposit, or have
been deposited by the Servicer, in the Certificate Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts and the execution of any documents required to make the
Trustee or a successor servicer the sole lienholder or legal title holder of
record in respect of each Manufactured Home. The Servicer shall be entitled to
receive any other amounts which are payable to the Servicer under the Agreement,
at the time of the termination of its activities as Servicer. The Servicer shall
transfer to the new servicer
(i) the Servicer's records relating to the Contracts in such electronic
form as the new servicer may reasonably request and
(ii) any Contracts, Contract Files and Land-and-Home Contract Files in
the Servicer's possession.
SECTION 7.03 Trustee to Act; Appointment of Successor. On and after the
time the Servicer receives a notice of termination pursuant to Section 7.02 or
the resignation of the Servicer in accordance with Section 12.01, the Trustee
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
the Servicer shall be relieved of such responsibilities, duties and liabilities
arising after such Service Transfer; provided, however, that (i) the Trustee
will not assume any obligations of the Originator pursuant to Section 3.06 and
(ii) the Trustee shall not be liable for any acts or omissions of the Servicer
occurring prior to such Service Transfer or for any breach by the Servicer of
any of its obligations contained herein or in any related document or agreement.
As compensation therefor, the Trustee shall be entitled to receive reasonable
compensation out of the Monthly Servicing Fee and the Additional Monthly
Servicing Fee. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, an Eligible Servicer
acceptable to the Certificate Insurer as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Pending appointment of a successor to the
Servicer hereunder, unless the Trustee is prohibited by law from so acting, the
Trustee shall act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Contracts as it and such
successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Certificateholders and the
Certificate Insurer, exceed the Monthly Servicing Fee and the
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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 Certificate
Insurer, the Rating Agencies and the Certificateholders at their respective
addresses appearing on the Certificate Register.
(b) Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to the Rating Agencies and the Certificateholders at
their respective addresses appearing on the Certificate Register.
(c) The Trustee shall give written notice to the Rating Agencies at least
30 days prior to the date upon which any Eligible Servicer (other than the
Trustee) is to assume the responsibilities of Servicer pursuant to Section 7.03,
naming such successor Servicer.
SECTION 7.05 Effect of Transfer.
After the Service Transfer, the Trustee or new Servicer may notify Obligors
to make payments directly to the new Servicer that are due under the Contracts
after the effective date of the Service Transfer.
(a) After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer will transmit or cause to be
transmitted directly to the new Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts.
(b) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Originator pursuant to Article X and Sections 3.06, 11.06 and 11.11(f))
other than those relating to the management, administration, servicing or
collection of the Contracts.
SECTION 7.06 Transfer of Certificate Account. Notwithstanding the
provisions of Section 7.02, if the Certificate Account shall be maintained with
the Servicer and an Event of Termination shall occur and be continuing, the
Servicer shall, after five days' written notice from the Trustee, or in any
event within ten days after the occurrence of the Event of Termination,
establish an Eligible Account with an institution other than the Servicer and
promptly transfer all funds in the Certificate Account to such new account,
which shall thereafter be deemed the Certificate Account for the purposes
hereof.
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ARTICLE VIII
PAYMENTS
SECTION 8.01 Monthly Payments.
(a) Subject to the terms of this Article VIII, each Holder of a
Certificate as of a Record Date shall be paid on the next succeeding Remittance
Date by check mailed on such Remittance Date to such Certificateholder at the
address for such Certificateholder appearing on the Certificate Register (or, if
such Certificateholder holds a Class of Class A Certificates, Class M
Certificates, or Class B Certificates with an aggregate Percentage Interest of
at least 5% or a Class B-3I, Class C Subsidiary, Class C Intermediate or Class C
Master Certificateholder holds a Class B-3I, Class C Subsidiary, Class C
Intermediate or Class C Master Certificate with an aggregate Percentage Interest
of at least 20% and so requests, by wire transfer pursuant to instructions
delivered to the Trustee at least ten days prior to such Remittance Date), the
sum equal to such Certificateholder's Percentage Interest of all amounts
distributed on the applicable Class of Certificates. Final payment of any
Certificate shall be made only upon presentation of such Certificate at the
office or agency of the Paying Agent.
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Book Entry Certificates. Neither the Trustee, the Certificate 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 M, and Class B Certificates as set
forth in Exhibits A-1, A-2, 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:
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(i) to make payments in the amounts and in the manner provided for in
Section 8.03;
(ii) to pay to the Originator with respect to each Contract or property
acquired in respect thereof that has been repurchased or replaced
pursuant to Section 3.06, all amounts received thereon and not
required to be distributed to Certificateholders as of the date on
which the related Scheduled Principal Balance or Repurchase Price is
determined;
(iii) to reimburse the Servicer out of Liquidation Proceeds for Liquidation
Expenses incurred by it, to the extent such reimbursement is
permitted pursuant to Section 5.08;
(iv) to withdraw any amount deposited in the Certificate Account that was
not required to be deposited therein; or
(v) to make any rebates or adjustments deemed necessary by the Servicer
pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clause (ii), the
Servicer's entitlement thereto is limited to collections or other recoveries on
the related Contract, the Servicer shall keep and maintain separate accounting,
on a Contract by Contract basis, for the purpose of justifying any withdrawal
from the Certificate Account pursuant to such clause.
SECTION 8.03 Payments.
(a) On each Remittance Date the Trustee shall withdraw from the
Certificate Account the Amount Available (as determined on the immediately
preceding Determination Date), plus (x) on the Post-Funding Remittance Date any
Pre-Funded Amount, (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 (z) on the Remittance Dates in
August 2001 and September 2001 any amount withdrawn from the Capitalized
Interest Account and deposited in the Certificate Account, and apply such funds
to make payment in the following order of priority, subject to Section 8.03(e):
(i) concurrently, the Premium to the Certificate Insurer and, if neither
Conseco Finance Corp. nor a wholly owned subsidiary of Conseco
Finance Corp. is the Servicer, to pay the Monthly Servicing Fee and
any other compensation owed to the Servicer pursuant to Section 7.03,
except the Additional Monthly Servicing Fee;
(ii) 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 Certificateholders and the
amount in clause (i)(A) 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 the
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Class A and 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 the Class A and Class A-IO
Certificates based on the Unpaid Class A Interest Shortfall and
the Unpaid Class A-IO Interest Shortfall;
(iii) after payment of the amounts specified in clauses (i)-(ii) above, to
the Certificate Insurer, reimbursement of any claims paid under the
Policy and not reimbursed on a prior Remittance Date, together with
interest on such unpaid amount at the rate specified in the
Insurance Agreement;
(iv) after payment of the amounts specified in clauses (i)-(iii) above,
to the Class M-1 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class M-1 Formula
Distribution Amount;
(B) any Unpaid Class M-1 Interest Shortfall;
(v) after payment of the amounts specified in clauses (i)-(iv) above, to
the Class M-2 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class M-2 Formula
Distribution Amount;
(B) any Unpaid Class M-2 Interest Shortfall;
(vi) after payment of the amounts specified in clauses (i)-(v) above, to
the Class B-1 Certificateholders as follows:
(A) the amount in clause (i) of the definition of Class B-1 Formula
Distribution Amount;
(B) any Unpaid Class B-1 Interest Shortfall;
(vii) after payment of the amounts specified in clauses (i)-(vi) above, to
the Certificate Insurer, any other amounts owed under the Insurance
Agreement and not paid on a prior Remittance Date;
(viii) after payment of the amounts specified in clauses (i)-(vii) 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 to the Class A
Certificates (but in no event shall such amount exceed the
Class A Principal Balance);
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(B) the Unpaid Class A Principal Shortfall to the Class A
Certificateholders, but 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 Cross-
Over Date, the Class A Percentage of the Formula Principal
Distribution Amount to the Class A Certificateholders:
(ix) after payment of the amounts specified in clauses (i)-(viii) 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 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;
(x) after payment of the amounts specified in clauses (i)-(ix) 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;
(xi) after payment of the amounts specified in clauses (i)-(x) 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
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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;
(xii) after payment of the amounts specified in clauses (i)-(xi) 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);
(xiii) if Conseco Finance Corp. or a wholly owned subsidiary of the Company
is the Servicer, after payment of the amounts specified in clauses
(i)-(xii) above, to pay the Monthly Servicing Fee and any other
compensation owed to the Servicer pursuant to Section 7.02, and if
Conseco Finance Corp. or a wholly owned subsidiary of Conseco
Finance is not the Servicer, to pay the Additional Monthly Servicing
Fee to the Servicer;
(xiv) after payment of the amounts specified in clauses (i)-(xiii) above,
to the Certificateholders any Additional Principal Distribution
Amount, as follows and in no case more than the Class Principal
Balance of any Class:
(A) to the Class A Certificateholders, until the first Remittance
Date on which the Overcollateralization Amount equals
$10,000,000; and
(B) on each Additional Principal Payment Date (as defined in
Section 8.05(d)), to the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificateholders pro rata based upon the Class
Principal Balance of each Class and then, if the Class M and
Class B Certificates have been paid in full, to the Class A
Certificateholders;
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(xv) after payment of the amounts specified in clauses (i)-(xiv) above,
the Class B-3I Distribution Amount to the Class B-3I
Certificateholders;
(xvi) after payment of the amounts specified in clauses (i)-(xv) above, to
reimburse the Class C Certificateholders for expenses incurred by
and reimbursable to them pursuant to Section 10.06; and
(xvii) after payment of the amounts specified in clauses (i)-(xvi) above,
any remaining funds to the Class C Master Certificateholders.
(b) On each Remittance Date, the Uncertificated Intermediate Interests
shall receive distributions, to the extent of the Adjusted Amount Available plus
the amounts described in Section 8.03(d), in the following order of priority:
(i) to each Class of Uncertificated Intermediate Interests, pro rata
based on its respective entitlement, accrued interest as follows:
(A) for each such Class other than the Class I-AIO Interest, 1/12th
of the Adjusted Weighted Average Contract 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 at a rate per annum
equal to (A) 2.50% multiplied by the sum of the Subsidiary
Interest Adjusted Principal Balance of the (1) Class S-2(1)
Interest through and including the October 2001 Remittance
Date, (2) Class S-2(2) Interest through and including the
January 2002 Remittance Date, (3) Class S-2(3) Interest through
and including the April 2002 Remittance Date, (4) Class S-2(4)
Interest through and including the July 2002 Remittance Date,
(5) Class S-2(5) Interest through and including the October
2002 Remittance Date, (6) Class S-2(6) Interest through and
including the January 2003 Remittance Date, (7) Class S-2(7)
Interest through and including the April 2003 Remittance Date,
(8) Class S-2(8) Interest through and including the July 2003
Remittance Date, (9) Class S-2(9) Interest through and
including the October 2003 Remittance Date, (10) Class S-2(10)
Interest through and including the January 2004 Remittance
Date, (11) Class S-2(11) Interest through and including the
April 2004 Remittance Date, (12) Class S-2(12) Interest through
and including the July 2004
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Remittance Date, (13) Class S-2(13) Interest through and
including the October 2004 Remittance Date, (14) Class S-2(14)
Interest through and including the January 2005 Remittance
Date, (15) Class S-2(15) Interest through and including the
April 2005 Remittance Date, (16) Class S-2(16) Interest through
and including the July 2005 Remittance Date, (17) Class S-2(17)
Interest through and including the October 2005 Remittance
Date, (18) Class S-2(18) Interest through and including the
January 2006 Remittance Date, (19) Class S-2(19) Interest
through and including the April 2006 Remittance Date, (20)
Class S-2(20) Interest through and including the July 2006
Remittance Date, (21) Class S-2(21) Interest through and
including the October 2006 Remittance Date, (22) Class S-2(22)
Interest through and including the January 2007 Remittance Date
and (23) Class S-2(23) Interest through and including the April
2007 Remittance Date and (B) 0% after the April 2007 Remittance
Date, plus
(C) any Unpaid Intermediate Interest Shortfall with respect to such
Class;
(ii) To the Class I-Accrual Interest, principal in an amount equal to
one-half the principal distributed on the Class A, Class M and Class
B Certificates on such Remittance Date; and to each Intermediate
REMIC Accretion Directed Interest, principal (including that payable
to the Intermediate REMIC Accretion Directed Interests as described
in Section 8.03(b)(i)(A)) in an amount equal to one-half the
principal distributed to its Corresponding Certificate Class on such
Remittance Date. Realized losses shall be allocated to each Class of
Uncertificated Intermediate Interests in an amount sufficient to
reduce the Intermediate REMIC Principal Balance of (i) the Class I-
Accrual Interest to one-half the sum of (A) the Pool Scheduled
Principal Balance, (B) the Pre-Funded Amount and (C) the
Overcollateralization Amount and (b) each Class of Intermediate
REMIC Accretion Directed Interests to one-half the Class Principal
Balance of its Corresponding Certificate Class after giving effect
to distributions on such Remittance Date.
(iii) To the Class C Intermediate Certificateholder, any remaining Amount
Available.
(c) On each Remittance Date, the Uncertificated Subsidiary Interests
shall receive distributions, to the extent of the Adjusted Amount Available plus
the amount described in Section 8.03(d), in the following order of priority:
(i) Each of the Class S-1 and Class S-2 Interests shall receive
distributions of interest, pro rata based on their respective
entitlements, in an amount equal to (i) 1/12 of the Weighted Average
Contract Rate times the Subsidiary Interest Principal Balance of
such Class, plus (ii) any Unpaid Subsidiary Interest Shortfall with
respect to such Class;
(ii) 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
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and last (after each other Class S-2 Interest) to the Class S-2(23)
Interest, in an amount equal to its respective Subsidiary Interest
Principal Balance; and
(iii) 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 $123,750,000;
(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 $103,125,000;
(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 $82,500,000;
(iv) no withdrawal with respect to a Class M-1 Interest Deficiency Amount
shall be made if the aggregate withdrawals with respect to all prior
Class M-1 Interest Deficiency Amounts equal $1,802,344;
(v) no withdrawal with respect to a Class M-2 Interest Deficiency Amount
shall be made if the aggregate withdrawals with respect to all prior
Class M-2 Interest Deficiency Amounts equal $1,570,106; and
(vi) no withdrawal with respect to a Class B-1 Interest Deficiency Amount
shall be made if the aggregate withdrawals with respect to all prior
Class B - 1 Interest Deficiency Amounts equal $1,805,400.
(e) Notwithstanding the priorities set forth above, any Pre-Funded
Amount deposited in the Certificate Account shall be applied solely to pay
principal of the Class A Certificates and
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any amount withdrawn from the Capitalized Interest Account and deposited in the
Certificate Account shall be applied solely as described in Section 8.06.
(f) If the Trustee shall not have received the applicable Monthly Report
by any Remittance Date, the Trustee shall distribute all funds then in the
Certificate Account to Certificateholders in accordance with Section 8.03(a), to
the extent of such funds, on such Remittance Date.
SECTION 8.04 Reserve Fund.
(a) The Trustee on behalf of the Trust shall be the legal owner of the
Reserve Fund Contracts, but the Reserve Fund Contracts shall not constitute part
of the Subsidiary REMIC, the Intermediate REMIC or the Master REMIC. Green Tree
Finance Corp.-Two shall be the beneficial owner of the Reserve Fund Contracts.
The Servicer shall service the Reserve Fund Contracts on behalf of the Trust in
accordance with the same standards specified in this Agreement with respect to
the Contracts, and shall deliver all collections with respect thereto, including
liquidation proceeds, to the Trustee for deposit in the Reserve Fund Account.
(b) On or before the Closing Date, the Trustee shall establish the
Reserve Fund Account on behalf of the Trust, and shall hold therein all cash
proceeds of the Reserve Fund Contracts. The Reserve Fund Account shall be
entitled "U.S. Bank National Association as Trustee for the benefit of holders
of Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates
Series 2001-2 and the Certificate Insurer." The Trustee on behalf of the Trust
shall be the legal owner of the Reserve Fund Account. Green Tree Finance Corp.-
Two shall be the beneficial owner of the Reserve Fund Account, subject to the
foregoing power of the Trustee to transfer amounts in the Reserve Fund Account
to the Certificate Account. Funds in the Reserve Fund Account shall, at the
direction of Green Tree Finance Corp.-Two, be invested in Eligible Investments
that mature no later than the Business Day prior to the next succeeding
Remittance Date. All net income and gain from such investments shall be
distributed to Green Tree Finance Corp.-Two on such Remittance Date. All amounts
earned on amounts on deposit in the Reserve Fund Account shall be taxable to
Green Tree Finance Corp.-Two. Any losses on such investments shall be deposited
in the Capitalized Interest Account by Green Tree Finance Corp.-Two out of its
own funds immediately as realized.
(c) If the Monthly Report for any Remittance Date indicates that the
Amount Available, together with any amounts to be deposited in the Certificate
Account with respect to such Remittance Date from the Pre-Funding Account or the
Capitalized Interest Account, but not including any amounts to be received
pursuant to a claim on the Policy, after payment of the amount specified in
clause (i) of Section 8.03(a) is not sufficient to pay the Class A Interest
Distribution Amount, plus the Class M-1 Interest Distribution Amount, plus the
Class M-2 Interest Distribution Amount, plus the Class B-1 Interest Distribution
Amount, or there would otherwise be a Class A Principal Deficiency Amount, Class
M-1 Liquidation Loss Amount, Class M-2 Liquidation Loss Amount, Class B-1
Liquidation Loss Amount or a Class B-2 Liquidation Loss Amount, the Trustee
shall withdraw from the Reserve Fund Account an amount equal to the least of (i)
the amount of such deficiency, or (ii) the amount of funds in the Reserve Fund
Account (net of any investment earnings thereon), or (iii) the Requisite Reserve
Fund Amount, and shall deposit such funds in the Certificate Account for
distribution on such
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Remittance Date in order first to pay any deficiency in the Amount Available to
pay the Class A Interest Distribution Amount, second to pay any deficiency in
the Amount Available to pay the Class M-1 Interest Distribution Amount, third to
pay any deficiency in the Amount Available to pay the Class M-2 Interest
Distribution Amount, fourth to pay any deficiency in the Amount Available to pay
the Class B-1 Interest Distribution Amount, fifth to pay any Class A Principal
Deficiency Amount, sixth to pay any Class M-1 Liquidation Loss Amount, seventh
to pay any Class M-2 Liquidation Loss Amount, eighth to pay any Class B-1
Liquidation Loss Amount, and ninth to pay any Class B-2 Liquidation Loss Amount.
(d) On the Remittance Date on which the Requisite Reserve Fund Amount is
reduced to zero, all Reserve Fund Contracts and all funds in the Reserve Fund
Account shall be distributed to Green Tree Finance Corp.-Two. After such date no
further amounts shall be deposited in or withdrawn from the Reserve Fund
Account.
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 Cut-off Date Pool Principal Balance, (ii) such purchase
being made pursuant to a plan of complete liquidation of each of the Subsidiary
REMIC, Intermediate REMIC and Master REMIC in accordance with Section 860F
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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, 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 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 Servicer shall notify the Trustee and the Class C Subsidiary
Certificateholder no later than two Business Days after the Determination Date
relating to the first Due Period which includes the date on which the Pool
Scheduled Principal Balance first becomes less than or equal to 10% of the Cut-
off Date Pool Principal Balance, to the effect that the Pool Scheduled Principal
Balance is then less than or equal to 10% of the Cut-off Date Pool Principal
Balance.
(d) If the Class C Subsidiary Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option described
in subsection (b) by the Remittance Date occurring in the month following the
Determination Date specified in subsection (C), then on the following Remittance
Date and each Remittance Date thereafter (each, an "Additional Principal Payment
Date") the Certificates shall be entitled to receive the Additional Principal
Distribution Amount pursuant to Section 8.03(a)(xiv).
SECTION 8.06 Capitalized Interest Account.
(a) On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $0.00 received from the Seller pursuant to
Section 2.02(xxi). The Capitalized Interest Account shall be entitled "U.S. Bank
National Association as Trustee for the benefit of holders of Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates, Series 2001-2,
and the Certificate Insurer." On the Remittance Dates occurring in August 2001
and September 2001, if the Monthly Report for such Remittance Date indicates
that the Amount Available (after payment of the amount specified in clause (i)
of Section 8.03(a) and including in the Amount Available only payments in
respect of interest on the Contracts) is not sufficient to pay the Class A
Interest Distribution Amount, plus the Class M-1 Interest Distribution Amount,
plus the Class M-2 Interest Distribution Amount, plus the Class B-1 Interest
Distribution Amount, the Trustee shall withdraw the amount of such deficiency,
or the amount of funds in the Capitalized Interest Account (net of any
investment earnings thereon), if less, and shall deposit such funds in the
Certificate Account for distribution on such Remittance Date in order first to
pay any deficiency in the Amount Available to pay the Class A Interest
Distribution Amount, second to pay any deficiency in the Amount Available to pay
the Class M-1 Interest Distribution Amount,
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third to pay any deficiency in the Amount Available to pay the Class M-2
Interest Distribution Amount, and fourth to pay any deficiency in the Amount
Available to pay the Class B-1 Interest Distribution Amount.
(b) The Capitalized Interest 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 Capitalized Interest
Account. Green Tree Finance Corp.-Two shall be the beneficial owner of the
Capitalized Interest Account, subject to the foregoing power of the Trustee to
transfer amounts in the Capitalized Interest Account to the Certificate Account.
Funds in the Capitalized Interest Account shall, at the direction of Green Tree
Finance Corp.-Two, be invested in Eligible Investments that mature no later than
the Business Day prior to the next succeeding Remittance Date. All net income
and gain from such investments shall be distributed to Green Tree Finance Corp.-
Two on such Remittance Date. All amounts earned on amounts on deposit in the
Capitalized Interest Account shall be taxable to Green Tree Finance Corp.-Two.
Any losses on such investments shall be deposited in the Capitalized Interest
Account by Green Tree Finance Corp.-Two out of its own funds immediately as
realized.
(c) Any funds remaining in the Capitalized Interest Account after the
Remittance Date in February 2001 shall be distributed to Green Tree Finance
Corp.-Two on such Remittance Date. After such date no further amounts shall be
deposited in or withdrawn from the Capitalized Interest Account.
SECTION 8.07 Pre-Funding Account.
(a) On or before the Closing Date, the Trustee shall establish the Pre-
Funding Account on behalf of the Trust, which must be an Eligible Account. The
Pre-Funding Account shall be entitled "Pre-Funding Account, U.S. Bank National
Association as Trustee for the benefit of holders of Certificates, Series 2001-
2, and the Certificate Insurer." The Trustee shall maintain within the Pre-
Funding Account two subaccounts, the Pre-Funding Subaccount and the Undelivered
Contract Subaccount. The Undelivered Contract Subaccount pertains to those Land-
and-Home Contracts transferred to the Trust on the Closing Date that are
Undelivered Contracts. Funds deposited in the Pre-Funding Account shall be held
in trust by the Trustee for the Holders of the Certificates for the uses and
purposes set forth herein.
(b) The Trustee shall deposit in the Pre-Funding Subaccount the amount
received from the Seller pursuant to Section 2.02(xxii). 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.
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(c) The Trustee shall deposit in the Undelivered Contract Subaccount
the amount received from the Seller pursuant to Section 2.02(xxiii). Amounts on
deposit in the Undelivered Contract Subaccount shall be withdrawn by the Trustee
as described below.
(1) If the Seller delivers the related Land-and-Home Contract
File for an Undelivered Contract to the Trustee at least two Business
Days before the last day of the Pre-Funding Period, the Trustee shall
withdraw an amount equal to 100% of the Cut-off Date Principal Balance
of such Contract and pay such amount to or upon the order of the
Seller.
(2) [Reserved]
(3) The Seller shall give the Trustee telephonic notice of its
intended delivery of Land-and-Home Contract Files. The Trustee will use
reasonable efforts to process the Land-and-Home Contract Files and
remit any amount payable for them to the Seller in a timely manner.
(4) On the Business Day immediately preceding the Post-Funding
Remittance Date, the Trustee shall deposit into the Certificate Account
any amounts remaining in the Undelivered Contract Subaccount, net of
investment earnings.
(d) The Pre-Funding Account shall be part of the Trust but not part
of the Master REMIC, Intermediate REMIC or Subsidiary REMIC. The Trustee on
behalf of the Trust shall be the legal owner of the Pre-Funding Account. The
Seller shall be the beneficial owner of the Pre-Funding Account, subject to the
foregoing power of the Trustee to transfer amounts in the Pre-Funding Account to
the Certificate Account. Funds in the Pre-Funding Account shall, at the
direction of the Servicer, be invested in Eligible Investments of the kind
described in clauses (i) and (ii)(A) of the definition of "Eligible Investment"
and that mature no later than the Business Day prior to the next succeeding
Remittance Date. All amounts earned on deposits in the Pre-Funding Account shall
be taxable to the Seller. Any losses on such investments shall be deposited in
the Pre-Funding Account by the Seller immediately as realized. The Trustee shall
release to the Seller all investment earnings in the Pre-Funding Account on the
Post-Funding Remittance Date.
SECTION 8.08 Claims Upon Policy.
(a) If, any Monthly Report delivered to the Trustee pursuant to
Section 6.01 discloses a Deficiency Amount, the Trustee shall, promptly on the
Business Day it receives the Monthly Report, give notice to the Certificate
Insurer of the amount of the Deficiency Amount. In the event that a payment
becomes due pursuant to the terms of the Policy, the Trustee shall submit a
Notice (in the form attached to such Policy) in accordance with the terms of the
Policy.
(b) The Trustee shall establish a separate special purpose trust
account for the benefit of the Holders of the Class A Certificates and the
Certificate Insurer (the "Policy Payments Account") over which the Trustee shall
have exclusive control and sole right of withdrawal. The Trustee shall deposit
any amount paid under the Policy in the Policy Payments Account and distribute
such amount only for purposes of payment to the Holders of the Class A
Certificates of
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the Insured Payments for which a claim was made and such amount may not be
applied to satisfy any costs, expenses or liabilities of the Servicer, the
Originator, the Seller, the Trustee or the Trust. Amounts paid under the Policy
shall be transferred to the Certificate Account in accordance with the next
succeeding paragraph and disbursed by the Trustee to Holders of the Class A
Certificates in accordance with Section 8.01. It shall not be necessary for such
payments to be made by checks or wire transfers separate from the checks or wire
transfers used to pay the Insured Payments with other funds available to make
such payment. However, the amount of any payment of principal of or interest on
the Class A Certificates to be paid from funds transferred from the Policy
Payments Account shall be noted as provided in paragraph (c) below in the
Certificate Register and in the statement to be furnished to Class A
Certificateholders pursuant to Section 6.05. Funds held in the Policy Payments
Account shall not be invested by the Trustee.
On any Remittance Date with respect to which a claim has been made
under the Policy, the amount of funds received by the Trustee as a result of any
claim under the Policy, to the extent required to make Insured Payments on such
Remittance Date, shall be withdrawn from the Policy Payments Account and
deposited in the Certificate Account and applied by the Trustee, together with
the other funds to be withdrawn from the Certificate Account, directly to the
payment in full of the Insured Payments due on the Class A Certificates. Funds
received by the Trustee as a result of any claim under the Policy shall be
deposited by the Trustee in the Policy Payments Account and used solely for
payment to the Holders of the Class A Certificates and may not be applied to
satisfy any costs, expenses or liabilities of the Servicer, the Originator, the
Seller, the Trustee or the Trust. Any funds remaining in the Policy Payments
Account on the first Business Day following a Remittance Date shall be remitted
to the Certificate Insurer, pursuant to the instructions of the Certificate
Insurer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A Certificate from
moneys received under the Policy. The Certificate Insurer shall have the right
to inspect such records at reasonable times during normal business hours upon
one Business Day's prior notice to the Trustee.
(d) The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action, of which an authorized officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any distribution made with respect to the Class A
Certificates. Each Holder of a Class A Certificate by its purchase of such
Certificate, the Servicer and the Trustee hereby agree that, the Certificate
Insurer (so long as no Certificate Insurer Default exists) may at any time
during the continuation of any proceeding relating to a Preference Claim direct
all matters relating to such Preference Claim, including without limitation, (i)
the direction of any appeal of any order relating to such Preference Claim and
(ii) the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Certificate
Insurer shall be subrogated to the rights of the Servicer, the Trustee, the
Trust and each Holder of a Class A Certificate in the conduct of any such
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
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(e) The Trustee shall, at the time it provides notice to the
Certificate Insurer, notify, by mail to the Class A Certificateholders that, in
the event the any such Certificateholder's scheduled payment is avoided as a
preferential transfer, such Certificateholder will be entitled to payment
pursuant to the terms of the Policy, a copy of which shall be made available
through the Trustee, and the Trustee shall furnish to the Certificate Insurer
its records evidencing the payments of principal of and interest on the Class A
Certificates, if any, which have been made by the Trustee and subsequently
recovered from Class A Certificateholders, and the dates on which such payments
were made.
(f) The Trustee shall, upon retirement of the Class A Certificates,
furnish to the Certificate Insurer a notice of such retirement, and, upon the
retirement of the Class A Certificates and the expiration of the term of the
Policy, surrender the Policy to the Certificate Insurer for cancellation.
SECTION 8.09 Effect of Payments by the Certificate Insurer;
Subrogation. Any payment with respect to principal of or interest on any of the
Class A Certificates which is made with moneys received pursuant to the terms of
the Policy shall not be considered payment of such Certificates from the Trust
and shall be paid to the Class A Certificateholders in accordance with Section
8.01. The Servicer, the Trustee and the Owner Trustee acknowledge, and each
Holder by its acceptance of a Class A Certificate or any interest therein
agrees, that without the need for any further action on the part of the
Certificate Insurer, the Originator, the Seller, the Servicer, the Trustee or
the Paying Agent (a) to the extent the Certificate Insurer makes payments,
directly or indirectly, on account of principal of or interest on any Class A
Certificates to the Holder of such Class A Certificates, the Certificate Insurer
will be fully subrogated to the rights of such Certificateholders to receive
such principal and interest from the Trust and (b) the Certificate Insurer shall
be paid such principal and interest but only from the sources and in the manner
provided herein for the payment of such principal and interest.
The Trustee and the Servicer shall cooperate in all respects with any
reasonable request by the Certificate Insurer for action to preserve or enforce
the Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Class A Certificateholders
as otherwise set forth herein.
SECTION 8.10 Notices to the Certificate Insurer. All notices,
statements, reports, certificates or opinions required by this Agreement to be
sent to any other party hereto or to any of the Certificateholders shall also be
sent to the Certificate Insurer.
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
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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 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 M, and the Class B Certificates shall be
evidenced by
(i) one or more Class A Certificates representing $402,500,000
initial aggregate principal balance,
(ii) one or more Class A-IO Certificates representing $100,000,000
Original Notional Principal Amount,
(iii) one or more Class M-1 Certificates representing $31,250,000
initial aggregate principal balance,
(iv) one or more Class M-2 Certificates representing $25,750,000
initial aggregate principal balance,
(v) one or more Class B-1 Certificates representing $25,500,000
initial aggregate principal balance,
(vi) one or more Class B-2 Certificates representing $15,000,000
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
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Class C Subsidiary Certificates shall be issuable in Percentage Interests and
shall each be evidenced by a single certificate issued on the Closing Date to
Green Tree Finance Corp.-Two.
(d) The Certificates shall be executed by manual signature on behalf
of the Trustee by a duly authorized Responsible Officer or authorized signatory.
Certificates bearing the signatures of individuals who were at any time the
proper officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
execution and delivery of such Certificate or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless such Certificate has been
executed by manual signature in accordance with this Section, and such signature
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their execution, except for those
Certificates executed on the Closing Date, which shall be dated the Closing
Date.
SECTION 9.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall keep at the office or agency to be maintained
in accordance with Section 12.02 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.
(b) The provisions of this Subsection (b) also apply with respect to
any transfers of Certificates.
(1) Subject to clauses (2) and (3) below, no transfer of a
Class B-2 Certificate, Class B-3I Certificate or Class C Certificate
shall be made by the Originator or any other Person unless such
transfer is exempt from the registration requirements of the Act, as
amended, and any applicable state securities laws or is made in
accordance with the Act and laws. In the event that any such transfer
is to be made, (a) the Originator may require a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the
Originator that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the
Act and laws or is being made pursuant to the Act and laws, which
Opinion of Counsel shall not be an expense of the Trustee or the
Originator, and (b) the Trustee shall require the transferee to execute
an investment letter substantially in the form of Exhibit L attached
hereto, which investment letter shall not be an expense of the Trustee
or the Originator. Any Class B-2 Certificateholder, Class B-3I
Certificateholder or Class C Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the
Originator and the Certificate Registrar against any liability that may
result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
(2) No transfer of a Class B-2 Certificate, a Class B-3I
Certificate or a Class C Certificate or any interest therein, shall be
made to any employee benefit plan, trust or
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account that is subject to ERISA, or that is described in Section
4975(e)(1) of the Code (each, a "Plan"), or to any person investing on
behalf of or with "plan assets" or a plan unless the prospective
transferee of a Certificate or interest therein provides the Servicer
and the Trustee with a certification of facts and, at its own expense,
an Opinion of Counsel which establish to the satisfaction of the
Servicer and the Trustee that such transfer will not result in a
violation of Section 406 of ERISA or Section 4975 of the Code or cause
the Servicer, the Originator or the Trustee to be deemed a fiduciary of
such Plan or result in the imposition of an excise tax under Section
4975 of the Code.
(3) Notwithstanding anything to the contrary contained herein,
(A) neither the Class C Subsidiary Certificate nor the Class C
Master Certificate, nor any interest therein, shall be
transferred, sold or otherwise disposed of to a
"disqualified organization," within the meaning of Section
860E(e)(5) of the Code (a "Disqualified Organization"),
including, but not limited to,
(i) the United States, a state or political subdivision
thereof, a foreign government, an international
organization or an agency or instrumentality of any
of the foregoing,
(ii) an organization (other than a cooperative described
in Section 521 of the Code) which is exempt from the
taxes imposed by Chapter 1 of the Code and not
subject to the tax imposed on unrelated business
income by Section 511 of the Code, or
(iii) a cooperative described in Section 1381(a)(2)(C) of
the Code, and
(B) prior to any registration of any transfer, sale or other
disposition of the Class C Subsidiary Certificate or Class C
Master Certificate, the proposed transferee shall deliver to
the Trustee, under penalties of perjury, an affidavit that
such transferee is not a Disqualified Organization, with
respect to which the Trustee shall have no actual knowledge
that such affidavit is false, and the transferor and the
proposed transferee shall each deliver for the Trustee an
affidavit with respect to any other information reasonably
required by the Trustee pursuant to the REMIC Provisions,
including, without limitation, information regarding the
transfer of noneconomic residual interests and transfers of
any residual interest to or by a foreign person;
provided, however, that, upon the delivery to the Trustee of an
Opinion of Counsel, in form and substance satisfactory to the
Trustee and rendered by Independent counsel, to the effect that
the beneficial ownership of the Class C Certificate by any
Disqualified Organization will not result in the imposition of
federal income tax upon the Subsidiary REMIC, Intermediate REMIC
or Master REMIC or any Certificateholder or any other person or
otherwise adversely affect the status of the Subsidiary REMIC,
Intermediate REMIC or Master REMIC as a
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REMIC, the foregoing prohibition on transfers, sales and other
dispositions, as well as the foregoing requirement to deliver a
certificate prior to any registration thereof, shall, with
respect to such Disqualified Organization, terminate.
Notwithstanding any transfer, sale or other disposition of the
Class C Certificate, or any interest therein, to a Disqualified
Organization or the registration thereof in the Certificate
Register, such transfer, sale or other disposition and any
registration thereof, unless accompanied by the Opinion of
Counsel described in the preceding sentence, shall be deemed to
be void and of no legal force or effect whatsoever and such
Disqualified Organization shall be deemed to not be the Class C
Certificateholder for any purpose hereunder, including, but not
limited to, the receipt of distributions on the Class C
Certificate, and shall be deemed to have no interest whatsoever
in the Class C Certificate. Each Class C Certificateholder, by
his acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this Section 9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance
with the provisions of this Section 9.02(b) shall be deemed to be void
and of no legal force or effect whatsoever and such transferee shall be
deemed to not be the Certificateholder for any purpose hereunder,
including, but not limited to, the receipt of distributions on such
Certificate, and shall be deemed to have no interest whatsoever in such
Certificate.
(5) The Trustee shall give notice to Standard & Poor's, ▇▇▇▇▇'▇
and Fitch promptly following any transfer, sale or other disposition of
a Class B-3I or Class C Certificate.
(c) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
original denomination, upon surrender of such Certificates to be exchanged at
such office. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder thereof or his
or her attorney duly authorized in writing.
(d) Except as provided in paragraph (e) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times:
(i) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(ii) the Depository shall maintain book-entry records with respect to
the Certificate Owners and with respect to ownership and
transfers of such Book-Entry Certificates;
(iii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository;
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(iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(v) the Trustee shall deal with the Depository, Depository
Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and
votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different
Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to
its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and
persons shown on the books of such indirect participating
firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(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.
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(f) On or prior to the Closing Date, there shall be delivered to the
Depository two Class A Certificates, one Class A-IO Certificate, one Class M-1
Certificate, one Class M-2 Certificate, and one Class B-1 Certificate, each in
registered form registered in the name of the Depository's nominee, Cede & Co.,
the total face amount of which represents 100% of the related Original Principal
Balance or Original Notional Principal Amount, respectively. At any time after
the Closing Date, subject to compliance with the normal procedures of the
Trustee and the Depository, the Class B-2 Certificateholders may deliver to the
Depository one Class B-2 Certificate, registered in the name of Cede & Co. (or
other nominee of the Depository), the total face amount of which represents 100%
of the Original Principal Balance of the Class B-2 Certificate. If, however, the
aggregate principal amount of a Class of Class A Certificates, Class M
Certificates or Class B Certificates exceeds $400,000,000, one such Class A
Certificate, Class M Certificate and/or Class B Certificate will be issued with
respect to each $400,000,000 of principal amount and an additional Certificate
of such Class or Classes will be issued with respect to any remaining principal
amount. Each such Class A, Class M and Class B Certificate registered in the
name of the Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
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.
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SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates. If any
mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and there is delivered to the Certificate
Registrar and the Trustee such security or indemnity as may be required by each
to save it harmless, then in the absence of notice to the Certificate Registrar
or the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and original denomination. Upon the issuance of any new Certificate under
this Section 9.04, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Any duplicate Certificate
issued pursuant to this Section 9.04 shall constitute complete and indefeasible
evidence of ownership of the Percentage Interest, as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Certificate shall be
found at any time.
SECTION 9.05 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Servicer, the Seller, the Trustee,
the Paying Agent and the Certificate Registrar may treat the person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving remittances pursuant to Section 8.01 and for all other
purposes whatsoever, and none of the Servicer, the Seller, the Trustee, the
Certificate Registrar, the Paying Agent or any agent of the Servicer, the
Seller, the Trustee, the Paying Agent or the Certificate Registrar shall be
affected by notice to the contrary.
SECTION 9.06 Access to List of Certificateholders' Names and Addresses. The
Certificate Registrar will furnish to the Trustee and the Servicer, within five
days after receipt by the Certificate Registrar of a request therefor from the
Trustee in writing, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Certificateholders as of the most recent
Record Date. If Holders of Certificates evidencing, as to any Class, Percentage
Interests representing 25% or more (hereinafter referred to as "Applicants")
apply in writing to the Trustee, and such application states that the Applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and is accompanied by a copy of
the communication which such Applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, afford
such Applicants access during normal business hours to the most recent list of
Certificateholders held by the Trustee. If such list is as of a date more than
90 days prior to the date of receipt of such Applicants' request, the Trustee
shall promptly request from the Certificate Registrar a current list as provided
above, and shall afford such Applicants access to such list promptly upon
receipt. Every Certificateholder, by receiving and holding a Certificate, agrees
with the Certificate 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
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of Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the execution and delivery of Certificates "by the Trustee."
ARTICLE X
INDEMNITIES
SECTION 10.01 Seller's and Originator's Indemnities. The Seller and
Originator will jointly and severally defend and indemnify the Trust, the
Trustee (including the Custodian, the Paying Agent and any other agents of the
Trustee), the Certificate Insurer and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation of any third-party
claims
(i) arising out of or resulting from the origination of any Contract
(including but not limited to truth in lending requirements) or the
servicing of such Contract prior to its transfer to the Trust (but
only to the extent such cost, expense, loss, damage, claim or
liability is not provided for by the Originator's repurchase of such
Contract pursuant to Section 3.06) or
(ii) arising out of or resulting from the use or ownership of any
Manufactured Homes by the Originator or the Servicer or any Affiliate
of either.
Notwithstanding any other provision of this Agreement, the obligation of the
Originator under this Section shall not terminate upon a Service Transfer
pursuant to Article VII, except that the obligation of the Originator under this
Section shall not relate to the actions of any subsequent Servicer after a
Service Transfer.
SECTION 10.02 Liabilities to Obligors. No obligation or liability to any
Obligor under any of the Contracts is intended to be assumed by the Trust or the
Certificateholders under or as a result of this Agreement and the transactions
contemplated hereby and, to the maximum extent permitted and valid under
mandatory provisions of law, the Trust and the Certificateholders expressly
disclaim such assumption.
SECTION 10.03 Tax Indemnification. The Originator agrees to pay, and to
indemnify, defend and hold harmless the Trust, the Trustee (including the
Custodian, the Paying Agent and any other capacities of or agents of the
Trustee) and the Certificateholders from, any taxes which may at any time be
asserted with respect to, and as of the date of, the transfer of the Contracts
to the Trust, including, without limitation, any sales, gross receipts, general
corporation, personal property, privilege or license taxes (but not including
any federal, state or other taxes arising out of the creation of the Trust and
the issuance of the Certificates), any tax imposed on the Trust as a result of
the Originator's repurchase of any Contract pursuant to Section 3.06(c), and
costs, expenses and reasonable counsel fees in defending against the same,
whether arising by reason of the acts to be performed by the Originator, the
Seller, the Servicer or the Trustee under this Agreement or imposed against the
Trust, a Certificateholder or otherwise.
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SECTION 10.04 Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian, the Paying Agent and
any other capacities of or agents of the Trustee), the Certificate Insurer and
the Certificateholders against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation, in respect of any action taken or omitted to be taken by
the Servicer with respect to any Contract. This indemnity shall survive any
Service Transfer (but the original Servicer's obligations under this Section
10.04 shall not relate to any actions of any subsequent Servicer after a Service
Transfer) and any payment of the amount owing under, or any repurchase by the
Originator of, any such Contract.
SECTION 10.05 Operation of Indemnities. Indemnification under this Article
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Originator or the Servicer has made any indemnity
payments to the Trustee pursuant to this Article and the Trustee thereafter
collects any of such amounts from others, the Trust will repay such amounts
collected to the Originator or the Servicer, as the case may be, without
interest.
SECTION 10.06 REMIC Tax Matters. If a Class C Certificateholder, pursuant
to Section 6.06, pays any taxes or charges imposed upon the Subsidiary REMIC,
Intermediate REMIC or Master REMIC, as the case may be, as a REMIC or otherwise,
such taxes or charges, except to the extent set forth in the following proviso,
shall be expenses and costs of the Trust and the Class C Certificateholder shall
be entitled to be reimbursed therefor out of the Certificate Account as provided
in Section 8.03; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class C Certificateholder be
entitled to reimbursement therefor out of the Certificate Account, if and to the
extent that such taxes or charges resulted from a failure by the Originator, the
Trustee or any Servicer to comply with the provisions of Section 2.04.
ARTICLE XI
THE TRUSTEE
SECTION 11.01 Duties of Trustee. The Trustee, prior to the occurrence of an
Event of Termination and after the curing of all Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
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.
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(a) Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement.
(b) The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders with aggregate Percentage Interests
representing 25% or more of the Trust relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Agreement.
(d) The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such event or the Trustee
receives written notice of such event from the Servicer or the Holders of
Certificates evidencing, as to any Class, Percentage Interests representing 25%
or more.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 11.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01, subsections (a) - (e) below apply.
(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
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respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel.
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(d) Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition to
so proceeding. The reasonable expense of every such examination shall be paid by
the Servicer or, if paid by the Trustee, shall be reimbursed by the Servicer
upon demand.
(e) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions of
such agents, attorneys or custodians if appointed by it with due care hereunder.
SECTION 11.03 Trustee Not Liable for Certificates or Contracts. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein or in the Certificates (other than the Trustee's execution thereof). The
Trustee makes no representations as to the validity or sufficiency of this
Agreement, of the Certificates (other than its execution thereof) or of any
Contract, Contract File, Land-and-Home Contract File or related document. The
Trustee shall not be accountable for the use or application by the Servicer, the
Originator or the Seller of funds paid to the Originator or the Seller, as
applicable, in consideration of conveyance of the 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
Waiver 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
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trust or power conferred on the Trustee; provided, however, that, subject to
Section 11.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Certificateholders not parties to such direction;
and provided further that nothing in this Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by the Certificateholders; and provided further
that the Trustee shall instead follow the directions of Holders of Class A
Certificates, Holders of Class A-IO Certificates, Holders of Class M
Certificates and Holders of Class B Certificates evidencing, as to each such
Class, Percentage Interests aggregating 51% or more whenever it receives
conflicting directions from Class A Certificateholders, Class A-IO
Certificateholders, Class M Certificateholders and Class B Certificateholders.
Holders of Class A Certificates, Holders of Class A-IO Certificates, Holders of
Class M Certificates and Holders of Class B Certificates evidencing, as to each
such Class, Percentage Interests representing 51% or more may on behalf of
Certificateholders waive any past Event of Termination hereunder and its
consequences, except a default in respect of a covenant or provision hereof
which under Section 12.07 cannot be modified or amended without the consent of
all Certificateholders, and upon any such waiver, such Event of Termination
shall cease to exist and shall be deemed to have been cured for every purpose of
this Agreement; but no such waiver shall extend to any subsequent or other Event
of Termination or impair any right consequent thereon. Following the Class M-2
Cross-Over Date, if all distributions payable to the Class A Certificateholders,
Class A-IO Certificateholders and the Class M Certificateholders have either
been made or provided for in accordance with this Agreement, then the Holders of
Class B-1 Certificates may exercise the rights given to the Class A
Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section. Following the Class B-1 Cross-Over Date,
if all distributions payable to the Class A Certificateholders, Class A-IO
Certificateholders and the Class M Certificateholders have either been made or
provided for in accordance with this Agreement, then the Holders of Class B-2
Certificates may exercise the rights given to the Class A Certificateholders,
Class A-IO Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section.
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer agrees to pay the fees and expenses set forth in subsections (a) - (c)
below.
(a) The Servicer shall pay to the Trustee reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust).
(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
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connection with the acceptance or administration of this trust and its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
All such payments by the Servicer shall be made from its own funds. The
covenants in this Section 11.05 shall be for the benefit of the Trustee in its
capacities as Trustee, Custodian, Paying Agent and Certificate Registrar
hereunder, and shall survive the termination of this Agreement.
SECTION 11.06 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a financial institution organized and doing
business under the laws of the United States of America or any State, authorized
under such laws to exercise corporate trust powers and a Title I approved lender
pursuant to FHA Regulations, shall not be an Affiliate of the Originator, and
shall have a combined capital and surplus of at least $50,000,000 or shall be a
member of a bank holding system the aggregate combined capital and surplus of
which is $50,000,000, provided that the Trustee's separate capital and surplus
shall at all times be at least the amount required by Section 310(a)(2) of the
Trust Indenture Act of 1939, as amended. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of a
supervising or examining authority, then for the purposes of this Section 11.06,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In addition, the Trustee shall at all times have a long-term
deposit rating (or, if the Trustee is a wholly owned subsidiary of a bank
holding company system and not rated, the bank holding company shall have a
long-term senior unsecured debt rating) from Standard & Poor's of at least BBB,
or as shall be otherwise acceptable to Standard & Poor's, and a rating from
▇▇▇▇▇'▇ (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 Standard & Poor's, ▇▇▇▇▇'▇ and Fitch. Upon receiving such
notice of resignation, the Originator shall promptly appoint a successor Trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to each of the Servicer and the Originator and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
shall have accepted appointment within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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
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copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 11.08.
SECTION 11.08 Successor Trustee. Any successor Trustee appointed as
provided in Section 11.07 shall execute, acknowledge and deliver to the
Servicer, the Originator and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The predecessor Trustee shall deliver
or cause to be delivered to the successor Trustee the Contracts, Contract Files
and Land-and-Home Contract Files and any related documents and statements held
by it hereunder; and, if the Land-and-Home Contract Files are then held by a
custodian pursuant to a custodial agreement, the predecessor Trustee and the
custodian shall amend such custodial agreement to make the successor Trustee the
successor to the predecessor Trustee thereunder; and the Servicer, the
Originator and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 11.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor ▇▇▇▇▇▇▇ 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 Standard & Poor's, ▇▇▇▇▇'▇ and Fitch in the event
it is a party to any merger, conversion or consolidation.
SECTION 11.10 Tax Returns. Upon the Servicer's request, the Trustee
will furnish the Servicer with all such information as the Servicer may
reasonably require in connection with preparing all tax returns of the
Subsidiary REMIC, the Intermediate REMIC and the Master REMIC and the Trustee
shall execute such returns.
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SECTION 11.11 Obligor Claims. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Contracts based upon provisions therein complying with, or
upon other rights or remedies arising from, any legal requirements applicable to
the Contracts, including, without limitation, the Federal Trade Commission's
Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses
(16 C.F.R. (S). 433) as amended from time to time. The Trustee and Originator
agree to the provisions set forth below.
(a) The Trustee is not, and shall not be deemed to be, either in any
individual capacity, as trustee hereunder or otherwise, a creditor, or a joint
venturer with or an Affiliate of, or acting in concert or cooperation with, any
seller of home improvements, in the arrangement, origination or making of
Contracts. The Trustee is the holder of the Contracts only as trustee on behalf
of the Certificateholders, and not as a principal or in any individual or
personal capacity.
(b) The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments, pursuant to such legal actions.
(c) The Trustee will pay, solely from available Trust monies, affirmative
claims for recovery by Obligors only pursuant to final judicial orders or
judgments, or judicially approved settlement agreements, resulting from such
legal actions.
(d) The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors' legal actions to
recover affirmative claims against Certificateholders.
(e) The Trustee will cooperate with and assist Certificateholders in their
defense of legal actions by ▇▇▇▇▇▇▇▇ 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
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specified in the instrument of appointment; provided, however, that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee.
Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of monies
shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee, to the extent also imposed upon such
separate trustees, co-trustees or custodians, shall be conferred or
imposed upon and exercised or performed by the Trustee and such
separate trustee, co-trustee, or custodian jointly, except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including holding
of the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed by such separate trustee, co-trustee, or
custodian;
(iii) no separate trustee, co-trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other
separate trustee, co-trustee or custodian hereunder; and
(iv) the Servicer may at any time accept the resignation of or remove any
separate trustee, co-trustee or custodian, so appointed by it.
If any separate trustee, co-trustee or custodian shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Servicer if
and only to the extent the Servicer shall have consented in writing to his or
its appointment, which consent shall not be unreasonably withheld.
SECTION 11.13 Agents of Trustee. To the extent not prohibited by law and
not inconsistent with the terms of this Agreement (including, without
limitation, Section 11.12), the Trustee may, with the prior consent of the
Servicer, appoint one or more agents to carry out ministerial matters on behalf
of the Trustee under this Agreement.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Servicer Not to Assign Duties or Resign; Delegation of
Servicing Functions. The Servicer may not sell or assign its rights and duties
as Servicer hereunder, except as expressly provided for herein, provided that
the Servicer may pledge or assign the right to receive all or any portion of the
Monthly Servicing Fee payable to it. The Servicer shall not
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resign from the obligations and duties hereby imposed on it except upon
determination that the performance of its duties hereunder is no longer
permissible under applicable law or is in material conflict by reason of
applicable law with any other activities carried on by it. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel for the Servicer to such effect addressed and delivered to
the Trustee. No such resignation shall become effective until the Trustee or a
successor servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Sections 7.02 and 7.03.
Notwithstanding the foregoing, the Servicer agrees to comply with the
provisions of subsections (a)-(c) below.
(a) Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Servicer shall satisfy
the criteria set forth in the definition of an Eligible Servicer. The Servicer
shall promptly notify Standard & Poor's, ▇▇▇▇▇'▇ and Fitch of any such merger to
which it is a party.
(b) Any Person acquiring all or substantially all of the manufactured
housing division of Conseco Finance Corp., who assumes all of the obligations of
the Servicer hereunder and who satisfies the criteria set forth in the
definition of "Eligible Servicer," shall become the Servicer hereunder. The
Servicer shall promptly notify Standard & Poor's, ▇▇▇▇▇'▇ and Fitch of any such
acquisition.
(c) Conseco Finance Corp., if it is the Servicer, may delegate some or all
of its servicing duties to a wholly owned subsidiary of Conseco Finance Corp.,
for so long as said subsidiary remains, directly or indirectly, a wholly owned
subsidiary of Conseco Finance Corp. Notwithstanding any such delegation, Conseco
Finance Corp. shall retain all of the rights and obligations of the Servicer
hereunder.
SECTION 12.02 Maintenance of Office or Agency. The Trustee will maintain
in St. ▇▇▇▇, 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 Certificateholders
and the Certificate Insurer of any change in the location of the Certificate
Register or any such office or agency.
SECTION 12.03 Termination.
(a) This Agreement, the Trust and each of the Subsidiary REMIC,
Intermediate REMIC and Master REMIC shall terminate (after distribution of all
amounts due to Certificateholders and the Certificate Insurer 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
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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 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
(i) as to Class A Certificates, the Class A Principal Balance, together
with any Unpaid Class A Interest Shortfall and one month's interest
at the Class A-IO Remittance Rate on the Class A Principal Balance
(in each case calculated in the
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manner specified in Section 1.03), and as to Class A-IO Certificates
any unpaid Class A-IO Interest Shortfall together with one month's
interest at the Class A-IO Remittance Rate on the Class A-IO
Notional Principal Amount,
(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
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.
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(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 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.
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Notwithstanding the foregoing, any person into which the Originator may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Originator shall be a party, or any Person
succeeding to the business of the Originator, shall be the successor of the
Originator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Originator shall promptly notify Standard &
Poor's, ▇▇▇▇▇'▇ and Fitch of any such merger to which it is a party.
SECTION 12.07 Amendment.
(a) This Agreement may be amended from time to time by the Originator,
the Servicer and the Trustee, with the consent of the Certificate Insurer but
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 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 Certificate
Insurer and 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,
(iii) result in the disqualification of the Subsidiary REMIC, Intermediate
REMIC or Master REMIC as a REMIC under the Code,
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(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 and the Certificate Insurer if such
amendment would result in the disqualification of any of the Subsidiary REMIC,
the Intermediate REMIC or the Master REMIC as a REMIC under the Code.
(d) Concurrently with the solicitation of any consent pursuant to this
Section 12.07, the Trustee shall furnish written notification to the Rating
Agencies of such solicitation. Promptly after the execution of any amendment
pursuant to this Section 12.07, the Trustee shall furnish written notification
of the substance of such amendment to the Rating Agencies and each
Certificateholder.
(e) It shall not be necessary for the consent of Certificateholders
under this Section 12.07 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
(f) The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
(g) In connection with any amendment pursuant to this Section, the
Trustee shall be entitled to receive an unqualified Opinion of Counsel to the
Servicer to the effect that such amendment is authorized or permitted by the
Agreement.
(h) In the absence of the consent described in subsection (c) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an unqualified Opinion of Counsel, the expense of which
shall not be an expense of the Trust, stating that any such amendment
(i) will not adversely affect the status of the Subsidiary REMIC,
Intermediate REMIC or Master REMIC as a REMIC or the status of the
Regular Certificates as "regular interests" in the Master REMIC, and
130
(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) Upon the execution of any amendment or consent pursuant to this
Section 12.07, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Certificateholder hereunder shall be bound thereby.
SECTION 12.08 Notices. All communications and notices pursuant hereto to
the Servicer, the Originator and the Trustee shall be in writing and delivered
or mailed to it at the appropriate following address:
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-1639
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Originator or Servicer:
Conseco Finance Corp.
1100 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-1639
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
131
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 Fitch:
Fitch, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇'▇:
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Financing, Manufactured Housing Surveillance
Group
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Certificate Insurer:
Ambac Assurance Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Risk Management, Consumer Asset-Backed Securities
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.
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.
132
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this __th
day of June, 2001.
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
133
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 No.
(Senior)
Remittance Rate: Floating Rate equal to the
Cut-off Date: as defined in the Weighted Average Contract Rate (subject to
Pooling and Servicing Agreement a maximum of 6.60% (or, on each Remittance
dated as of June 1, 2001 Date after the first Remittance Date on
which the Pool Scheduled Principal Balance
First Remittance Date: is equal to or less than 10% of the Cut-off
August, 2001 Date Pool Principal Balance, 7.10%) and
(b) the Adjusted Weighted Average Contract
Rate
Servicer:
Conseco Finance Corp. Denomination: $1,000
Aggregate Denomination of
All Class A Certificates: $402,500,000
Maturity Date: February 1, 2033
(or if such day is not a Business Day, then
the next succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
-----------------------------
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
---------------------------------------------
SERIES 2001-2, CLASS A (SENIOR)
-------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2001-2 (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
A-1-1
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, 2001, among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in August 2001, 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 February 1, 2033 or the next succeeding
Business Day if such February 1 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.
A-1-2
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-1-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2001-2 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 2001-2
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
A-1-5
EXHIBIT A-2
FORM OF CLASS A-IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class A-IO No.
(Senior)
Remittance Rate: 2.500%
Cut-off Date: as defined in the
Pooling and Servicing Agreement Denomination:
dated as of June 1, 2001
Aggregate Original Notional Principal Amount
First Remittance Date: of all Class A-IO Certificates: $100,000,000
August 1, 2001
Maturity Date: February 1, 2033
Servicer: (or if such day is not a
Conseco Finance Corp. Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-2, 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 2001-2 (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, 2001, among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the
A-2-1
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 August 2001, 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 February 1, 2033 or the next succeeding
Business Day if such February 1 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.
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.
A-2-2
or in such other name as requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-2-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2001-2 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 2001-2
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: Floating Rate equal to
Cut-off Date: as defined in the the Weighted Average Contract Rate
Pooling and Servicing Agreement (subject to a maximum of _____%)
dated as of June 1, 2001
Denomination: $1,000
First Remittance Date:
August 1, 2001 Aggregate Denomination of
All Class M-[1][2]
Servicer: Certificates: $__________
Conseco Finance Corp.
Maturity Date: February 1, 2033
(or if such day is not a Business Day,
then the next succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
-----------------------------
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
---------------------------------------------
SERIES 2001-2, 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 2001-2 (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, 2001 among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in August 2001, 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
February 1, 2033 or the next succeeding Business Day if such February 1 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 Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-2 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 2001-2
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: Floating Rate equal to the
Cut-off Date: as defined in the Weighted Average Contract Rate (subject to a
Pooling and Servicing Agreement maximum of ____%)
dated as of June 1, 2001
Denomination: $1,000
First Remittance Date:
August 1, 2001 Aggregate Denomination of All Class B-[1][2]
Certificates: $____________
Servicer:
Conseco Finance Corp. Maturity Date: February 1, 2033
(or if such day is not a Business Day, then the
next succeeding Business Day)
CUSIP: _____
C-1-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
------------------------------------------------
PASS-THROUGH CERTIFICATES, SERIES 2001-2, CLASS B-[1][2] (SUBORDINATE)
----------------------------------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that _______________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificate Trust 2001-2 (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, 2001, among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in August 2001 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
February 1, 2033, or the next succeeding Business Day if such February 1 is not
a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the
C-1-2
Agreement and all amendments thereto will be provided to any Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-1-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2001-2 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 2001-2
By U.S. BANK NATIONAL ASSOCIATION
By ______________________________
Authorized Signatory
C-1-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated:____________________
By _______________________________
Signature
C-1-5
EXHIBIT C-2
FORM OF CLASS B-3I CERTIFICATE
------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Class B-3I No._____
(Subordinate)
Percentage Interest: _____%
Cut-off Date: as defined in the
Pooling and Servicing Agreement dated Maturity Date: February 1, 2033
as of June 1, 2001 (or if such day is not a Business Day, then the
next succeeding Business Day)
First Remittance Date:
August 1, 2001
Servicer:
Conseco Finance Corp.
C-2-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
------------------------------------------------
PASS-THROUGH CERTIFICATES, SERIES 2001-2, CLASS B-3I (SUBORDINATE)
------------------------------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.-Two is the registered
owner of the undivided Percentage Interest set forth above in Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2001-2 (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, 2001, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and U.S. Bank National Association, as Trustee
of the Trust (the "Trustee"). This Certificate is one of the Certificates
described in the Agreement and is issued pursuant and subject to the Agreement.
By acceptance of this Certificate the holder assents to and becomes bound by the
Agreement. To the extent not defined herein, all capitalized terms have the
meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each related Due Period commencing in August 2001 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 February 1, 2033 or the next succeeding
Business Day if such February 1 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
C-2-2
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-2-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2001-2 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 2001-2
By U.S. BANK NATIONAL ASSOCIATION
By _______________________________
Authorized Signatory
C-2-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: __________________
By _______________________________
Signature
C-2-5
EXHIBIT D
FORM OF ASSIGNMENT
------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of June 1, 2001 among Conseco Finance Corp., as Originator
and Servicer (the "Originator"), Conseco Finance Securitizations Corp., as
Seller (the "Seller") and U.S. Bank National Association, as Trustee (the
"Trustee"), the Seller does hereby transfer, assign, set over and otherwise
convey to the Trustee (i) all the right, title and interest of the Seller in and
to the Contracts, including, without limitation, all right, title and interest
in and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than principal and interest due on the Contracts
on or before the applicable Cut-off Date), (ii) all rights under every Hazard
Insurance Policy relating to a Manufactured Home securing a Contract for the
benefit of the owner of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any Contract that is an FHA/VA Contract, (iv) 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) amounts on deposit in the Capitalized Interest Account, the Pre-Funding
Account and the Staged-Funding Reserve Account, (viii) the Reserve Fund
Contracts, and (ix) all proceeds and products in any way derived from any of the
foregoing. Capitalized terms used herein but not defined herein have the
meanings assigned to them in the Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ___ day of June, 2001.
CONSECO FINANCE SECURITIZATIONS
CORP.
By: _______________________________
[Name]
[Title]
D-1
EXHIBIT E
FORM OF CERTIFICATE OF OFFICER
------------------------------
[CONSECO FINANCE CORP.]
[CONSECO FINANCE SECURITIZATIONS CORP.]
OFFICER'S CERTIFICATE
We, ______________ and _____________ , hereby certify that we are the
duly elected _________________ and _____________ , respectively, of [Conseco
Finance Corp. ("Conseco Finance")] [Conseco Finance Securitizations Corp.
("Conseco Securitizations")], and that as such we are duly authorized to execute
and deliver this Certificate on behalf of [Conseco Finance] [Conseco
Securitizations] in connection with the Pooling and Servicing Agreement, dated
as of June 1, 2001 (the "Pooling and Servicing Agreement") among Conseco Finance
Corp., Conseco Finance Securitizations Corp. and U.S. Bank National Association,
as Trustee, and the Underwriting Agreement relating to the Class A, Class M-1,
Class M-2 and Class B-1 Certificates, dated ______________ , 2001, (the
"Underwriting Agreement"), among Conseco Finance Corp., Conseco Finance
Securitizations Corp. and ▇▇▇▇▇▇ Brothers Inc., Credit Suisse First Boston
Corporation, Deutsche Banc ▇▇▇▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (the "Underwriters") (all capitalized terms used herein without
definition having the respective meanings specified in the Pooling and Servicing
Agreement and the Underwriting Agreement) and further certify as follows:
(1) Attached hereto as Exhibits I and II, respectively, are true
and correct copies of the [Certificate] [Articles] of Incorporation and
[Restated] Bylaws of [Conseco Finance] [Conseco Securitizations],
together with all amendments thereto, both of which are in full force
and effect on the date hereof.
(2) No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of [Conseco Finance] [Conseco
Securitizations] are pending or contemplated.
(3) There is no litigation pending, or to our knowledge,
threatened, which, if determined adversely to [Conseco Finance]
[Conseco Securitizations], would affect adversely the sale of the
Contracts, the execution, delivery or enforceability of the Pooling and
Servicing Agreement, the Transfer Agreement and the Underwriting
Agreement (the "Transaction Documents")[, or the ability of Conseco
Finance to service and administer the Contracts in accordance with the
terms of the Pooling and Servicing Agreement].
(4) Each person who, as an officer or representative of [Conseco
Finance] [Conseco Securitizations], signed the Transaction Documents,
or any other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Contracts in accordance
with the Transaction Documents, was at the time of such signing and is
as of the date hereof duly elected or appointed, qualified and acting
as such
E-1
officer or representative, and the signatures of such persons appearing
on such documents are their genuine signatures.
(5) Neither the execution and delivery by [Conseco Finance]
[Conseco Securitizations] of the Transaction Documents, nor its
compliance with the terms and provisions thereof, will conflict with,
or result in a breach of, any of the terms of, or constitute a default
under, any judgment, order, injunction or decree of any domestic court
or governmental authority to which [Conseco Finance] [Conseco
Securitizations] is subject or any indenture, agreement, contract or
commitment to which [Conseco Finance] [Conseco Securitizations] is a
party or by which it is bound, which conflict, breach or default
presents a reasonable possibility of having a materially adverse effect
on the business or operations of [Conseco Finance] [Conseco
Securitizations]. No UCC-1 financing statements or statements of
assignment listing [Conseco Finance] [Conseco Securitizations] as
debtor and describing any of the Contracts as collateral other than the
UCC-1 financing statement in favor of the Trustee, have been signed on
behalf of [Conseco Finance] [Conseco Securitizations] and filed by any
person after _____________ and prior to the date hereof.
(6) Attached hereto as Exhibit IV is a certified true copy of
the resolutions of the Board of Directors of [Conseco Finance] [Conseco
Securitizations] (the "Resolutions") adopted with respect to the
authorization of [Conseco Finance] [Conseco Securitizations] to take
such actions and enter into such agreements as are necessary to sell
and service the Contracts in accordance with the Transaction Documents;
said resolutions have not been amended, modified, annulled or revoked
and are in full force and effect on the date hereof.
(7) [The Registration Statement and the Prospectus, at the time
the Registration Statement became effective did comply, and as of the
date hereof comply, in all material respects with the requirements of
the Securities Act of 1933, as amended (the "1933 Act") and the
Regulations. The Registration Statement, at the time it became
effective did not, and as of the date hereof does not, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus as of the date thereof did not,
and as of the date hereof does not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in, or omissions from, the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to [Conseco Finance] [Conseco Securitizations] in writing by
the Underwriters expressly for use in the Registration Statement or
Prospectus. The conditions to the use by [Conseco Finance] [Conseco
Securitizations] of registration statement on Form S-3 under the 1933
Act, as set forth in the General Instructions to Form S-3, have been
satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of [Conseco Finance]
[Conseco Securitizations] which 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.]
E-2
(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, 2001.
[CONSECO FINANCE CORP.]
By: ___________________________________
[Name]
[Title]
[CONSECO FINANCE SECURITIZATIONS CORP.]
By: ___________________________________
[Name]
[Title]
E-3
EXHIBIT F
FORM OF OPINION OF COUNSEL
--------------------------
The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall be to the effect that
undefined capitalized terms have the meanings set forth in the Pooling and
Servicing Agreement):
(1) The Originator is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware,
with corporate power to execute, deliver and perform its obligations
under the Pooling and Servicing Agreement, the Transfer Agreement and
the Underwriting Agreement (collectively, the "Transaction Documents")
(including the Limited Guaranty contained in the Pooling and Servicing
Agreement). The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Minnesota,
with corporate power to execute, deliver and perform in its obligations
under the Transaction Documents.
(2) The Transaction Documents have been duly authorized by all
requisite corporate action, duly executed and delivered by the
Originator and the Seller, and constitute the valid and binding
obligations of the Originator and the Seller enforceable in accordance
with their terms. The Certificates have been duly authorized by all
requisite corporate action and, when duly and validly executed by the
Trustee in accordance with the Pooling and Servicing Agreement, will be
validly issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
(3) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required to be obtained
by the Originator or the Seller for the consummation of the
transactions contemplated by the Transaction Documents, except such as
may be required under blue sky laws under any jurisdiction in
connection with the offering of the Certificates by the Underwriters
pursuant to the Underwriting Agreement.
(4) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as now in effect, and
the Trust is not required to be registered as an investment company
under the Investment Company Act of 1940.
(5) Neither the transfer of the Contracts by the Originator to
the Seller, nor the assignment of the Originator's security interest on
the related Manufactured Homes, nor the issuance or sale of the
Certificates, nor the execution and delivery of the Transaction
Documents, nor the consummation of any other of the transactions
contemplated in the Transaction Documents nor the fulfillment of the
terms of the Certificates or the Transaction Documents by the
Originator, will conflict with, or result in a breach, violation or
acceleration of, or constitute a default under, any term or provision
of the Certificate of Incorporation or Bylaws of the Originator or of
any indenture or other agreement or instrument known to us to which the
Originator is a party or by which it is bound, or result in a violation
of, or contravene the terms of any statute, order or
F-1
regulation, applicable to the Originator, of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it.
(6) Neither the transfer of the Contracts by the Seller to the
Trustee acting on behalf of the Trust, nor the assignment of the
Seller's security interest on the related Manufactured Homes, nor the
issuance or sale of the Certificates, nor the execution and delivery of
the Transaction Documents, nor the consummation of any other of the
transactions contemplated in the Transaction Documents, nor the
fulfillment of the terms of the Certificates or the Transaction
Documents by the Seller, will conflict with, or result in a breach,
violation or acceleration of, or constitute a default under, any term
or provision of the Articles of Incorporation or Bylaws of the Seller
or of any indenture or other agreement or instrument known to us to
which the Seller is a party or by which it is bound, or result in a
violation of, or contravene the terms of any statute, order or
regulation, applicable to the Seller, of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it.
(7) There are no actions or proceedings pending, nor to the best
of our knowledge, are there any investigations pending or overtly
threatened against the Originator or the Seller before any court,
administrative agency or other tribunal (A) asserting the invalidity of
the Transaction Documents, the Certificates, the hazard or flood
insurance policies applicable to any Contracts or the Errors and
Omissions Protection Policy, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) which is likely
materially and adversely to affect the performance by the Originator or
the Seller of its obligations under, or the validity or enforceability
of, the Transaction Documents or the Certificates, or (D) seeking
adversely to affect the federal income tax attributes of the
Certificates described in the Prospectus and the Prospectus Supplement
under the heading "Federal Income Tax Consequences."
(8) The transfer of the Initial and Additional Contracts to the
Trust in accordance with Section 2.01 of the Pooling and Servicing
Agreement would not be avoidable as a preferential transfer under
Section 547 of the United States Bankruptcy Code (11 U.S.C. (S)547),
as in effect on the date hereof, in the event that the Originator
became a debtor under the United States Bankruptcy Code.
(9) Pursuant to the Transfer Agreement the Originator has
transferred to the Seller all of the Originator's right, title and
interest in the Contracts, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security
interests (except tax or possessory liens) that may affect the right of
the Seller in and to such Contracts, and has delivered the Land-and-
Home contract Files 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 Minnesota identifying the Contracts as collateral and naming
the Originator as debtor and the Seller as secured party, and the
filing of continuation statements as required by the Transfer
Agreement, is necessary to perfect as against third parties the
assignment of the Contracts by the Originator to the Seller. We have
separately provided you with our opinion concerning whether such
assignment could be recharacterized as a pledge rather than a
F-2
sale in the event the Originator became a debtor under the United
States Bankruptcy Code. However, in the event such assignment were
recharacterized as a pledge securing a loan from the Seller to the
Originator, it is our opinion that the Seller would be deemed to have a
valid and perfected security interest in the Initial and Additional
Contracts and the proceeds thereof, which security interest would be
prior to any other security interest that may be perfected under the
Uniform Commercial Code as in effect in the State of Minnesota and over
any "lien creditor" (as defined in Minn. Stat. (S)336.9-301(3)) who
becomes such after the Closing Date, except that a subsequent purchaser
of any Contract who gives new value and takes possession thereof in the
ordinary course of his business would have priority over the Seller's
security interest in such Contracts, if such purchaser acts without
knowledge that such Contract was subject to a security interest. We
have assumed for the purposes of this opinion that during the term of
the Pooling and Servicing Agreement the Trustee, or its custodian,
shall maintain possession of the Land-and-Home Contract Files for the
purpose of perfecting the assignment to the Seller of the Contracts. We
express no opinion with respect to the enforceability of any individual
Contract or the existence of any claims, rights or other matters in
favor of any Obligor.
(10) Pursuant to the Pooling and Servicing Agreement the Seller
has transferred to the Trustee acting on behalf of the Trust all of the
Seller's right, title and interest in the Contracts, free and clear of
any and all other assignments, encumbrances, options, rights, claims,
liens or security interests (except tax or possessory liens) that may
affect the right of the Trustee in and to such Contracts, and has
delivered the Land-and-Home Contract Files to the Trustee or its
custodian. No filing or other action, other than the filing of a
financing statement on Form UCC-1 with the Secretary of State of the
State of Minnesota identifying the Contracts as collateral and naming
the Seller as debtor and the Trustee as secured party, and the filing
of continuation statements as required by the Pooling and Servicing
Agreement, is necessary to perfect as against third parties the
assignment of the Contracts by the Seller to the Trustee. We have
separately provided you with our opinion concerning whether such
assignment could be recharacterized as a pledge rather than a sale in
the event the Seller became a debtor under the United States Bankruptcy
Code. However, in the event such assignment were recharacterized as a
pledge securing a loan from the Certificateholders to the Seller, it is
our opinion that the Trustee would be deemed to have a valid and
perfected security interest in the Contracts and the proceeds thereof,
which security interest would be prior to any other security interest
that may be perfected under the Uniform Commercial Code as in effect in
the State of Minnesota and over any "lien creditor" (as defined in
Minn. Stat. (S)336.9-301(3)) who becomes such after the Closing Date,
except that a subsequent purchaser of any Contract, who gives new value
and takes possession thereof in the ordinary 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.
F-3
(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 Capitalized
Interest Account, Staged-Funding Contract Reserve Account and Pre-
Funding Account) will not be subject to tax and the income of the Trust
will be taxable to the holders of interests therein, all in accordance
with the provisions of the Code concerning REMICs. Moreover, ownership
of Certificates will not be a factor in determining whether such owner
is subject to Minnesota income and franchise taxes. Therefore, if the
owner of Certificates is not otherwise subject to Minnesota income or
franchise taxes in the State of Minnesota, such owner will not become
subject to such Minnesota taxes solely by virtue of owning
Certificates.
(12) The transfer of the Initial and Additional Contracts and the
proceeds thereof by the Originator to the Seller on the date hereof
pursuant to the Transfer Agreement would not be avoidable as a
fraudulent transfer under the Uniform Fraudulent Transfer Act as in
effect in Minnesota on the date hereof (Minn. Stat. (S)(S) 513.41
through 513.51), nor, should the Originator become a debtor under the
United States Bankruptcy Code, as a fraudulent transfer under Section
548 of the United States Bankruptcy Code (11 U.S.C. (S) 548) as in
effect on the date hereof.
(13) The transfer of the Initial and Additional Contracts and the
proceeds thereof by the Seller to the Trustee on the date hereof
pursuant to the Pooling and Servicing Agreement would not be avoidable
as a fraudulent transfer under the Uniform Fraudulent Transfer Act as
in effect in Minnesota on the date hereof (Minn. Stat. (S)(S) 513.41
through 513.51), nor, should the Seller become a debtor under the
United States Bankruptcy Code, as a fraudulent transfer under Section
548 of the United States Bankruptcy Code (11 U.S.C. (S) 548) as in
effect on the date hereof.
F-4
EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGEMENT
---------------------------------
U.S. Bank National Association, a national banking association, acting
as trustee (the "Trustee") of the trust created pursuant to the Pooling and
Servicing Agreement, dated as of June 1, 2001, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the "Seller") and the
Trustee (the "Pooling and Servicing Agreement") (all capitalized terms used
herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement), acknowledges, pursuant to Section 2.03 of the
Pooling and Servicing Agreement, that the Trustee has received and holds in
trust thereunder the following (i) all right, title and interest in and to the
manufactured housing contracts identified on the List of Contracts [delivered
pursuant to Section 2.02(i) of the Pooling and Servicing Agreement] [delivered
with the Subsequent Transfer Instrument of even date herewith] (the
"Contracts"), including, without limitation, all right, title and interest in
and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than the principal and interest due on the
Contracts on or before the applicable Cut-off Date), (ii) all rights under every
Hazard Insurance Policy relating to a Manufactured Home securing a Contract for
the benefit of the creditor of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any FHA/VA Contract, (iv) the proceeds from the Errors
and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Manufactured Homes, (v) all
rights of the Seller under the Transfer Agreement, (vi) all documents contained
in the Contract Files and the Land-and-Home Contract Files, (vii) 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 Seller pursuant to Section 2.01(b) of the Pooling and
Servicing Agreement out of the proceeds of the sale of the Certificates, (viii)
amounts on deposit in the Capitalized Interest Account, the Pre-Funding Account
and the Staged-Funding Reserve Account, (ix) the Reserve Fund Contracts, and (x)
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, 2001.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
[Name]
[Title]
G-2
EXHIBIT H-1
FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
LAND-AND-HOME CONTRACT FILES
U.S. Bank Trust National Association, a national banking association
(the "Custodian") acting as Custodian under a Custodial Agreement (the
"Custodial Agreement") dated as of June 1, 2001, between the Custodian and U.S.
Bank National Association, as Trustee (the "Trustee") under the Pooling and
Servicing Agreement dated as of June 1, 2001 among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and the Trustee, pursuant to which the
Custodian holds on behalf of the Trustee certain "Land-and-Home Contract Files,"
as described in the Pooling and Servicing Agreement, hereby acknowledges receipt
of such Land-and-Home Contract Files, except as noted on the exception list
attached hereto. The Custodian further acknowledges that it will, within 90 days
of the date of the Custodial Agreement, conduct a review of the Land-and-Home
Contract Files and confirm to the Trustee and the Originator that each
Land-and-Home Contract File includes (a) an original executed copy of the
Land-and-Home Contract, (b) an original or a copy of the related Mortgage, (c)
an assignment of the Land-and-Home Contract and the related Mortgage from the
originator (if other than the Originator) to the Originator, (d) an endorsement
of the Land-and-Home Contract by the Originator to the Trustee or in blank, (e)
an assignment of the related Mortgage to the Trustee or in blank, and (f) any
extension, modification or waiver agreement(s), except as noted on the document
exception listing to be attached to such confirmation. The Custodian will not
otherwise review the Land-and-Home Contracts and Land-and-Home Contract Files
for compliance with the terms of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused
this acknowledgment to be executed by its duly authorized officer as of the
____ day of June, 2001.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By: ________________________________
[Name]
[Title]
H-1-1
EXHIBIT H-2
FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
CONTRACT FILES
U.S. Bank Trust National Association, a national banking association
(the "Custodian") acting as Custodian under a Custodial Agreement (the
"Custodial Agreement") dated as of June 1, 2001, between the Custodian and U.S.
Bank National Association, as Trustee (the "Trustee") under the Pooling and
Servicing Agreement dated as of June 1, 2001 among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and the Trustee, pursuant to which the
Custodian holds on behalf of the Trustee certain "Contract Files," as described
in the Pooling and Servicing Agreement, hereby acknowledges receipt of such
Contract Files, except as noted on the exception list attached hereto. The
Custodian further acknowledges that it will, within 90 days of the date of the
Custodial Agreement, conduct a review of the Contract Files and confirm to the
Trustee and the Originator that each Contract File includes (a) an original
executed copy of the Contract, (b) either: (i) the original title document for
the related Manufactured Home or a duplicate certified by the appropriate
governmental authority which issued the original thereof or the application for
such title document, or (ii) if the laws of the jurisdiction in which the
related Manufactured Home is located do not provide for the issuance of title
documents for manufactured housing, other evidence of ownership of the related
Manufactured Home which is customarily relied upon in such jurisdiction as
evidence of title to a manufactured housing unit, (c) evidence of one or more of
the following types of perfection of the security interest in the related
Manufactured Home granted by such Contract, as appropriate: (i) notation of such
security interest on the title document, (ii) a financing statement meeting the
requirements of the UCC, with evidence of recording indicated thereon, or (iii)
such other evidence of perfection of a security interest in a manufactured
housing unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located, (d) the assignment of the Contract from
the originator (if other than Conseco Finance Corp.) to the Originator, (e)
evidence of any other Collateral Security, including with respect to a
Land-in-Lieu Contract, the mortgage or deed of trust, and (f) any extension,
modification or waiver agreement(s), except as noted on the document exception
listing to be attached to such confirmation. The Custodian will not otherwise
review the Contracts and Contract Files for compliance with the terms of the
Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused
this acknowledgment to be executed by its duly authorized officer as of the ___
day of June, 2001.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By: ________________________________
[Name]
H-2-1
[Title]
H-2-2
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, 2001 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
The Monthly Report for the period from __________ to __________ attached to
this certificate is complete and accurate in accordance with the requirements of
Sections 6.01 and 6.02 of the Agreement; and
As of the date hereof, no Event of Termination or event that with notice or
lapse of time or both would become an Event of Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature the ___ day of
_________, ____.
CONSECO FINANCE CORP.
By: ______________________________
[Name]
[Title]
I-1
EXHIBIT J
FORM OF CLASS C [SUBSIDIARY]
----------------------------
[INTERMEDIATE] [MASTER] CERTIFICATE
-----------------------------------
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE [UNCERTIFICATED
SUBSIDIARY INTERESTS] [UNCERTIFICATED INTERMEDIATE INTERESTS] [REGULAR
CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.
Class C Subsidiary No.
[(Subordinate)] [(Intermediate)] [(Master)]
Cut-off Date: as defined in the Pooling
and Servicing Agreement dated as of Percentage Interest: 100%
June 1, 2001
First Remittance Date:
August 1, 2001
J-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
------------------------------------------------
PASS-THROUGH CERTIFICATES, SERIES 2001-2 CLASS C [SUBSIDIARY]
-------------------------------------------------------------
[INTERMEDIATE] [MASTER] (RESIDUAL INTEREST)
-------------------------------------------
Cut-off Date Pool Principal Balance: $500,000,000.00 (Approximate)
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the Residual Interest represented by this Certificate, and entitled to certain
distributions out of Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-2 (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,
2001, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Class C [Subsidiary] [Intermediate] [Master] Certificate is one of the
Class C [Subsidiary] [Intermediate] [Master] Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Class C [Subsidiary] [Intermediate] [Master] Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in August 2001, so long as the
Agreement has not been terminated, by check (or, if such Class C [Subsidiary]
[Intermediate] [Master] Certificateholder holds Class C [Subsidiary]
[Intermediate] [Master] Certificates with an aggregate Percentage Interest of at
least 20% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least ten days prior to such Remittance Date) to the registered
Class C [Subsidiary] [Intermediate] [Master] Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C [Subsidiary]
[Intermediate] [Master] Distribution Amount.
The Class C [Subsidiary] [Intermediate] [Master] Certificateholder, by its
acceptance of this Certificate, agrees that it will look solely to the funds in
the Certificate Account to the extent available for distribution to the Class C
[Subsidiary] [Intermediate] [Master] Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Class C [Subsidiary] [Intermediate] [Master]
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class C [Subsidiary] [Intermediate] [Master] Certificate does not
purport to summarize the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights,
J-2
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Class C Certificateholder free of charge upon a
written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C [Subsidiary] [Intermediate] [Master]
Certificate is registrable in the Certificate Register of the Certificate
Registrar upon surrender of this Class C [Subsidiary] [Intermediate] [Master]
Certificate for registration of transfer at the office or agency maintained by
the Trustee in St. ▇▇▇▇, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Class C [Subsidiary] [Intermediate]
[Master] Certificates evidencing the same aggregate amount of Class C
[Subsidiary] [Intermediate] [Master] Certificates will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, this Class C [Subsidiary] [Intermediate] [Master] Certificate is
exchangeable for new Class C [Subsidiary] [Intermediate] [Master] Certificates
of authorized denominations evidencing the same aggregate Percentage Interest as
requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C [Subsidiary] [Intermediate] [Master] Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Servicer, the Trustee, the Paying Agent, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The holder of this Class C [Subsidiary] [Intermediate] [Master]
Certificate, by acceptance hereof, agrees that, in accordance with the
requirements of Section 860D(b)(1) of the Code, the federal tax return of the
Trust for its first taxable year shall provide that the [Subsidiary]
[Intermediate] [Master] REMIC elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The [Uncertificated Subsidiary Interests]
[Uncertificated Intermediate Interests] [Regular Certificates] shall be "regular
interests" in the [Subsidiary] [Intermediate] [Master] REMIC and the Class C
[Subsidiary] [Intermediate] [Master] Certificates shall be the "residual
interest" in the [Subsidiary] [Intermediate] [Master] REMIC. In addition, the
holder of this Class C [Subsidiary] [Intermediate] [Master] Certificate, by
acceptance hereof, (i) agrees to file tax returns consistent with and in
accordance with any elections, decisions or other reports made or filed with
regard to federal, state or local taxes on behalf of the [Subsidiary]
[Intermediate] [Master] REMIC, and (ii) agrees to cooperate with the Originator
in connection with examinations of the [Subsidiary] [Intermediate] [Master]
REMIC's affairs by tax authorities, including administrative and judicial
proceedings, and (iii) makes the additional agreements, designations and
appointments, and undertakes the responsibilities, set forth in Section 6.06 of
the Agreement.
J-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-2 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 2001-2
By U.S. BANK NATIONAL ASSOCIATION
By _________________________________
Authorized Signatory
J-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate, and does hereby irrevocably
constitute and appoint ____________________ Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.
Dated: ____________________________
By ________________________
Signature
J-5
EXHIBIT K-1
FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
---------------------------------------------------
CONSECO FINANCE CORP.
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 3.06 of the Pooling and Servicing Agreement (the "Agreement"), dated as
of June 1, 2001 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
(1) The Contracts on the attached schedule are to be repurchased by
the Company on the date hereof pursuant to Section 3.06 of the Agreement.
(2) Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to Section 3.06 of the Agreement, be assigned by
the Trustee to the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
_______, ____.
CONSECO FINANCE CORP.
By: _____________________________
[Name]
[Title]
K-1-1
EXHIBIT K-2
FORM OF CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
---------------------------------------------------
CONSECO FINANCE CORP.
CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
The undersigned certify that they are [title] and [title], respectively of
Conseco Finance Corp., a corporation organized under the laws of Delaware ("the
Company"), and that as such they are duly authorized to execute and deliver this
certificate on behalf of the Company pursuant to Section 3.06(b) of the Pooling
and Servicing Agreement (the "Agreement"), dated as of June 1, 2001 among the
Company, Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further certify
that:
(1) The Contract and Contract File [or Land-and-Home Contract File,
as applicable] for each such Eligible Substitute Contract [are being held
by the Company, as Servicer] have been delivered to [the Trustee or its
Custodian] [_________, the successor Servicer].
(2) The Contracts on the attached schedule are to be substituted on
the date hereof pursuant to Section 3.06(b) of the Agreement and each such
Contract is an Eligible Substitute Contract [description how the Contracts
satisfy the definition of "Eligible Substitute Contract"].
(3) The UCC-1 financing statements in respect of the Contracts to
be substituted, in the form required by Section 3.06 (b)(iii) of the
Agreement, have been filed with the appropriate offices.
(4)(x) the Company shall have delivered to the Trustee, or its
Custodian, the related Land-and-Home Contract Files; and (y) the Company
has delivered to the Trustee an opinion of counsel satisfactory to the
Trustee to the effect that the Trustee holds a perfected first priority
lien in the real estate securing such Eligible Substitute Contracts, or
evidence of recordation of the assignment to the Trustee on behalf of the
Trust of each Mortgage securing such Eligible Contracts.
(5) There has been deposited in the Certificate Account the amounts
listed on the schedule attached hereto as the amount by which the Scheduled
Principal Balance of each Replaced Contract exceeds the Scheduled Principal
Balance of each Contract being substituted therefor.
K-2-1
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ___ day of
___________.
CONSECO FINANCE CORP.
By: _________________________________
[Name]
[Title]
K-2-2
EXHIBIT L
FORM OF REPRESENTATION LETTER
-----------------------------
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Conseco Finance Securitizations Corp.
300 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-2, 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 June 13, 2001 and related Prospectus Supplement dated June
13, 2001, with respect to the Certificates, and has been given such information
concerning the Certificates, the underlying installment sale contracts and
Conseco Finance Securitizations Corp. as it has requested.]
(4) The Purchaser is acquiring the Certificates as principal for
its own account (or for the account of one or more other institutional
investors for which it is acting as duly authorized fiduciary or agent) for
the purpose of investment and not with a view to or for sale in connection
with any distribution thereof, subject nevertheless to any requirement of
law that the disposition of the Purchaser's property shall at all times be
and remain within its control.
(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.
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-2
Executed at ____________________, __________, this _____ day of
_________________.
Purchaser's Name (Print)
By: ______________________________________
Signature
Its: _____________________________________
Address of Purchaser: ____________________
________________________
Purchaser's Taxpayer Identification Number
________________________
L-3
EXHIBIT M
FORM OF MONTHLY REPORT
----------------------
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-2
1. ____________
(a) Amount Available (including Monthly Servicing Fee)
_____________
(b) Class M-1 Interest Deficiency Amount (if any), Class M-2 Interest
Deficiency Amount(if any) and Class B-1 Interest Deficiency Amount (if
any) withdrawn for prior Remittance Date
_____________
(c) Amount Available after giving effect to withdrawal of Class M-1 Interest
Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1
Interest Deficiency Amount for prior Remittance Date
_____________
(d) Amount withdrawn from [Capitalized Interest] [Pre-Funding] [Reserve Fund]
[Staged-Funding Contract Reserve] Account
_____________
Interest
--------
Class A and Class A-IO Certificates
-----------------------------------
2. Aggregate Class A interest
(a) Interest accrued at Class A Remittance Rate the lesser of (i) 6.60%,
plus 0.50% if the Pool Scheduled Principal Balance is equal to or
less than 10% of the Cut-off Date Pool Principal Balance and (ii) the
Adjusted Weighted Average Contract Rate
_____________
(b) Class A Interest paid
_____________
(c) Interest accrued at Class A-IO Remittance Rate (2.50%)
_____________
(d) Class A-IO Interest paid
_____________
(e) Class A Interest Shortfall
_____________
3. Amount applied to Unpaid Class A/Class/Class A-IO Interest Shortfall
_____________
(a) Class A
_____________
(b) Class A-IO
_____________
4. Remaining Unpaid Class A Interest Shortfall
_____________
M-1
_____________
Class M-1 Certificates
----------------------
5. Class M-1 Interest on Class M-1 Adjusted Principal Balance
(a) Class M-1 Adjusted Principal Balance
_____________
(b) Interest accrued at Class M-1 Remittance Rate (7.69%, unless the Adjusted
Weighted Average Contract Rate is less than 7.69%)
_____________
(c) Interest paid on Class M-1 Adjusted Principal Balance
_____________
(d) Class M-1 Interest Shortfall
_____________
6. Amount applied to Unpaid Class M-1 Interest Shortfall
_____________
7. Remaining Unpaid Class M-1 Interest Shortfall
Class M-2 Certificates
----------------------
8. Class M-2 Interest on Class M-2 Adjusted Principal Balance
_____________
(a) Class M-2 Adjusted Principal Balance
_____________
(b) Interest accrued at Class M-2 Remittance Rate (8.13%, unless the Adjusted
Weighted Average Contract Rate is less than 8.13%)
_____________
(c) Interest paid on Class M-2 Adjusted Principal Balance
_____________
(d) Class M-2 Interest Shortfall
_____________
9. Amount applied to Unpaid Class M-2 Interest Shortfall
_____________
10. Remaining Unpaid Class M-2 Interest Shortfall
_____________
Class B-1 Certificates
----------------------
11. Class B-1 interest on Class B-1 Adjusted Principal Balance
_____________
(a) Class B-1 Adjusted Principal Balance
_____________
(b) Interest accrued at Class B-1 Remittance Rate (9.44%, unless the Adjusted
Weighted Average Contract Rate is less than 9.44%)
_____________
(c) Interest paid on Class B-1 Adjusted Principal Balance
_____________
(d) Class B-1 Interest Shortfall
_____________
12. Amount applied to Unpaid Class B-1 Interest Shortfall
_____________
13. Remaining Unpaid Class B-1 Interest Shortfall
_____________
Principal
---------
M-2
14. Formula Principal Distribution Amount:
_____________
(a) Scheduled principal
_____________
(b) Principal Prepayments
_____________
(c) Liquidated Contracts
_____________
(d) Repurchases
_____________
(e) Plus principal received during the first 10 days of the next Due Period
_____________
(f) Minus principal received during the first 10 days of the prior Due Period
_____________
(g) Pre-Funded Amount/Unfunded Contract Shortfall]
_____________
15. Pool Scheduled Principal Balance
_____________
16. Overcollateralization Amount (before principal distributions)
_____________
17. Additional Principal Distribution Amount
_____________
Class A Certificates
--------------------
18. Unpaid Class A Principal Shortfall (if any) following prior Remittance Date
_____________
19. Class A Percentage for such Remittance Date
_____________
20. Class A Percentage for the following Remittance Date
_____________
21. Class A principal distribution (including Class A Percentage of Formula Principal
Distribution Amount, Unpaid Class A Principal Shortfall and any Additional
Principal Distribution Amount paid)
_____________
(a) Class A
_____________
22. Remaining Class A Principal Balance/Class A-IO Notional Principal Amount
_____________
(a) Class A Principal Balance
_____________
(b) Class A-IO Notional Principal Amount
_____________
23. Unpaid Class A Principal Shortfall (if any) following current Remittance Date
_____________
(a) Class A
_____________
M-3
_____________
Class M-1 Distribution Test, Class M-2 Distribution Test and Class B-1 Distribution Test
(calculations applicable on and after the Remittance Date occurring in August 2005)
24. Average Sixty-Day Delinquency Ratio Test
_____________
(a) Sixty-Day Delinquency Ratio for current Remittance Date
_____________
(b) Average Sixty-Day Delinquency Ratio (arithmetic average of ratios for this
month and two preceding months; may not exceed 6.25%)
_____________
25. Cumulative Realized Losses Test
Cumulative Realized Losses for current Remittance Date (as a percentage of Cut_off
Date
Pool Principal Balance; may not exceed 7.00% from August 1, 2005 to July 31, 2006;
8.75% from August 1, 2007 to July 31, 2006; 11.75% from August 1, 2008 to July 31,
2007; and 13.25% thereafter)
_____________
26. Current Realized Losses Test
_____________
(a) Current Realized Losses for current Remittance Date
_____________
(b) Current Realized Loss Ratio (total Realized Losses for most recent three
months, multiplied by 4, divided by arithmetic average of Pool Scheduled
Principal Balances for third preceding Remittance Date and for current
Remittance Date; may not exceed 3.50%)
_____________
27. Class M-1 Principal Balance Test
Sum of Class M-1 Principal Balance, Class M-2 Principal Balance, Class B Principal
Balance and the Over-collateralization Amount before distributions on current
Remittance Date divided by Pool Scheduled Principal Balance as of preceding
Remittance Date (must be equal to or greater than 32.250%).
_____________
28. Class M-2 Principal Balance Test
Sum of Class M-2 Principal Balance, Class B Principal Balance and the Over-
collateralization Amount (before distributions on current Remittance Date) divided
by Pool Scheduled Principal Balance as of preceding Remittance Date (must be equal
to or greater than 22.875%).
29. Class B Principal Balance Test
_____________
M-4
_____________
(a) The Class B Principal Balance (before any distributions on current Remittance
Date) as of such Remittance Date (must be greater than $10,000,000)
_____________
(b) Sum of Class B Principal Balance and the Overcollateralization Amount (before
distributions on current Remittance Date) divided by Pool Scheduled Principal
Balance as of preceding Remittance Date (must be equal to or greater than
15.150%).
_____________
Class M-1 Certificates
----------------------
30. Class M-1 Percentage for such Remittance Date
_____________
31. Class M-1 Percentage for the following Remittance Date
_____________
32. Class M-1 principal distribution:
(a) Current (Class M-1 Percentage of Formula Principal Distribution Amount)
_____________
(b) Unpaid Class M-1 Principal Shortfall
_____________
(c) Additional Principal Distribution Amount
_____________
33. Unpaid Class M-1 Principal Shortfall (if any) following current Remittance Date
_____________
34. Class M-1 Liquidation Loss Interest
_____________
(a) Class M-1 Liquidation Loss Amount
_____________
(b) Amount applied to Class M-1 Liquidation Loss Interest Amount
_____________
(c) Remaining Class M-1 Liquidation Loss Interest Amount
_____________
(d) Amount applied to Unpaid Class M-1Loss Interest Shortfall
_____________
(e) Remaining Unpaid Class M-1 Liquidation Loss Interest Shortfalls
_____________
Class M-2 Certificates
----------------------
35. Class M-2 Percentage for such Remittance Date
_____________
36. Class M-2 Percentage for the following Remittance Date
_____________
37. Class M-2 principal distribution
_____________
(a) Current (Class M-2 Percentage of Formula Principal Distribution Amount)
_____________
(b) Unpaid Class M-2 Principal Shortfall
_____________
M-5
(c) Additional Principal Distribution Amount
_____________
38. Unpaid Class M-2 Principal Shortfall (if any) following current
Remittance Date
_____________
39. Class M-2 Liquidation Loss Interest
_____________
(a) Class M-2 Liquidation Loss Amount
_____________
(b) Amount applied to Class M-2 Liquidation Loss Interest Amount
_____________
(c) Remaining Class M-2 Liquidation Loss Interest Amount
(d) Amount applied to Unpaid Class M-2 Loss Interest Shortfall
_____________
(e) Remaining Unpaid Class M-2 Liquidation Loss Interest Shortfalls
_____________
Class B Certificates
--------------------
40.
_____________
(a) Class B Percentage for such Remittance Date
_____________
(b) Class B Percentage for the following Remittance Date
_____________
41. Class B-1 principal distribution
_____________
(a) Current (Class B Percentage of Formula Principal Distribution Amount)
_____________
(b) Unpaid Class B-1 Principal Shortfall
_____________
(c) Additional Principal Distribution Amount
_____________
42. Unpaid Class B-1 Principal Shortfall
_____________
43. Class B-1 Principal Balance
_____________
44. Class B-1 Liquidation Loss Interest
_____________
(a) Class B-1 Liquidation Loss Amount
_____________
(b) Amount applied to Class B-1 Liquidation Loss Interest Amount
_____________
(c) Remaining Class B-1 Liquidation Loss Interest Amount
_____________
(d) Amount applied to Unpaid Class B-1 Liquidation Loss Interest Shortfall
_____________
(e) Remaining Unpaid Class B-1 Liquidation Loss Interest Shortfall
_____________
Class B-2 Certificates
----------------------
M-6
45. Remaining Amount Available
_____________
Interest
--------
46. Interest accrued at Class B-2 Remittance Rate (10.15%, unless the Adjusted Weighted
Average Contract Rate is less than 10.15%)
_____________
47. Class B-2 Interest paid
_____________
48. Current interest
_____________
49. Amount applied to Unpaid Class B-2 Interest Shortfall
_____________
50. Remaining Unpaid Class B-2 Interest Shortfall
_____________
Principal
---------
51. Unpaid Class B-2 Principal Shortfall (if any) following prior Remittance Date
_____________
52. Class B-2 Liquidation Loss Amount
_____________
53. Current principal (zero until Class B-1 paid down; thereafter, Class B Percentage of
Formula Principal Distribution Amount)
_____________
54. Additional Principal Distribution Amount
_____________
55. Class B-2 Principal Balance
_____________
Class B-3I Certificates
-----------------------
56.
_____________
(a) B-3I Remittance Rate (The excess of (a) the Adjusted Weighted Average Contract
Rate over (b) the product of (i) two and (ii) the weighted average Remittance
Rate of the Class I-Accrual Interest and the Intermediate REMIC Accretion
Directed Interests, provided that for this purpose the Remittance Rate for the
Class I-Accrual Interest shall not exceed zero and the Remittance Rate for
each Intermediate REMIC Accretion Directed Interest shall not exceed the
Remittance Rate on its Corresponding Certificate Class. Each Intermediate
REMIC Accretion Directed Interest has principal balance equal to 1/2 that of its
Corresponding Certificate Class. Principal balance of Class I-Accrual Interest
equals 1/2 sum of Pool Scheduled Principal Balance, Pre-Funded Amount and
Overcollateralization Amount as of preceding Remittance Date after giving
effect to distributions on that date.)
_____________
M-7
(b) Class B-3I Notional Amount (Pool Scheduled Principal Balance plus Pre-Funded
Amount as of preceding Remittance Date)
_____________
(c) Payment under Section 8.03(a)(xiii)
_____________
(d) Pool Scheduled Principal Balance (on Remittance Date on which aggregate Class
Principal Balance of Certificates is reduced to 0)
_____________
(e) Class B-3I Distribution Amount (line (a) times line (b), less line (c), plus
line (d)), plus any Shortfall on prior Remittance Date
_____________
(f) Distribution to Class B-3I Certificates
_____________
(g) Shortfall (line (e) less line (f))
_____________
Class A, Class M and Class B Certificates
-----------------------------------------
57. Aggregate Scheduled Principal Balance of delinquent Contracts as of Determination
Date
_____________
(a) 30 - 59 days
_____________
(b) 60 days or more
_____________
58. Manufactured Homes repossessed
_____________
59. Manufactured Homes repossessed but remaining in inventory
_____________
60. Repossessed Manufactured Homes purchased by Originator or Subsidiary
_____________
(a) number of Contracts
current month
cumulative
_____________
(b) Scheduled Principal Balance
_____________
current month
_____________
cumulative
_____________
(c) Purchase Price
_____________
current month
_____________
cumulative
_____________
61. Weighted Average Contract Rate of all outstanding Contracts
_____________
Class M and Class B Certificates
-------------------------------- _____________
62. Adjusted Weighted Average Contract Rate
_____________
M-8
Please contact Bondholder Services Department of U.S. Bank National
Association, 1-800-934-6802 with any questions regarding this Statement or your
Distribution.
M-9
EXHIBIT N
FORM OF ADDITION NOTICE
-----------------------
______________, 2001
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
June 1, 2001, among Conseco Finance Corp. (the "Company"),
Conseco Finance Securitizations Corp. (the "Seller") and U.S.
Bank National Association as Trustee (the "Trustee") relating to
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-2
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, 2001, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the "Seller") and U.S.
Bank National Association as Trustee (the "Trustee"), the Seller does hereby
transfer, assign, set over and otherwise convey, without recourse, to
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust
2001-2, 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 _________, 2001.
CONSECO FINANCE SECURITIZATIONS
CORP.
By _______________________________
Name:
Title:
O-1
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Company in connection with the Pooling and Servicing Agreement dated as of
June 1, 2001 (the "Agreement") among the Company, Conseco Finance Corp. and U.S.
Bank National Association as Trustee. All capitalized terms used herein without
definition have the respective meanings specified in the Agreement. The
undersigned further certifies that:
This Certificate is delivered in connection with the sale to the Trust
on __________________ (the "Subsequent Transfer Date") of Contracts (the
"Subsequent Contracts") identified in the List of Contracts attached to the
Subsequent Transfer Instrument of even date herewith.
As of the Subsequent Transfer Date, all representations and warranties
in Section 3.01 of the Agreement are true and correct and all representations
and warranties in Section 3.03 of the Agreement with respect to the Subsequent
Contracts are true to the best of [her][his] knowledge.
All conditions precedent to the sale of the Subsequent Contracts to the
Trust under Section 2.03 of the Agreement have been satisfied.
As of the Subsequent Transfer Date, the Company is not insolvent and
will not be made insolvent by the transfer of the Subsequent Contracts, and the
undersigned is not aware of any pending insolvency of the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of _________, 2001.
By _________________________________
Name:
Title:
P-1
EXHIBIT Q
RESERVE FUND CONTRACTS
Q-1