EXHIBIT 4.1
VANDERBILT MORTGAGE AND FINANCE, INC.,
AS SELLER AND SERVICER,
▇▇▇▇▇▇▇ HOMES, INC.,
AS PROVIDER OF THE LIMITED GUARANTEE
and
JPMORGAN CHASE BANK, AS TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of July 25, 2002
Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates
Series 2002-B
Table of Contents
Page
Article I
DEFINITIONS
Section 1.01. Definitions...................................................................1
Section 1.02. Determination of Scheduled Payments..........................................31
Article II
CONVEYANCE OF CONTRACTS; TRUST FUND; PERFECTION OF SECURITY INTEREST; CUSTODY OF CONTRACTS
Section 2.01. Conveyance of Contracts and Other Rights.....................................32
Section 2.02. Filing; Name Change or Relocation............................................33
Section 2.03. Acceptance by Trustee........................................................34
Section 2.04. Delivery of Land-and-Home Contract Files and Mortgage Loan Files and
Recordation..................................................................35
Section 2.05. REMIC Election; Designation of Regular and Residual Interests; Tax Year......36
Section 2.06. Designation of Startup Day...................................................36
Section 2.07. REMIC Certificate Maturity Date..............................................36
Article III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties Regarding Vanderbilt..........................37
Section 3.02. Representations and Warranties Regarding Each Contract.......................37
Section 3.03. Representations and Warranties Regarding the Contracts in the Aggregate......40
Section 3.04. Representations and Warranties Regarding the Contract Files, the
Land-and-Home Contract Files and the Mortgage Loan Files.....................41
Section 3.05. Repurchases of Contracts or Substitution of Contracts for Breach of
Representations and Warranties...............................................42
Article IV
THE CERTIFICATES
Section 4.01. The Certificates.............................................................46
Section 4.02. Registration of Transfer and Exchange of Certificates........................47
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificate.............................50
Section 4.04. Persons Deemed Owners........................................................50
Section 4.05. Appointment of Paying Agent..................................................50
Section 4.06. Access to List of Certificateholders' Names and Addresses....................51
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Section 4.07. Authenticating Agents........................................................51
Section 4.08. Class R Certificate..........................................................51
Article V
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 5.01. Responsibility for Contract Administration and Servicing.....................56
Section 5.02. Standard of Care.............................................................56
Section 5.03. Records......................................................................56
Section 5.04. Inspection...................................................................56
Section 5.05. Establishment of and Deposits in the Certificate Account.....................57
Section 5.06. Payment of Taxes.............................................................58
Section 5.07. Enforcement..................................................................58
Section 5.08. Transfer of the Certificate Account..........................................59
Section 5.09. Maintenance of Hazard Insurance Policies.....................................59
Section 5.10. Fidelity Bond and Errors and Omissions Insurance.............................60
Section 5.11. Collections under Hazard Insurance Policies; Consent to Transfers of
Manufactured Homes; Assumption Agreements....................................60
Section 5.12. Realization upon Defaulted Contracts.........................................61
Section 5.13. Costs and Expenses...........................................................62
Section 5.14. Trustee to Cooperate.........................................................62
Section 5.15. Servicing and Other Compensation.............................................63
Section 5.16. Custody of Contracts.........................................................63
Section 5.17. REMIC Compliance.............................................................64
Section 5.18. Establishment of and Deposits in the Distribution Account....................66
Section 5.19. Pre-Funding Account..........................................................67
Section 5.20. Conveyance of the Subsequent Contracts.......................................68
Article VI
PAYMENTS TO THE CERTIFICATEHOLDERS; WITHDRAWALS FROM CERTIFICATE ACCOUNT
Section 6.01. Monthly Payments.............................................................72
Section 6.02. Permitted Withdrawals from the Certificate Account...........................77
Section 6.03. [Reserved]...................................................................78
Section 6.04. Monthly Advances by the Servicer.............................................78
Section 6.05. Limited Guarantee............................................................78
Section 6.06. Alternate Credit Enhancement.................................................79
Section 6.07. Calculation of the Remittance Rates with respect to the Floating Rate
Certificates.................................................................79
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Article VII
REPORTS
Section 7.01. Monthly Reports..............................................................80
Section 7.02. Certificate of Servicing Officer.............................................82
Section 7.03. Other Data and Direction of the Trustee......................................82
Section 7.04. Annual Statement as to Compliance............................................82
Section 7.05. Annual Independent Public Accountants' Servicing Report......................82
Section 7.06. Statements to Certificateholders.............................................83
Article VIII
INDEMNITIES; VANDERBILT AND THE SERVICER
Section 8.01. Liabilities to Obligors......................................................86
Section 8.02. Tax Indemnification..........................................................86
Section 8.03. Servicer's Indemnities.......................................................86
Section 8.04. Operation of Indemnities.....................................................86
Section 8.05. Merger or Consolidation of Vanderbilt or the Servicer........................87
Section 8.06. Limitation on Liability of the Servicer and Others...........................87
Section 8.07. Assignment by Servicer.......................................................87
Section 8.08. Successor to the Servicer....................................................88
Article IX
DEFAULT
Section 9.01. Events of Default............................................................90
Section 9.02. Waiver of Defaults...........................................................91
Section 9.03. Trustee to Act; Appointment of Successor.....................................91
Section 9.04. Notification to Certificateholders...........................................91
Section 9.05. Effect of Transfer...........................................................91
Section 9.06. Transfer of the Accounts.....................................................92
Article X
CONCERNING THE TRUSTEE
Section 10.01. Duties of Trustee...........................................................93
Section 10.02. Certain Matters Affecting the Trustee.......................................94
Section 10.03. Trustee Not Liable for Certificates or Contracts............................95
Section 10.04. Trustee May Own Certificates................................................96
Section 10.05. Servicer to Pay Fees and Expenses of Trustee................................96
Section 10.06. Eligibility Requirements for Trustee........................................96
Section 10.07. Resignation and Removal of the Trustee......................................97
Section 10.08. Successor Trustee...........................................................98
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Section 10.09. Merger or Consolidation of Trustee..........................................98
Section 10.10. Appointment of Co-Trustee or Separate Trustee...............................98
Section 10.11. Appointment of Office or Agency.............................................99
Section 10.12. Trustee May Enforce Claims Without Possession of Certificates...............99
Section 10.13. Suits for Enforcement......................................................100
Section 10.14. Rights of Paying Agent and Certificate Register............................100
Article XI
TERMINATION
Section 11.01. Termination................................................................101
Article XII
MISCELLANEOUS PROVISIONS
Section 12.01. Severability of Provisions.................................................104
Section 12.02. Limitation on Rights of Certificateholders.................................104
Section 12.03. Acts of Certificateholders.................................................104
Section 12.04. [Reserved].................................................................105
Section 12.05. Amendment..................................................................105
Section 12.06. Recordation of Agreement...................................................107
Section 12.07. Contribution of Assets.....................................................107
Section 12.08. Duration of Agreement......................................................107
Section 12.09. Governing Law..............................................................107
Section 12.10. Notices....................................................................107
Section 12.11. Merger and Integration of Documents........................................107
Section 12.12. Headings...................................................................108
Section 12.13. Counterparts...............................................................108
TESTIMONIUM
EXHIBIT A-1 - Contract Schedule
EXHIBIT A-2 - Form of Custodial Agreement
EXHIBIT B-1 - Form of Face of Class A Certificate
EXHIBIT B-2 - Form of Face of Class M-1 Certificate
EXHIBIT C - Form of Face of Class B Certificate
EXHIBIT D - Form of Face of Class R Certificate
EXHIBIT E - Form of Reverse of Certificates
EXHIBIT F - Form of Certificate Regarding Substitution of Eligible Substitute
Contracts
EXHIBIT G - Form of Certificate of Servicing Officer Regarding Monthly Report
EXHIBIT H - Form of Transfer Affidavit
EXHIBIT I - Form of Investment Letter
EXHIBIT J - List of Sellers and Originators of Acquired Contracts
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EXHIBIT K - Form of Power of Attorney
EXHIBIT L - Form of Limited Power of Attorney
EXHIBIT M - Form of Subsequent Transfer Agreement
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AGREEMENT, dated as of July 25, 2002, among Vanderbilt Mortgage and
Finance, Inc., a corporation organized and existing under the laws of the
State of Tennessee, as Seller and Servicer ("Vanderbilt"), ▇▇▇▇▇▇▇ Homes,
Inc., a corporation organized and existing under the laws of the State of
Delaware, as provider of the Limited Guarantee ("▇▇▇▇▇▇▇"), and JPMorgan Chase
Bank, a New York banking corporation, not in its individual capacity but
solely as Trustee (the "Trustee").
WHEREAS, in the regular course of its business, Vanderbilt originates,
purchases and services manufactured housing installment sales contracts,
installment loan agreements and mortgage loans, which provide for installment
payments by or on behalf of the owner of the manufactured home and grant a
security interest in the related manufactured home (and in addition, in
certain cases, mortgages or deeds of trust on the real estate on which such
manufactured home is located);
WHEREAS, Vanderbilt and the Trustee wish to set forth the terms and
conditions pursuant to which the "Trust Fund," as hereinafter defined, will
acquire the "Contracts" as hereinafter defined, and Vanderbilt will manage and
service the Contracts;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and the Trustee agree as
provided herein:
Article I
DEFINITIONS
Section 1.01. Definitions. Whenever used herein, unless the context
otherwise requires, the following words and phrases shall have the following
meanings:
ACQUIRED CONTRACTS: 5,233 Initial Contracts having an aggregate principal
balance as of the Cut-off Date of approximately $203,678,095.42, which
Vanderbilt purchased from the sellers listed on Exhibit J, all of which
Initial Contracts were originated by the Originators listed in Exhibit J
hereto.
ACTUARIAL CONTRACT: Any Contract pursuant to which the portion of any
scheduled payment allocable to interest is calculated on the basis that each
monthly payment is applied on its Due Date, regardless of when it is actually
made.
ADJUSTABLE RATE CONTRACT: Each Contract sold to the Trust which bears
interest at a variable rate.
AFFILIATE: As to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "controls," when used with respect to any
specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.
AGGREGATE INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of the Class A-1 Interest Formula
Distribution Amount, Class A-2 Interest Formula Distribution Amount, Class A-3
Interest Formula Distribution Amount, Class A-4 Interest Formula Distribution
Amount, Class A-5 Interest Formula Distribution Amount, Class M-1 Interest
Formula Distribution Amount, Class B-1 Interest Formula Distribution Amount
and Class B-2 Interest Formula Distribution Amount.
AGGREGATE NET LIQUIDATION LOSSES: With respect to the time of reference
thereto, the aggregate of the amounts by which (i) the outstanding principal
balance of each Contract that, during such time of reference, had become a
Liquidated Contract, plus accrued and unpaid interest thereon to the Due Date
for such Contract in the Due Period in which such Contract became a Liquidated
Contract, exceeds (ii) the Net Liquidation Proceeds for such Contract.
AGREEMENT: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
AMORTIZATION SCHEDULE: With respect to any Contract, the amortization
schedule for such Contract at the time of reference thereto after adjustments
for previous Partial Prepayments but without giving effect to any adjustments
by reason of the bankruptcy of the Obligor or any similar proceeding or
moratorium or any waiver, extension or grace period.
ANNUAL PERCENTAGE RATE OR APR: As to any Contract and any time, the per
annum rate of interest then being borne by such Contract, as set forth on the
face thereof.
APPLICANTS: As defined in Section 4.06.
APPRAISED VALUE: With respect to any Manufactured Home, the value of such
Manufactured Home as determined by a professional appraiser or an employee of
the Servicer who, as part of such employment, regularly appraises manufactured
housing units.
AUTHENTICATING AGENT: An authenticating agent appointed pursuant to
Section 4.07.
AVAILABLE DISTRIBUTION AMOUNT: As to any Remittance Date, (a) the sum of
(i) the amount on deposit in the Certificate Account as of the end of the Due
Period ending immediately prior to such Remittance Date, (ii) any deposit to
the Certificate Account for such Remittance Date from the Pre-Funding Account
and (iii) the Monthly Advance with respect to the Contracts made in respect of
such Remittance Date, reduced by (b) the sum of (i) scheduled payments
deposited therein of principal and interest for Contracts due after such Due
Period and (ii) amounts permitted to be withdrawn by the Servicer from the
Certificate Account pursuant to clauses (i) through (v), inclusive, and (vii)
of Section 6.02 and (iii) all Interest Deficiency Withdrawals, if any, made by
the Servicer with respect to the preceding Remittance Date pursuant to Section
6.02(ix).
AVAILABLE FUNDS SHORTFALL: As to any Remittance Date, the amount, if any,
by which the Available Distribution Amount is less than the amount required to
be distributed on
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the Certificates on such Remittance Date pursuant to clauses A(i) through (x)
or clauses B(i) through (x), as applicable, of Section 6.01(a).
AVERAGE SIXTY-DAY DELINQUENCY RATIO: As to any Remittance Date, the
arithmetic average of the Sixty-Day Delinquency Ratios for such Remittance
Date and the two preceding Remittance Dates. The "Sixty-Day Delinquency Ratio"
for a Remittance Date is the percentage derived from the fraction, the
numerator of which is the aggregate of the outstanding principal balances (as
of the end of the preceding Due Period) of all Contracts (including Contracts
in respect of which the related Manufactured Home has been repossessed but not
yet disposed of) as to which a scheduled monthly payment thereon (without
giving effect to any adjustments thereto by reason of a bankruptcy or similar
proceeding of the Obligor or any extension or modification granted to such
Obligor) is delinquent 60 days or more as of the end of the related Due Period
and the denominator of which is the Pool Scheduled Principal Balance for such
Remittance Date.
BI-WEEKLY CONTRACT: Any Contract pursuant to which the scheduled level
payment of interest and principal is due every 14 days.
BOOK-ENTRY CERTIFICATE: Any Certificate registered in the name of the
Depository or its nominee ownership of which is reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the
rules of such Depository).
BUSINESS DAY: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to be closed.
BUY-DOWN LOAN: A Contract on which the obligor has paid a fee at the time
of origination to reduce the periodic interest rate.
CERTIFICATE: A Certificate for Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 2002-B, executed,
countersigned and delivered by the Trustee substantially in the form of
Exhibits ▇-▇, ▇-▇, C or D and E.
CERTIFICATES: The Class A-1F Certificates, Class A-1V Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class M-1 Certificates, Class B-1 Certificates and Class B-2
Certificates.
CERTIFICATE ACCOUNT: The custodial account or accounts created and
maintained pursuant to Section 5.05.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes
of giving any consent, waiver, request or demand pursuant to this Agreement,
any Certificate registered in the name of Vanderbilt, the Servicer or any
Person actually known to a Responsible Officer of the Trustee to be an
Affiliate of the Servicer and any Certificate to the extent that, to the
actual knowledge of a Responsible Officer of the Trustee, the Servicer or any
Affiliate of the Servicer is the Certificate Owner shall be deemed not to be
outstanding and the Percentage Interest or Fractional Interest,
3
as the case may be, evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests or Fractional
Interests necessary to effect any such consent, waiver, request or demand has
been obtained, unless, in the case of the Senior Certificates, all such
Certificates are held by such Persons or, in the case of the Subordinate
Certificates, all such Certificates and all Senior Certificates are held by
such Persons, or such Certificates have been fully paid.
CERTIFICATE OWNER: With respect to a Certificate, the Person who is the
beneficial owner of a Book-Entry Certificate.
CERTIFICATE REGISTER: The register maintained pursuant to Section 4.02.
CERTIFICATE REGISTRAR: The Trustee, or the agent appointed pursuant to
Section 4.02(a).
CLASS: Pertaining to Class A-1F Certificates, Class A-1V Certificates,
Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class
A-5 Certificates, Class M-1 Certificates, Class B-1 Certificates or Class B-2
Certificates, as the case may be.
CLASS A CERTIFICATE: Any one of the Class A-1F Certificates, Class A-1V
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates and Class A-5 Certificates.
CLASS A DISTRIBUTION AMOUNT: As to any Remittance Date, the sum of the
Class A-1F Distribution Amount, the Class A-1V Distribution Amount, the Class
A-2 Distribution Amount, the Class A-3 Distribution Amount, the Class A-4
Distribution Amount and the Class A-5 Distribution Amount.
CLASS A PERCENTAGE: As to any Remittance Date, the percentage derived
from the fraction (which shall not be greater than 1) whose numerator is the
Class A Principal Balance immediately prior to such Remittance Date and whose
denominator is the Pool Scheduled Principal Balance immediately prior to such
Remittance Date.
CLASS A PRINCIPAL BALANCE: As to any Remittance Date, the sum of the
Class A-1F Principal Balance, Class A-1V Principal Balance, Class A-2
Principal Balance, Class A-3 Principal Balance, Class A-4 Principal Balance
and Class A-5 Principal Balance (before giving effect to distributions on the
Certificates on such Remittance Date).
CLASS A-1 CERTIFICATES: The Class A-1F Certificates and the Class A-1V
Certificates.
CLASS A-1 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class A-1F Remittance Rate on the Class A-1F Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date), (b) interest accrued during the related Interest
Period at the Class A-1V Remittance Rate on the Class A-1V Principal Balance
as of such Remittance Date (before giving effect to the distribution on such
4
Remittance Date), (c) any Class A-1F Unpaid Interest Shortfall and (d) any
Class A-1V Unpaid Interest Shortfall.
CLASS A-1 PRINCIPAL BALANCE: At any time, the sum of the Class A-1F
Principal Balance and the Class A-1V Principal Balance.
CLASS A-1F CERTIFICATE: Any one of the Certificates designated Class
A-1F, executed and countersigned as provided herein, substantially in the form
set forth in Exhibits B-1 and E hereto.
CLASS A-1F DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class A-1F Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS A-1F INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class A-1F
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class A-1 Interest Formula Distribution
Amount."
CLASS A-1F PRINCIPAL BALANCE: At any time, the Original Class A-1F
Principal Balance minus the sum of all amounts previously distributed on the
Class A-1F Certificates since the Closing Date pursuant to clauses A(ii) and
B(ii) of Section 6.01(a).
CLASS A-1F REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
2.53% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS A-1F UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class A-1F Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class A-1F Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-1F Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (c) of the
definition of "Class A-1 Interest Formula Distribution Amount" were actually
distributed on the Class A-1F Certificates on any particular Remittance Date,
the distribution of interest on the Class A-1F Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (a) of such definition and then to any Class A-1F Unpaid
Interest Shortfall pursuant to clause (c) of such definition.
CLASS A-1V CERTIFICATE: Any one of the Certificates designated Class
A-1V, executed and countersigned as provided herein, substantially in the form
set forth in Exhibits B-1 and E hereto.
CLASS A-1V DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class A-1V Certificates on such Remittance Date
pursuant to Section 6.01.
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CLASS A-1V INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class A-1V
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (b) of the definition of "Class A-1 Interest Formula Distribution
Amount."
CLASS A-1V REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
the sum of (a) LIBOR as of the second LIBOR Business Day prior to the first
day of the related Interest Period (or as of the second LIBOR Business Day
prior to the Closing Date in the case of the first Interest Period) per annum
and (b) 0.25% (twenty-five basis points) per annum and (ii) the Weighted
Average Net Contract Rate for such Remittance Date.
CLASS A-1V PRINCIPAL BALANCE: At any time, the Original Class A-1V
Principal Balance minus the sum of all amounts previously distributed on the
Class A-1V Certificates since the Closing Date pursuant to clauses A(ii) and
B(ii) of Section 6.01(a).
CLASS A-1V UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class A-1V Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class A-1V Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-1V Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (c) of the
definition of "Class A-1 Interest Formula Distribution Amount" were actually
distributed on the Class A-1V Certificates on any particular Remittance Date,
the distribution of interest on the Class A-1V Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (b) of such definition and then to any Class A-1V Unpaid
Interest Shortfall pursuant to clause (d) of such definition.
CLASS A-2 CERTIFICATE: Any one of the Certificates designated Class A-2,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits B-1 and E hereto.
CLASS A-2 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class A-2 Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS A-2 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class A-2 Remittance Rate on the Class A-2 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class A-2 Unpaid Interest Shortfall.
CLASS A-2 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class A-2
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class A-2 Interest Formula Distribution
Amount."
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CLASS A-2 PRINCIPAL BALANCE: At any time, the Original Class A-2
Principal Balance minus the sum of all amounts previously distributed on the
Class A-2 Certificates since the Closing Date pursuant to clauses A(ii) and
B(ii) of Section 6.01(a).
CLASS A-2 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
3.88% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS A-2 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class A-2 Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class A-2 Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-2 Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (b) of the
definition of "Class A-2 Interest Formula Distribution Amount" were actually
distributed on the Class A-2 Certificates on any particular Remittance Date,
the distribution of interest on the Class A-2 Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (a) of such definition and then to any Class A-2 Unpaid
Interest Shortfall pursuant to clause (b) of such definition.
CLASS A-3 CERTIFICATE: Any one of the Certificates designated Class A-3,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits B-1 and E hereto.
CLASS A-3 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class A-3 Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS A-3 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class A-3 Remittance Rate on the Class A-3 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class A-3 Unpaid Interest Shortfall.
CLASS A-3 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class A-3
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class A-3 Interest Formula Distribution
Amount."
CLASS A-3 PRINCIPAL BALANCE: At any time, the Original Class A-3
Principal Balance minus the sum of all amounts previously distributed on the
Class A-3 Certificates since the Closing Date pursuant to clauses A(ii) and
B(ii) of Section 6.01(a).
CLASS A-3 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
4.70% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS A-3 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class A-3 Interest Shortfalls
for prior Remittance
7
Dates exceeds the aggregate of the amounts distributed on the Class A-3
Certificates on prior Remittance Dates in respect of such Interest Shortfalls,
plus accrued interest (to the extent payment thereof is legally permissible)
at the Class A-3 Remittance Rate on the amount thereof from such prior
Remittance Date to such current Remittance Date. For purposes of determining
whether amounts distributable pursuant to clause (b) of the definition of
"Class A-3 Interest Formula Distribution Amount" were actually distributed on
the Class A-3 Certificates on any particular Remittance Date, the distribution
of interest on the Class A-3 Certificates on such Remittance Date shall be
allocated first to the monthly interest requirement calculated pursuant to
clause (a) of such definition and then to any Class A-3 Unpaid Interest
Shortfall pursuant to clause (b) of such definition.
CLASS A-4 CERTIFICATE: Any one of the Certificates designated Class A-4,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits B-1 and E hereto.
CLASS A-4 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class A-4 Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS A-4 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class A-4 Remittance Rate on the Class A-4 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class A-4 Unpaid Interest Shortfall.
CLASS A-4 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class A-4
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class A-4 Interest Formula Distribution
Amount."
CLASS A-4 PRINCIPAL BALANCE: At any time, the Original Class A-4
Principal Balance minus the sum of all amounts previously distributed on the
Class A-4 Certificates since the Closing Date pursuant to clauses A(ii) and
B(ii) of Section 6.01(a).
CLASS A-4 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
5.84% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS A-4 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class A-4 Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class A-4 Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-4 Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (b) of the
definition of "Class A-4 Interest Formula Distribution Amount" were actually
distributed on the Class A-4 Certificates on any particular Remittance Date,
the distribution of interest on the Class A-4 Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant
8
to clause (a) of such definition and then to any Class A-4 Unpaid Interest
Shortfall pursuant to clause (b) of such definition.
CLASS A-5 CERTIFICATE: Any one of the Certificates designated Class A-5,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits B-1 and E hereto.
CLASS A-5 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class A-5 Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS A-5 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class A-5 Remittance Rate on the Class A-5 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class A-5 Unpaid Interest Shortfall.
CLASS A-5 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class A-5
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class A-5 Interest Formula Distribution
Amount."
CLASS A-5 PRINCIPAL BALANCE: At any time, the Original Class A-5
Principal Balance minus the sum of all amounts previously distributed on the
Class A-5 Certificates since the Closing Date pursuant to clauses A(iv) and
B(iv) of Section 6.01(a).
CLASS A-5 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
6.34% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS A-5 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class A-5 Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class A-5 Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-5 Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (b) of the
definition of "Class A-5 Interest Formula Distribution Amount" were actually
distributed on the Class A-5 Certificates on any particular Remittance Date,
the distribution of interest on the Class A-5 Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (a) of such definition and then to any Class A-5 Unpaid
Interest Shortfall pursuant to clause (b) of such definition.
CLASS B CERTIFICATE: Any one of the Class B-1 Certificates or Class B-2
Certificates, as the case may be.
CLASS B PERCENTAGE: As to any Remittance Date, 100% minus the sum of the
Class A Percentage and Class M-1 Percentage for such Remittance Date.
9
CLASS B PRINCIPAL BALANCE: As to any Remittance Date, the sum of the
Class B-1 Principal Balance and the Class B-2 Principal Balance (before giving
effect to distributions on the Certificates on such Remittance Date).
CLASS B-1 CERTIFICATE: Any one of the Certificates designated Class B-1,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits C and E hereto.
CLASS B-1 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class B-1 Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS B-1 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class B-1 Remittance Rate on the Class B-1 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class B-1 Unpaid Interest Shortfall.
CLASS B-1 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class B-1
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class B-1 Interest Formula Distribution
Amount."
CLASS B-1 PRINCIPAL BALANCE: At any time, the Original Class B-1
Principal Balance minus the sum of (i) all amounts previously distributed on
the Class B-1 Certificates pursuant to clauses A(viii) and B(viii) of Section
6.01(a).
CLASS B-1 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
5.85% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS B-1 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class B-1 Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class B-1 Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class B-1 Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (b) of the
definition of "Class B-1 Interest Formula Distribution Amount" were actually
distributed on the Class B-1 Certificates on any particular Remittance Date,
the distribution of interest on the Class B-1 Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (a) of such definition and then to any Class B-1 Unpaid
Interest Shortfall pursuant to clause (b) of such definition.
CLASS B-2 CERTIFICATE: Any one of the Certificates designated Class B-2,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits C-1 and E hereto.
10
CLASS B-2 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class B-2 Certificates on such Remittance Date
pursuant to Section 6.01 (excluding the amount of the Guarantee Payment, if
any, with respect to such Remittance Date).
CLASS B-2 FLOOR AMOUNT: As to any Remittance Date, $10,000,000.
CLASS B-2 FORMULA DISTRIBUTION AMOUNT: As to any Remittance Date, an
amount equal to the sum of (a) the Class B-2 Interest Formula Distribution
Amount for such Remittance Date and (b) the greater of (x) the Class B-2
Principal Liquidation Loss Amount for such Remittance Date and (y) an amount
equal to the amount, if any, of principal that would be distributable on the
Class B-2 Certificates on such Remittance Date pursuant to clauses (A)(x) or
(B)(x), as the case may be, of Section 6.01(a) hereof, assuming that the
Available Distribution Amount for such Remittance Date remaining after
distribution of the amounts specified in (x) clauses A(i), A(iii), A(v),
A(vii) and A(ix) in the aggregate or (y) clauses B(i), B(iii), B(v), B(vii)
and B(ix) in the aggregate, as the case may be, of Section 6.01(a) hereof is
at least equal to the Formula Principal Distribution Amount for such
Remittance Date.
CLASS B-2 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class B-2 Remittance Rate on the Class B-2 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class B-2 Unpaid Interest Shortfall.
CLASS B-2 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed in respect of interest on the Class B-2
Certificates on such Remittance Date is less than the amount computed pursuant
to clause (a) of the definition of "Class B-2 Interest Formula Distribution
Amount."
CLASS B-2 PRINCIPAL BALANCE: At any time, the Original Class B-2
Principal Balance minus the sum of (i) all amounts previously distributed on
the Class B-2 Certificates pursuant to clauses A(x) and B(x) of Section
6.01(a).
CLASS B-2 PRINCIPAL LIQUIDATION LOSS AMOUNT: As to any Remittance Date,
the amount, if any, by which the sum of the Class A Principal Balance, the
Class M-1 Principal Balance and the Class B Principal Balance for such
Remittance Date exceeds the Pool Scheduled Principal Balance for such
Remittance Date, in each case, after giving effect to all distributions on the
Certificates on account of principal on such Remittance Date (exclusive of the
Guarantee Payment, if any).
CLASS B-2 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
7.84% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS B-2 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class B-2 Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class B-2 Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class B-2 Remittance Rate on the amount thereof
11
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (b) of the
definition of "Class B-2 Interest Formula Distribution Amount" were actually
distributed on the Class B-2 Certificates on any particular Remittance Date,
the distribution of interest on the Class B-2 Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (a) of such definition and then to any Class B-2 Unpaid
Interest Shortfall pursuant to clause (b) of such definition.
CLASS M-1 AND CLASS B PRINCIPAL DISTRIBUTION TEST: The Class M-1 and
Class B Principal Distribution Test is met in respect of a Remittance Date if
the following conditions are satisfied:
(i) such Remittance Date is on or after the September 2007
Remittance Date;
(ii) the Class M-1 Percentage plus the Class B Percentage for such
Remittance Date is equal to at least 22.75%;
(iii) the Average Sixty-Day Delinquency Ratio for the Contracts as
of such Remittance Date does not exceed 5.00%;
(iv) the Cumulative Realized Losses for the Contracts do not exceed
(x) 7% of the Pool Original Principal Balance, as of the September 2007
Remittance Date, (y) 8% of the Pool Original Principal Balance as of the
September 2008 Remittance Date, and (z) 9% of the Pool Original Principal
Balance as of the September 2009 Remittance Date and thereafter;
(v) the Current Realized Loss Ratio for the Contracts as of such
Remittance Date does not exceed 2.75%; and
(vi) the Class B-2 Principal Balance is not less than the Class B-2
Floor Amount.
CLASS M-1 CERTIFICATE: Any one of the Certificates designated Class M-1,
executed and countersigned as provided herein, substantially in the form set
forth in Exhibits B-2 and E hereto.
CLASS M-1 DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class M-1 Certificates on such Remittance Date
pursuant to Section 6.01.
CLASS M-1 INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance
Date, an amount equal to the sum of (a) interest accrued during the related
Interest Period at the Class M-1 Remittance Rate on the Class M-1 Principal
Balance as of such Remittance Date (before giving effect to the distribution
on such Remittance Date) and (b) any Class M-1 Unpaid Interest Shortfall.
CLASS M-1 INTEREST SHORTFALL: As to any Remittance Date, any amount by
which the amount distributed on the Class M-1 Certificates on such Remittance
Date is less than
12
the amount computed pursuant to clause (a) of the definition of "Class M-1
Interest Formula Distribution Amount."
CLASS M-1 PERCENTAGE: As to any Remittance Date, the percentage derived
from the fraction (which shall not be greater than 1) whose numerator is the
Class M-1 Principal Balance immediately prior to such Remittance Date and
whose denominator is the Pool Scheduled Principal Balance immediately prior to
such Remittance Date.
CLASS M-1 PRINCIPAL BALANCE: At any time, the Original Class M-1
Principal Balance minus the sum of all amounts previously distributed on the
Class M-1 Certificates since the Closing Date pursuant to clauses A(vi) and
B(vi) of Section 6.01(a).
CLASS M-1 REMITTANCE RATE: As to any Remittance Date, the lesser of (i)
6.41% per annum and (ii) the Weighted Average Net Contract Rate for such
Remittance Date.
CLASS M-1 UNPAID INTEREST SHORTFALL: As to any Remittance Date, the
amount, if any, by which the aggregate of the Class M-1 Interest Shortfalls
for prior Remittance Dates exceeds the aggregate of the amounts distributed on
the Class M-1 Certificates on prior Remittance Dates in respect of such
Interest Shortfalls, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class M-1 Remittance Rate on the amount thereof
from such prior Remittance Date to such current Remittance Date. For purposes
of determining whether amounts distributable pursuant to clause (b) of the
definition of "Class M-1 Interest Formula Distribution Amount" were actually
distributed on the Class M-1 Certificates on any particular Remittance Date,
the distribution of interest on the Class M-1 Certificates on such Remittance
Date shall be allocated first to the monthly interest requirement calculated
pursuant to clause (a) of such definition and then to any Class M-1 Unpaid
Interest Shortfall pursuant to clause (b) of such definition.
CLASS R CERTIFICATE: The Certificate executed and countersigned as
provided herein, substantially in the form set forth in Exhibits D and E
hereto.
CLASS R DISTRIBUTION AMOUNT: As to any Remittance Date, the aggregate
amount distributed on the Class R Certificate pursuant to Section 6.01.
CLOSING DATE: August 23, 2002.
CODE: The Internal Revenue Code of 1986, as amended.
COMPUTER TAPE: The computer tape generated by Vanderbilt which provides
information relating to the Contracts, and includes the master file and the
history file.
CONTRACT FILE: As to each Contract, other than a Land-and-Home Contract
or a Mortgage Loan, (a) the original of the Contract (except for fewer than 15
Contracts, in which case the related Contract File shall contain a photocopy
of the original Contract together with a certificate from the Obligor under
such Contract certifying that such photocopy is a true copy of the original
Contract), and, in the case of each Bi-weekly Contract, the original of the
bi-weekly rider for such Contract, and, in the case of each Equity Builder
Contract, the original of the graduated payment rider for such Contract; (b)
the original title document for the related
13
Manufactured Home of the type issued to lienholders, unless the laws of the
jurisdiction in which the related Manufactured Home is located do not provide
for the issuance of such title documents for such Manufactured Home; (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: (1) notation of such security interest on the title document, (2)
a financing statement meeting the requirements of the UCC, with evidence of
recording in the appropriate offices indicated thereon, or (3) such other
evidence of perfection of a security interest in a manufactured housing unit
as is customary in such jurisdiction; (d) the assignment of the Contract
(which may be in a blanket form that also covers other Contracts or contracts)
from the Originator to Vanderbilt; and (e) any extension, modification or
waiver agreement(s). In addition, as to each Land Secured Contract, the
related Mortgage with evidence of recording thereon.
CONTRACT POOL: The pool of Contracts held in the Trust Fund.
CONTRACT RATE ADJUSTMENT DATE: As to each Adjustable Rate Contract, a
date on which the related APR may adjust, as provided in such Contract.
CONTRACT SCHEDULE: The list (as such list may be amended from time to
time) identifying (A) each Initial Contract constituting part of the corpus of
the Trust Fund as of the Cut-off Date, and (B) each Subsequent Contract
transferred to the Trustee or a separate trustee as of the related Subsequent
Transfer Date and which (a) identifies each Contract as either a Fixed Rate
Contract or Adjustable Rate Contract and by contract number and name and
address of the Obligor and (b) sets forth as to each Contract (i) the unpaid
principal balance as of the related Transfer Date determined by giving effect
to payments received prior to the related Transfer Date, (ii) the amount of
each scheduled payment due from the Obligor, and (iii) the APR.
CONTRACTS: The manufactured housing installment sale contracts and
installment loan agreements, including any Land-and-Home Contracts and any
Mortgage Loans, described in the Contract Schedule and constituting part of
the corpus of the Trust Fund, which Contracts are to be sold and assigned by
Vanderbilt to the Trustee and which are the subject of this Agreement. The
Contracts include, without limitation, all related security interests and any
and all rights to receive payments which are due pursuant thereto from and
after the Cut-off Date, but exclude any rights to receive payments which are
due pursuant thereto prior to the Cut-off Date.
CORPORATE TRUST OFFICE: The principal office of the Trustee at which at
any particular time its corporate business in connection with this Agreement
shall be administered, which office at the date of execution of this Agreement
is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
CUMULATIVE REALIZED LOSSES: As to any Remittance Date, the Aggregate Net
Liquidation Losses for the period from the Cut-off Date through the end of the
related Due Period.
CURRENT REALIZED LOSS RATIO: As to any Remittance Date, the annualized
percentage derived from the fraction, the numerator of which is the sum of the
Aggregate Net Liquidation Losses for the three preceding Due Periods and the
denominator of which is the
14
arithmetic average of the Pool Scheduled Principal Balances for such
Remittance Date and the preceding two Remittance Dates.
CUSTODIAL AGREEMENT: As defined in Section 2.04(a).
CUT-OFF DATE: July 25, 2002 for the Initial Contracts.
DEFICIENCY EVENT: The Remittance Date, if any, on which the Pool
Scheduled Principal Balance becomes equal to or less than the Class A
Principal Balance.
DEFINITIVE CERTIFICATES: Any Certificate evidenced by a physical
certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 4.02(g).
DEPOSITORY: The initial Depository shall be The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of (i) one Class
A-1F Certificate evidencing $30,000,000 in initial aggregate principal balance
of the Class A-1F Certificates, (ii) one Class A-1V Certificate evidencing
$101,726,000 in initial aggregate principal balance of the Class A-1V
Certificates, (iii) one Class A-2 Certificate evidencing $120,364,000 in
initial aggregate principal balance of the Class A-2 Certificates, (iv) one
Class A-3 Certificate evidencing $64,300,000 in initial aggregate principal
balance of the Class A-3 Certificates, (v) one Class A-4 Certificate
evidencing $96,110,000 in initial aggregate principal balance of the Class A-4
Certificates, (vi) one Class A-5 Certificate evidencing $22,500,000 in initial
aggregate principal balance of the Class A-5 Certificates, (vii) one Class M-1
Certificate evidencing $20,000,000 in initial aggregate principal balance of
the Class M-1 Certificates, (viii) one Class B-1 Certificate evidencing
$18,750,000 in initial aggregate principal balance of the Class B-1
Certificates and (ix) one Class B-2 Certificate evidencing $26,250,000 in
initial aggregate principal balance of the Class B-2 Certificates. The
Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York.
DEPOSITORY PARTICIPANT: 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: The fifth Business Day prior to each Remittance Date.
DISTRIBUTION ACCOUNT: The custodial account or accounts created and
maintained pursuant to Section 5.18.
DUE DATE: The day of the month (or in the case of a Bi-weekly Contract or
Semi-Monthly Contract, each day in the month) on which each scheduled payment
of principal and interest is due on a Contract, exclusive of any days of
grace.
DUE PERIOD: With respect to any Remittance Date, the period commencing on
the 26th day of the second month preceding the month of such Remittance Date
and ending on the 25th day of the month preceding the month of such Remittance
Date.
15
ELECTRONIC LEDGER: The electronic master record of Vanderbilt's
manufactured housing installment sales contracts and installment loan
agreements clearly identifying each Contract that is part of the corpus of the
Trust Fund.
ELIGIBLE ACCOUNT: An account that is either (i) maintained with a
depository institution the commercial paper or short-term unsecured debt
obligations of which is rated "P-1" by Moody's and "A-1+" by S&P, (ii) a trust
account maintained with the Trustee in its corporate trust department or (iii)
otherwise acceptable to the Rating Agencies, as evidenced by a letter from the
Rating Agencies, without a reduction or withdrawal of the rating of the
Certificates.
ELIGIBLE INVESTMENTS: One or more of the following:
(a) direct obligations of, or guaranteed as to the full and timely
payment of principal and interest by, the United States or any agency or
instrumentality thereof when such obligations are backed by the full
faith and credit of the United States;
(b) repurchase agreements on obligations specified in clause (a)
maturing not more than one month from the date of acquisition thereof,
provided that the long-term unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by each Rating
Agency in the two highest rating category available from such Rating
Agency; and provided further that the short-term debt obligations of the
party agreeing to repurchase shall be at the time rated "P-1" by Moody's
and "A-1+" by S&P;
(c) federal funds, certificates of deposit, time deposits, demand
deposits and bankers' acceptances, each of which shall not have an
original maturity of more than 90 days, of any depository institution or
trust company incorporated under the laws of the United States or any
state; provided that the short-term obligations of such depository
institution or trust company shall be at the time rated "P-1" by Moody's
and "A-1+" by S&P;
(d) commercial paper (having original maturities of not more than
270 days) of any corporation incorporated under the laws of the United
States or any state thereof; provided that such commercial paper shall be
at the time rated "P-1" by Moody's and "A-1+" by S&P;
(e) any money market fund rated "P-1" by Moody's and "A-1+" by S&P;
and
(f) other obligations or securities that are acceptable to the
Rating Agencies as an Eligible Investment hereunder and will not result
in a reduction in or withdrawal of the then current rating or ratings of
the Certificates, as evidenced by a letter to such effect from the Rating
Agencies;
provided, however, that no instrument shall be an Eligible Investment if such
instrument evidences a right to receive only interest payments with respect to
the obligations underlying such instrument.
ELIGIBLE SUBSTITUTE CONTRACT: As to any Replaced Contract for which such
Eligible Substitute Contract is being substituted pursuant to Section 3.05(b),
a Contract that (a)
16
as of the date of its substitution, satisfies all of the representations and
warranties (which, except when expressly stated to be as of origination, shall
be deemed to be determined as of the date of its substitution rather than as
of the Cut-off Date or the Closing Date) in Section 3.02 and does not cause
any of the representations and warranties in Section 3.03, after giving effect
to such substitution, to be incorrect, (b) after giving effect to the
scheduled payment or payments 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, (c) has an APR that is at least equal to
the APR of such Replaced Contract, (d) has a remaining term to scheduled
maturity that is not greater than the remaining term to scheduled maturity of
the Replaced Contract, (e) has not been delinquent for more than 31 days as to
any scheduled payment due within twelve months of the date of its
substitution, (f) if the Replaced Contract is secured by a Manufactured Home
which was new at the time of origination, it shall be replaced by a new
Eligible Substitute Contract and (g) if the Replaced Contract is secured by a
Manufactured Home which is a double-wide, the Eligible Substitute Contract
shall be a double-wide. Notwithstanding the foregoing, in the event that on
any date more than one Eligible Substitute Contract is substituted for one or
more Replaced Contracts, the requirement set forth in clause (b) above with
respect to Scheduled Principal Balance may be satisfied if the aggregate of
the Scheduled Principal Balances of such Eligible Substitute Contracts is not
greater than the aggregate of the Scheduled Principal Balances of such
Replaced Contracts; the requirement set forth in clause (c) above with respect
to APR may be satisfied if the weighted average APR of such Eligible
Substitute Contracts is at least equal to the weighted average APR of such
Replaced Contracts (provided that the APR of each Eligible Substitute Contract
to be substituted for a Fixed Rate Contract shall be equal to or greater than
the Weighted Average Net Contract Rate); the requirement set forth in clause
(d) above with respect to remaining term to scheduled maturity may be
satisfied if the weighted average remaining term to scheduled maturity of such
Eligible Substitute Contracts is not greater than the weighted average
remaining term to scheduled maturity of such Replaced Contracts; provided that
no Eligible Substitute Contract shall have a scheduled maturity date later
than December 15, 2032.
EQUITY BUILDER CONTRACT: Contracts which provide for interest-only
payments during the first year, and after the first year, the payment amount
increases annually such that the Contract is fully amortized for the remainder
of the term of the Contract. The payment increase is based upon a percentage
of the required interest payment during the first year.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA RESTRICTED CERTIFICATE: The Class R Certificate and any other
certificate that does not satisfy the applicable rating requirement under the
Underwriter's Exemption.
EVENT OF DEFAULT: Any one of the events described in Section 9.01 hereof.
EXTENSION FEE: Any extension fee paid by the Obligor on a Contract.
FIDELITY BOND: A fidelity bond to be maintained by the Servicer pursuant
to Section 5.10.
FILE: A Contract File, Land-and-Home Contract File or a Mortgage Loan
File.
17
FIRST REMITTANCE DATE: September 9, 2002.
FIXED RATE CERTIFICATES: The Class ▇-▇▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4,
Class A-5, Class M-1, Class B-1 and Class B-2 Certificates.
FIXED RATE CONTRACT: Each Contract sold to the Trust Fund which bears
interest at a fixed rate.
FLOATING RATE CERTIFICATES: The Class A-1V Certificates.
FORMULA PRINCIPAL DISTRIBUTION AMOUNT: As to any Remittance Date, an
amount equal to the sum of (a) all scheduled payments of principal due on each
Outstanding Contract during the Due Period immediately preceding such
Remittance Date, (b) the Scheduled Principal Balance of each Contract which,
during the Due Period preceding the month of such Remittance Date, was
purchased by Vanderbilt pursuant to Section 3.05 of this Agreement, (c) all
Partial Prepayments received with respect to Contracts during such preceding
Due Period, (d) the Scheduled Principal Balance of each Contract for which a
Principal Prepayment in Full was received during such preceding Due Period,
(e) the Scheduled Principal Balance of each Contract that became a Liquidated
Contract during such Due Period and (f) any previously undistributed
shortfalls in the distribution of the amounts in clauses (a) through (e) in
respect of prior Remittance Dates (other than any such shortfall with respect
to which a Guarantee Payment has been made to the Class B-2
Certificateholders). The Formula Principal Distribution Amount for the
Remittance Date immediately following the end of the Funding Period will also
include an amount equal to the Pre-Funded Amount remaining at the end of the
Funding Period.
FRACTIONAL INTEREST: As to any Certificate of any Class, the product of
(a) the Percentage Interest evidenced by such Certificate multiplied by (b)
the amount derived from dividing the Principal Balance of such Class by the
sum of the Class A Principal Balance, Class M-1 Principal Balance and Class B
Principal Balance.
FUNDING PERIOD: The period commencing on the Closing Date and ending on
the earliest to occur of (a) the Determination Date on which the Pre-Funded
Amount (exclusive of any Pre-Funding Account Earnings) is equal to or less
than $100,000, (b) the occurrence of an Event of Default or (c) November 21,
2002.
GROSS MARGIN: With respect to each Adjustable Rate Contract, the
percentage set forth in the related Contract to be added to the related index
for use in determining such Contract's APR on each date of adjustment thereof.
GUARANTEE PAYMENT: As to any Remittance Date, the amount, if any, by
which (a) the Class B-2 Formula Distribution Amount for such Remittance Date
exceeds (b) the Remaining Amount Available.
GUARANTEE REIMBURSEMENT AMOUNT: As to any Remittance Date, an amount
equal to the lesser of (a) the Available Distribution Amount for such
Remittance Date less the portion thereof that represents the sum of the
amounts (i) distributed on the Certificates (other than the Class R
Certificate) on such Remittance Date and (ii) paid to the Servicer in respect
of the Monthly Servicing Fee pursuant to clause A(xiii) or B(xiii) of Section
6.01(a) on such
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Remittance Date and (b) the aggregate amount of outstanding Guarantee Payments
that remain unreimbursed as of such Remittance Date.
HAZARD INSURANCE POLICY: With respect to each Contract, the policy of
fire and extended coverage insurance (and federal flood insurance, if
applicable) required to be maintained for the related Manufactured Home, as
provided in Section 5.09, and which, as provided in Section 5.09, may be a
blanket insurance policy maintained by the Servicer in accordance with the
terms and conditions of Section 5.09.
INDEX: As to any Adjustable Rate Contract, the published rate upon which
the related Remittance Rate is calculated.
INITIAL CONTRACTS: The Contracts listed on Schedule A-1 conveyed to the
Trustee or a separate trustee by Vanderbilt on the Closing Date.
INITIAL PRINCIPAL AMOUNT: With respect to the Initial Contracts,
$375,000,015.86.
INTEREST DEFICIENCY AMOUNT: With respect to the Class A-5 Certificates,
the Class M-1 Certificates and the Class B-1 Certificates and any Remittance
Date, the Interest Formula Distribution Amount with respect to each such Class
remaining unpaid after application of the Available Distribution Amount in
accordance with Section 6.01(a).
INTEREST DEFICIENCY WITHDRAWAL: With respect to any Remittance Date and:
(i) the Class A-5 Certificates, the lesser of:
(a) if such Remittance Date occurs between September 1, 2002 and
August 31, 2003 and the Cumulative Realized Losses as of such Remittance
Date are greater than 7.50% of the Initial Principal Amount of the
Contracts, zero;
(b) if such Remittance Date occurs between September 1, 2003 and
August 31, 2004 and the Cumulative Realized Losses as of such Remittance
Date are greater than 12.75% of the Initial Principal Amount of the
Contracts, zero;
(c) if such Remittance Date occurs between September 1, 2004 and
August 31, 2005 and the Cumulative Realized Losses as of such Remittance
Date are greater than 18.00% of the Initial Principal Amount of the
Contracts, zero;
(d) if such Remittance Date occurs after September 1, 2005 and the
Cumulative Realized Losses as of such Remittance Date are greater than
21.50% of the Initial Principal Amount of the Contracts, zero;
(e) the applicable Interest Deficiency Amount; and
(f) the amount remaining on deposit in the Certificate Account after
withdrawal of the Available Distribution Amount;
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(ii) the Class M-1 Certificates, the lesser of:
(a) if such Remittance Date occurs between September 1, 2002 and
August 31, 2003 and the Cumulative Realized Losses as of such Remittance
Date are greater than 6.00% of the Initial Principal Amount of the
Contracts, zero;
(b) if such Remittance Date occurs between September 1, 2003 and
August 31, 2004 and the Cumulative Realized Losses as of such Remittance
Date are greater than 10.25% of the Initial Principal Amount of the
Contracts, zero;
(c) if such Remittance Date occurs between September 1, 2004 and
August 31, 2005 and the Cumulative Realized Losses as of such Remittance
Date are greater than 14.50% of the Initial Principal Amount of the
Contracts, zero;
(d) if such Remittance Date occurs after September 1, 2005 and the
Cumulative Realized Losses as of such Remittance Date are greater than
17.00% of the Initial Principal Amount of the Contracts, zero;
(e) the applicable Interest Deficiency Amount; and
(f) the amount remaining on deposit in the Certificate Account after
making the Class A-5 Interest Deficiency Withdrawal; and
(iii) the Class B-1 Certificates, the lesser of:
(a) if such Remittance Date occurs between September 1, 2002 and
August 31, 2003 and the Cumulative Realized Losses as of such Remittance
Date are greater than 5.25% of the Initial Principal Amount of the
Contracts, zero;
(b) if such Remittance Date occurs between September 1, 2003 and
August 31, 2004 and the Cumulative Realized Losses as of such Remittance
Date are greater than 9.00% of the Initial Principal Amount of the
Contracts, zero;
(c) if such Remittance Date occurs between September 1, 2004 and
August 31, 2005 and the Cumulative Realized Losses as of such Remittance
Date are greater than 12.75% of the Initial Principal Amount of the
Contracts, zero;
(d) if such Remittance Date occurs after September 1, 2005 and the
Cumulative Realized Losses as of such Remittance Date are greater than
5.00% of the Initial Principal Amount of the Contracts, zero;
(e) the applicable Interest Deficiency Amount; and
(f) the amount remaining on deposit in the Certificate Account after
making the Class M-1 Interest Deficiency Withdrawal.
INTEREST FORMULA DISTRIBUTION AMOUNT: As to any Remittance Date, the
Class A-1 Interest Formula Distribution Amount, the Class A-2 Interest Formula
Distribution
20
Amount, the Class A-3 Interest Formula Distribution Amount, the Class A-4
Interest Formula Distribution Amount, the Class A-5 Interest Formula
Distribution Amount, the Class M-1 Interest Formula Distribution Amount, the
Class B-1 Interest Formula Distribution Amount or the Class B-2 Interest
Formula Distribution Amount, as applicable.
INTEREST PERIOD: With respect to the Floating Rate Certificates and any
Remittance Date, the period commencing on the preceding Remittance Date (or in
the case of the first Remittance Date, the Closing Date) through the day
preceding such Remittance Date. With respect to the Fixed Rate Certificates
and any Remittance Date, the period from the first day of the calendar month
preceding the month of such Remittance Date through the last day of such
calendar month.
LAND-AND-HOME CONTRACT: 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: With respect to each Land-and-Home Contract,
(a) sthe original of the Land-and-Home Contract, and, in the case of
each Bi-weekly Contract, the original of the bi-weekly rider for such
Contract, and, in the case of each Equity Builder Contract, the original
of the graduated payment rider for such Contract;
(b) the original related Mortgage with evidence of recording thereon
and any title document for the related Manufactured Home;
(c) with respect to any Land-and-Home Contract not originated by
Vanderbilt, the assignment of the Land-and-Home Contract from the
originator to Vanderbilt with evidence of recording thereon;
(d) with respect to any Land-and-Home Contract originated by
Vanderbilt, an endorsement of such Land-and-Home Contract by Vanderbilt
without recourse;
(e) with respect to the Land-and-Home Contracts located in the ten
states with the highest concentration of Land-and-Home Contracts, an
Opinion of Counsel to the effect that Vanderbilt need not cause to be
recorded any assignment which relates to Land-and-Home Contracts in such
states to protect the Trustee's and the Certificateholders' interest in
such Land-and-Home Contracts; provided, however, if Vanderbilt fails to
deliver such an Opinion of Counsel for any such states, with respect to
the Land-and-Home Contracts located in those states, Vanderbilt shall
provide an original executed assignment of the Mortgage, with evidence of
recording thereon, showing the assignment from Vanderbilt to the Trustee
or the separate trustee, as applicable; and
(f) any extension, waiver or modification agreement(s) for each
Land-and-Home Contract on the Schedule.
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LAND SECURED CONTRACT: A Contract that is secured by (i) a security
interest in a Manufactured Home and (ii) a Mortgage on real estate on which
the related 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.
LATE PAYMENT FEES: Any late payment fees paid by Obligors on Contracts
after all sums received have been allocated first to regular installments due
or overdue and all such installments are then paid in full.
LIBOR: As to any date, the rate for United States dollar deposits for one
month which appear on the Telerate Screen LIBOR Page 3750 as of 11:00 A.M.,
London time. If such rate does not appear on such page (or such other page as
may replace that page on that service, or if such service is no longer
offered, such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Seller after consultation with the Trustee), the
rate will be the Reference Bank Rate. If no such quotations can be obtained
and no Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Remittance Date.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the State of New York or in the city of
London, England are required or authorized by law to be closed.
LIFETIME CAP: With respect to an Adjustable Rate Contract, the maximum
APR, if any, that may be borne by such Contract over its term, as set forth as
such therein.
LIMITED GUARANTEE: The obligation of ▇▇▇▇▇▇▇ to make Guarantee Payments
as set forth in Section 6.05.
LIQUIDATED CONTRACT: 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 and, in the case of
Land-and-Home Contracts, Mortgaged Property have been realized upon and
disposed of and the proceeds of such disposition have been received shall be
deemed to be a Liquidated Contract.
LIQUIDATION EXPENSES: All reasonable out-of-pocket expenses (exclusive of
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 and, in the case of Land-and-Home Contracts,
Mortgaged Property are disposed of, including, without limitation, legal fees
and expenses, any unreimbursed amount expended by the Servicer pursuant to
Section 5.06 or 5.09 (to the extent such amount is reimbursable under the
terms of Section 5.06 or 5.09, as the case may be) respecting such Contract
and any unreimbursed expenditures for property taxes or for property
restoration or preservation that are related to such liquidation.
LIQUIDATION PROCEEDS: Cash (including insurance proceeds other than those
applied to the restoration of the related Manufactured Home or released to the
related Obligor in accordance with the normal servicing procedures of the
Servicer) received in connection with the liquidation of defaulted Contracts,
whether through repossession or otherwise.
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LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Contract
and the denominator of which is the Original Value of the related Manufactured
Home (including for this purpose the Original Value of any Mortgaged Property
not constituting a part of the Manufactured Home).
MANUFACTURED HOME: A unit of manufactured housing which meets the
requirements of Section 25(e)(10) of the Code, including all accessions
thereto, securing the indebtedness of the Obligor under the related Contract.
MINIMUM APR: With respect to an Adjustable Rate Contract, the minimum
APR, if any, that may be borne by such Contract over its term, as set forth as
such therein.
MONTHLY ADVANCE: As to any Remittance Date, the aggregate of all
scheduled payments of principal and interest which were due during the related
Due Period on any Contracts that remained Outstanding at the end of such Due
Period and were not collected during such Due Period, exclusive of any such
scheduled payment which the Servicer has determined would be a Nonrecoverable
Advance if an advance in respect of such scheduled payment were made.
MONTHLY ADVANCE REIMBURSEMENT AMOUNT: Any amount received or deemed to be
received by the Servicer pursuant to Section 6.04(c) in reimbursement of a
Monthly Advance made out of its own funds.
MONTHLY REPORT: The monthly report described in Section 7.01.
MONTHLY SERVICING FEE: With respect to any Remittance Date, an amount
equal to one-twelfth of 1.25% of the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
MORTGAGE: The mortgage or deed of trust creating a lien on an estate in
fee simple interest in the real property securing a Contract.
MORTGAGE LOANS: The mortgage loans or deeds of trust secured by a
mortgage or deed of trust of one- to four-family residential properties,
described in the Contract Schedule and constituting part of the corpus of the
Trust, which are to be sold and assigned by Vanderbilt to the Trustee and
which are the subject of this Agreement. The Mortgage Loans include, without
limitation, all related security interests and any and all rights to receive
payments which are due pursuant thereto from and after the Cut-off Date, but
exclude any rights to receive payments which are due pursuant thereto prior to
the Cut-off Date.
MORTGAGE LOAN FILE: With respect to each Mortgage Loan,
(a) the original related Mortgage, with evidence of recording
indicated thereon, and the original related mortgage note, if any;
23
(b) the original assignment and any intervening assignments of the
Mortgage, with evidence of recording thereon, showing a complete chain of
assignment of the Mortgage Loan from origination of the Mortgage Loan to
Vanderbilt;
(c) the original assignment, with evidence of recording thereon,
showing the assignment from Vanderbilt to the Trustee or the separate
trustee, as applicable; and
(d) any extension, modification or waiver agreement(s) for each
Mortgage Loan on the Schedule.
MORTGAGED PROPERTY: The property subject to a Mortgage.
NET LIQUIDATION PROCEEDS: As to any Liquidated Contract, Liquidation
Proceeds net of the sum of (i) Liquidation Expenses and (ii) any amount
required to be paid to the Obligor or any other Person with an interest in the
Manufactured Home or any related Mortgaged Property that is senior to the
interest of the Trust Fund.
NON RECORDATION OPINION: As defined in Section 2.04(d).
NONRECOVERABLE ADVANCE: Any advance made or proposed to be made pursuant
to Section 6.04, which the Servicer believes, in its good faith judgment, is
not, or if made would not be, ultimately recoverable from Liquidation Proceeds
or otherwise. In determining whether an advance is or will be nonrecoverable,
the Servicer need not take into account that it might receive any amounts in a
deficiency judgment. The determination by the Servicer that any advance is, or
if made would constitute, a Nonrecoverable Advance, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee and stating the
reasons for such determination.
OBLIGOR: Each Person who is indebted under a Contract or who has acquired
a Manufactured Home subject to a Contract.
OFFICER'S CERTIFICATE: A certificate signed by the President, a Vice
President, the Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant Secretaries or any other duly authorized officer of Vanderbilt or
the Servicer, as appropriate, and delivered to the Trustee as required by this
Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be the counsel
for Vanderbilt or the Servicer and who shall be acceptable to the Trustee.
ORIGINAL CLASS A-1F PRINCIPAL BALANCE: $30,000,000.
ORIGINAL CLASS A-1V PRINCIPAL BALANCE: $101,726,000.
ORIGINAL CLASS A-2 PRINCIPAL BALANCE: $120,364,000.
ORIGINAL CLASS A-3 PRINCIPAL BALANCE: $64,300,000.
ORIGINAL CLASS A-4 PRINCIPAL BALANCE: $96,110,000.
24
ORIGINAL CLASS A-5 PRINCIPAL BALANCE: $22,500,000.
ORIGINAL CLASS M-1 PRINCIPAL BALANCE: $20,000,000.
ORIGINAL CLASS B-1 PRINCIPAL BALANCE: $18,750,000.
ORIGINAL CLASS B-2 PRINCIPAL BALANCE: $26,250,000.
ORIGINAL PRE-FUNDED AMOUNT: The amount deposited in the Pre-Funding
Account on the Closing Date from the proceeds of the sale of the Certificates,
which amount is $125,000,000.
ORIGINAL VALUE: With respect to any Manufactured Home that was new at the
time the related Contract was originated, the sum of the down payment
(including the value allocated to any trade-in unit or land pledged as
additional security or in lieu of the down payment), the original amount
financed on the related Contract, which may include sales and other taxes and
premiums for related insurance, and, in the case of a Land-and-Home Contract,
the value of the land securing the Contract as estimated by the dealer. With
respect to any Manufactured Home that was used at the time the related
Contract was originated, the total delivered sales price of such Manufactured
Home (including, for this purpose, any Mortgaged Property not constituting a
part of the Manufactured Home), plus sales and other taxes and, to the extent
financed under such Contract, premiums for related insurance.
ORIGINATOR: Any of the originators of Acquired Contracts listed in
Exhibit J hereto.
OUTSTANDING: With respect to any Contract as to the time of reference
thereto, a Contract that has not been fully prepaid, has not become a
Liquidated Contract, and has not been purchased pursuant to Section 3.05 prior
to such time of reference.
OUTSTANDING AMOUNT ADVANCED: As to any Remittance Date, the aggregate of
all Monthly Advances remitted by the Servicer out of its own funds pursuant to
Section 6.04, less the aggregate of all related Monthly Advance Reimbursement
Amounts actually received prior to such Remittance Date.
OWNERSHIP INTEREST: As defined in Section 4.08(b).
PARTIAL PREPAYMENT: Any Principal Prepayment other than a Principal
Prepayment in Full.
PAYING AGENT: Any paying agent appointed pursuant to Section 4.05.
PERCENTAGE INTEREST: As to any Certificate of any Class, the percentage
interest evidenced thereby in distributions required to be made on the
Certificates of such Class, such percentage interest being equal to the
percentage obtained by dividing the denomination of such Certificate by the
aggregate of the denominations of all of the outstanding Certificates of such
Class (or, in the case of the Class R Certificate, being equal to the
percentage specified on the face of such Class R Certificate).
25
PERIODIC CAP: With respect to an Adjustable Rate Contract, the provision
in each Adjustable Rate Contract that limits permissible increases and
decreases in such Contract's APR on any date on which such APR adjusts
pursuant to the terms of such Contract.
PERMITTED TRANSFEREE: As defined in Section 4.08(b).
PERSON: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
PLAN ASSETS: As defined in Section 4.02(b).
POOL FACTOR: As of any Remittance Date and as to any Class of
Certificates, the percentage obtained by dividing the Class A-1F Principal
Balance, the Class A-1V Principal Balance, the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal Balance, the Class
A-5 Principal Balance, the Class M-1 Principal Balance, the Class B-1
Principal Balance or the Class B-2 Principal Balance, as the case may be
(after giving effect to the distribution on such Remittance Date), by the
Original Class A-1F Principal Balance, the Original Class A-1V Principal
Balance, the Original Class A-2 Principal Balance, the Original Class A-3
Principal Balance, the Original Class A-4 Principal Balance, the Original
Class A-5 Principal Balance, the Original Class M-1 Principal Balance, the
Original Class B-1 Principal Balance or the Original Class B-2 Principal
Balance, respectively, carried out to seven decimal places.
POOL ORIGINAL PRINCIPAL BALANCE: As of any Remittance Date, the sum of
(i) the aggregate principal balance of the Initial Contracts as of the Cut-off
Date and (ii) the aggregate principal balance of all Subsequent Contracts
(determined as of the applicable Subsequent Cut-off Date) having a Subsequent
Transfer Date on or prior to the related Determination Date.
POOL SCHEDULED PRINCIPAL BALANCE: As to any Remittance Date, the sum of
(i) the Pool Original Principal Balance and (ii) the Pre-Funded Amount, if
any, remaining in the Pre-Funding Account as of the related Determination Date
(exclusive of any Pre-Funding Account Earnings) less (iii) the aggregate of
the Formula Principal Distribution Amounts (exclusive of the amounts in clause
(f) of the definition of "Formula Principal Distribution Amount") for all
prior Remittance Dates.
PRE-FUNDED AMOUNT: With respect to any Determination Date, the amount
remaining on deposit in the Pre-Funding Account, exclusive of any Pre-Funding
Account Earnings.
PRE-FUNDING ACCOUNT: The Pre-Funding Account established in accordance
with Section 5.19 hereof and maintained by the Trustee.
PRE-FUNDING ACCOUNT EARNINGS: With respect to the September 2002
Remittance Date, the actual investment earnings earned during the period from
the Closing Date through September 6 (inclusive) on the Pre-Funding Account
during such period as calculated by the Servicer pursuant to Section 5.20(d)
hereof; with respect to the October 2002 Remittance
26
Date, the actual investment earnings earned during the period from September
7, 2002 through October 6, 2002 (inclusive) on the Pre-Funding Account during
such period as calculated by the Servicer pursuant to Section 5.20(d) hereof;
with respect to the November 2002 Remittance Date, the actual investment
earnings earned during the period from October 7, 2002 through November 6,
2002 (inclusive) on the Pre-Funding Account during such period as calculated
by the Servicer pursuant to Section 5.20(d) hereof; with respect to the
December 2002 Remittance Date, the actual investment earnings earned during
the period from November 7, 2001 through December 6, 2001 (inclusive) on the
Pre-Funding Account during such period as calculated by the Servicer pursuant
to Section 5.20(d) hereof.
PRINCIPAL BALANCE: The Class A-1F Principal Balance, the Class A-1V
Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal
Balance, the Class A-4 Principal Balance, the Class A-5 Principal Balance, the
Class M-1 Principal Balance, the Class B-1 Principal Balance or the Class B-2
Principal Balance, as applicable.
PRINCIPAL PREPAYMENT: (i) Subject to clause (ii) of this definition, with
respect to any Due Date for a Contract, any payment or any portion thereof or
other recovery on such Contract (other than a Liquidated Contract or a
Contract repurchased pursuant to Section 3.05) received on or prior to such
Due Date (but after the immediately preceding Due Date) that exceeds the
amount necessary to bring such Contract current as of such Due Date and that
the Obligor has notified or confirmed with the Servicer are to be treated as a
prepayment of principal; (ii) notwithstanding the provisions of the preceding
clause (i), if any payment or any portion thereof or other recovery on a
Contract (other than a Liquidated Contract or a Contract repurchased pursuant
to Section 3.05) is sufficient to pay the outstanding principal balance of
such Contract, all accrued and unpaid interest at the APR to the payment date
and, at the option of the Servicer, all other outstanding amounts owing on
such Contract, the portion of the payments or recoveries on such Contract
during such Due Period that is equal to the Scheduled Principal Balance of
such Contract after giving effect to the scheduled payment on such Contract
due in such Due Period; and (iii) any cash deposit made with respect to a
Contract pursuant to Section 3.05.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment specified in
clause (ii) of the definition of the term "Principal Prepayment."
PRIVATE CERTIFICATES: The Class R Certificates; provided however, any
Class of Certificates offered pursuant to an effective registration statement
shall no longer be a Private Certificate.
RATING AGENCIES: Moody's and S&P.
RECORD DATE: With respect to the initial Remittance Date, the Closing
Date. With respect to any Remittance Date thereafter, the close of business of
the last Business Day of the month preceding the month of the related
Remittance Date, except that, with respect to the Class A-1 Certificates,
after the initial Remittance Date, the Record Date will be the Business Day
preceding the related Remittance Date. In the event that a Definitive
Certificate is issued with respect to a Class of Certificates, the Record Date
with respect to such Class will be the close of
27
business of the last Business Day of the month preceding the month of the
related Remittance Date.
RECORDED DOCUMENTS: As defined in Section 2.04(b).
REMAINING AMOUNT AVAILABLE: As to any Remittance Date, the Available
Distribution Amount less the sum of the Class A Distribution Amount, the Class
M-1 Distribution Amount and the Class B-1 Distribution Amount.
REMIC: A real estate mortgage investment conduit within the meaning of
Section 860D(a) of the Code.
REMIC CERTIFICATE MATURITY DATE: The "latest possible maturity date" of
the Regular Certificates as that term is defined in Section 2.07.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from
time to time.
REMITTANCE DATE: The 7th day of any month, or if such 7th day is not a
Business Day, the first Business Day immediately following the 7th day of the
month, commencing with September 9, 2002.
REMITTANCE RATE: As to each Class of Certificates, the Class A-1F
Remittance Rate, the Class A-1V Remittance Rate, the Class A-2 Remittance
Rate, the Class A-3 Remittance Rate, the Class A-4 Remittance Rate, the Class
A-5 Remittance Rate, the Class M-1 Remittance Rate, the Class B-1 Remittance
Rate or the Class B-2 Remittance Rate, as applicable.
REO ACCOUNT: As defined in Section 5.17.
REPLACED CONTRACT: As defined in Section 3.05(b).
REPOSSESSION PROFITS: As to any Remittance Date, the excess, if any, of
Net Liquidation Proceeds in respect of each Contract that became a Liquidated
Contract during the related Due Period over the sum of the unpaid principal
balance of such Contract plus accrued and unpaid interest at the related APR
on the unpaid principal balance thereof from the Due Date to which interest
was last paid by the Obligor to the Due Date for such Contract in the month in
which such Contract became a Liquidated Contract.
REPURCHASE OBLIGATION: The obligation of Vanderbilt, set forth in Section
3.05, to repurchase the related Contracts as to which there exists an uncured
breach of a representation or warranty contained in Section 3.02 or 3.03.
REPURCHASE PRICE: With respect to any Contract required to be repurchased
hereunder, an amount equal to the remaining principal amount outstanding on
such Contract as of the beginning of the Due Period in which such repurchase
occurs plus accrued interest from the Due Date with respect to which the
Obligor last made the entire payment then due to the Due
28
Date (or the latest-occurring Due Date, in the case of a Bi-weekly Contract or
a Semi-Monthly Contract) in the Due Period in which such Contract is
repurchased.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
including any vice president, assistant vice president, secretary or assistant
secretary with direct responsibility for the administration of this Agreement
and any other officer of the Trustee customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
SCHEDULED PRINCIPAL BALANCE: As to any Contract and any Remittance Date
or the Cut-off Date, the principal balance of such Contract as of the Due Date
(or, in the case of a Bi-weekly Contract or a Semi-Monthly Contract, the
latest occurring Due Date) in the Due Period next preceding such Remittance
Date or the Cut-off Date as specified in the Amortization Schedule at the time
relating thereto after giving effect 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.
SEMI-MONTHLY CONTRACT: Any Contract pursuant to which the scheduled level
payment of interest and principal is due twice each month.
SENIOR CERTIFICATE: Any one of the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates or Class A-4 Certificates.
SERVICER: Vanderbilt or its successor in interest or any successor under
this Agreement as provided by Section 8.08.
SERVICING FILE: All documents, records, and other items maintained by the
Servicer with respect to a Contract and not included in the corresponding
Contract File, Land-and-Home Contract File or Mortgage Loan File, as
applicable, including the credit application, credit reports and
verifications, appraisals, tax and insurance records, payment records,
insurance claim records, correspondence, and all historical computerized data
files.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts whose name
appears on a list of servicing officers furnished on the Closing Date to the
Trustee by the Servicer, as such list may from time to time be amended.
S&P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or its successor in interest.
STEP-UP RATE CONTRACT: 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.
SUBORDINATE CERTIFICATE: Any one of the Class A-5 Certificates, Class M-1
Certificates, Class B-1 Certificates or Class B-2 Certificates.
29
SUBSEQUENT CONTRACTS: The Contracts sold to the Trustee or a separate
trustee pursuant to Section 5.20 hereof, which shall be listed on the Contract
Schedule attached to a Subsequent Transfer Agreement.
SUBSEQUENT CUT-OFF DATE: The beginning of business on the date specified
in a Subsequent Transfer Agreement (which shall be August 25, September 25 or
October 25, 2002) with respect to those Subsequent Contracts which are
transferred and assigned to the Trustee or a separate trustee pursuant to the
related Subsequent Transfer Agreement.
SUBSEQUENT TRANSFER AGREEMENT: Each Subsequent Transfer Agreement dated
as of a Subsequent Transfer Date executed by the Trustee and Vanderbilt
substantially in the form of Exhibit M hereto, by which Subsequent Contracts
are sold and assigned to the Trustee or a separate trustee.
SUBSEQUENT TRANSFER DATE: With respect to any Subsequent Transfer, the
date specified as such in the related Subsequent Transfer Agreement.
TRANSFER: As defined in Section 4.08(b).
TRANSFER AFFIDAVIT: As defined in Section 4.08(b).
TRANSFER DATE: With respect to each Initial Contract, the Closing Date;
with respect to each Subsequent Contract, its related Subsequent Transfer
Date.
TRANSFEREE: As defined in Section 4.08(b).
TRUST FUND: The corpus of the trust created by this Agreement, to the
extent described herein, consisting of the Contracts (including, without
limitation, the security interest created thereby), including all rights to
receive payments on the Contracts that have not been received prior to the
Cut-off Date (including any such payments that were due prior to the Cut-off
Date but were not received by Vanderbilt prior to the Cut-off Date); such
assets as shall from time to time be identified as deposited in the
Certificate Account and the Pre-Funding Account; all Manufactured Homes and
any related Mortgaged Properties that secured Contracts not purchased pursuant
to Section 3.05 and that have been acquired in realizing upon such Contracts;
the Mortgages; the Repurchase Obligation; the proceeds of the Hazard Insurance
Policies; and the Limited Guarantee for the benefit of the Class B-2
Certificateholders.
TRUSTEE: JPMorgan Chase Bank, or its successors or assigns or any
successor under this Agreement.
TRUSTEE'S FEES: The fees, expenses and disbursements of the Trustee set
forth in Section 10.05.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction or, in the case of Louisiana, the comparable provisions of
Louisiana law.
UNDERWRITERS: Credit Suisse First Boston Corporation, Bear, ▇▇▇▇▇▇▇ & Co.
Inc. and BB&T Capital Markets, a division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
30
VANDERBILT: Vanderbilt Mortgage and Finance, Inc., a Tennessee
corporation, or its successor in interest or any successor under this
Agreement appointed as herein provided.
WEIGHTED AVERAGE NET CONTRACT RATE: As to any Remittance Date, the per
annum rate equal to (i) the weighted average of the Annual Percentage Rates
borne by the Contracts that were Outstanding Contracts on the first day of the
related Interest Period (weighted on the basis of the respective Scheduled
Principal Balances of the Contracts on the first day of such Interest Period)
less (ii) (x) if Vanderbilt is the Servicer, 0.00% or (y) if Vanderbilt is no
longer the Servicer, 1.25%. For purposes of this calculation, the Contract
Rates in respect of the bi-weekly contracts shall be calculated by reference
to the interest collections in respect of scheduled payments for the Due
Period preceding the remittance date and adjusted to be calculated on the
basis of the actual number of days elapsed and a 360 day year in the case of
the Class A-1V Certificates, and on the basis of an assumed 360 day year
consisting of 12 30-day months in the case of all other Classes of
Certificates.
Section 1.02. Determination of Scheduled Payments. Scheduled payments due
on any Contract shall be determined without giving effect to any adjustments
required by reason of the bankruptcy of the related Obligor or any similar
proceeding or moratorium or any waiver, extension or grace period.
[End of Article I]
31
Article II
CONVEYANCE OF CONTRACTS; TRUST FUND;
PERFECTION OF SECURITY INTEREST;
CUSTODY OF CONTRACTS
Section 2.01. Conveyance of Contracts and Other Rights.
(a) Vanderbilt, concurrently with the execution and delivery hereof, does
hereby transfer, sell, assign, set over and otherwise convey to the Trustee,
as trustee, or in the case of any Initial Contracts from Alaska, California,
Delaware, District of Columbia, Florida, Georgia, Maine, Maryland, Minnesota,
Missouri, Montana, Nevada, Texas, Utah or Washington, a separate trustee,
without recourse (i) all of the right, title and interest of Vanderbilt in and
to the Initial Contracts (including, without limitation, the security
interests created thereby) and any related Mortgages, including all interest
and principal payments that have not been received prior to the Cut-off Date
(including any such payments that were due prior to the Cut-off Date but were
not received by Vanderbilt prior to the Cut-off Date), (ii) all of the rights
under any Hazard Insurance Policy relating to a Manufactured Home securing an
Initial Contract for the benefit of the creditor of such Contract, (iii) all
documents contained in the Contract Files, Land-and-Home Contract Files and
Mortgage Loan Files, if any, (iv) the Certificate Account, the Pre-Funding
Account and all funds and other assets deposited therein and all instruments,
securities (including without limitation, Eligible Investments) or other
property in which the Certificate Account or, the Pre-Funding Account may be
invested in whole or in part from time to time and (v) all proceeds derived
from any of the foregoing.
As of the related Transfer Date, the ownership of each Contract and the
contents of the related Contract File, Land-and-Home Contract File or Mortgage
Loan File, as applicable, and Servicing File are vested in the Trustee, as
trustee, or separate trustee, as the case may be. The contents of each File
and Servicing File are and shall be held in trust by the Servicer for the
benefit of the Trustee or such separate trustee, as the case may be, as the
owner thereof and the Servicer's possession of the contents of each Servicing
File so retained is for the sole purpose of servicing the related Contract,
and such retention and possession by the Servicer is in a custodial capacity
only. The contents of the Land-and-Home Contract Files and the Mortgage Loan
Files, if any, shall be delivered to the Trustee, or a custodian on behalf of
the Trustee, in accordance with Section 2.04 hereof. Neither Vanderbilt nor
the Servicer shall take any action inconsistent with the Trustee's or such
separate trustee's, as the case may be, ownership of the Contracts, and
Vanderbilt and the Servicer shall promptly indicate to all inquiring parties
that the Contracts have been sold, transferred, assigned, set over and
conveyed to the Trustee or such separate trustee, as the case may be, and
shall not claim any ownership interest in the Contracts.
(b) Although the parties intend that the conveyance of Vanderbilt's
right, title and interest in and to the items of property listed in Section
2.01(a) pursuant to this Agreement shall constitute a purchase and sale and
not a loan, if such conveyance is deemed to be a loan, the parties intend that
the rights and obligations of the parties to such loan shall be established
pursuant to the terms of this Agreement. The parties also intend and agree
that Vanderbilt shall be deemed to have granted to the Trustee (including any
separate trustee or co-trustee appointed pursuant to the terms of this
Agreement), and Vanderbilt does hereby grant to the Trustee
32
(including any separate trustee or co-trustee appointed pursuant to the terms
of this Agreement), a perfected first priority security interest in all of the
right, title and interest in, to and under the items of property listed in
Section 2.01(a), including all Contracts, 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 in any Certificates, 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. Vanderbilt acknowledges and
agrees that the provisions of this paragraph shall be applicable to all
Subsequent Contracts to the same extent as to the Initial Contracts from and
after the applicable Subsequent Transfer Date.
Vanderbilt acknowledges and agrees that the conveyance of the Contracts
for the consideration stated in this Agreement is a transfer for sufficient
value and consideration and that the transfer is not an avoidable conveyance
under any applicable state or federal fraudulent conveyance laws.
Section 2.02. Filing; Name Change or Relocation.
(a) On or prior to each respective Transfer Date, the Servicer shall
cause to be filed in the office of the Secretary of State of Tennessee, UCC-1
financing statements describing the Contracts being transferred on such
Transfer Date and naming Vanderbilt as "Seller" and the Trustee (or a separate
trustee) as "Purchaser." Each financing statement shall bear a statement on
the face thereof indicating that the parties intend the financing statement to
evidence a true sale of the Contracts, but that if the transaction is
recharacterized as a loan from the described Purchaser to the described
Seller, the financing statement is to perfect the described Purchaser's
security interest in the Contracts. The Servicer shall cause to be filed all
necessary continuation statements for each of the foregoing UCC-1 financing
statements. From time to time, the Servicer shall take and cause to be taken
such actions and execute such documents as are necessary to perfect and
protect the Certificateholders' interests in the Contracts and their proceeds
and the Manufactured Homes and any related Mortgaged Property 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; provided, however, that Vanderbilt, so long
as it is the Servicer, shall not be required to cause notations to be made on
any document of title relating to any Manufactured Home or to execute any
transfer instrument (including, without limitation, any UCC-3 assignments)
relating to any Manufactured Home (other than a notation or a transfer
instrument necessary to show Vanderbilt as the lienholder or legal title
holder) or to file documents in real property records with respect to a
Manufactured Home or related Contract or any related Mortgaged Property,
absent notice from the Servicer or actual knowledge that such Manufactured
Home (other than a Manufactured Home securing a Land-and-Home Contract) has
become real property under applicable state law; provided that the preceding
proviso shall not have any effect on the representation and warranty in
Section 3.02(k) and Vanderbilt's obligations in respect thereof in Section
3.05; provided, further, that the Servicer (if Vanderbilt is not the Servicer)
shall not be required to protect the Trustee from any liens, claims, charges
or other encumbrances on the Contracts, their proceeds or the Manufactured
Homes created by Vanderbilt or conveyances of the Contracts or their proceeds
by Vanderbilt. Nothing in the preceding sentence shall be construed to limit
the indemnification obligations of the Servicer set forth in Section 10.05
hereof. Vanderbilt agrees to take whatever action is necessary
33
to enable the Servicer to file financing statements and otherwise act to
perfect and protect the Certificateholders' interests in the Contracts, the
Manufactured Homes and any related Mortgage or Mortgaged Property. In
particular, Vanderbilt shall deliver to the Trustee on or before the Closing
Date a power of attorney substantially in the form as Exhibit K hereto,
authorizing the Trustee to, among other things, record assignments of
Mortgages securing Land Secured Contracts. Assuming that Vanderbilt and the
Trustee perform such actions as are required at the direction of the Servicer,
the Servicer will maintain a perfected first priority security interest in
each Manufactured Home and any related Mortgaged Property so long as the
related Contract is the property of the Trust Fund; provided, however, that
Vanderbilt, so long as it is the Servicer, shall not be required to cause
notations to be made on any document of title relating to any Manufactured
Home, to execute any transfer instrument (including, without limitation, any
UCC-3 assignments) relating to any Manufactured Home (other than a notation or
a transfer instrument necessary to show Vanderbilt as lienholder or legal
title holder) or to file documents in real property records with respect to a
Manufactured Home or related Contract or any related Mortgaged Property,
absent notice from the Servicer or actual knowledge that such Manufactured
Home (other than a Manufactured Home securing a Land-and-Home Contract) has
become real property under applicable state law.
(b) During the term of this Agreement, Vanderbilt shall not change its
name, identity, structure or state of incorporation without first giving
notice to the Trustee. If any change in Vanderbilt's name, identity, structure
or state of incorporation 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, Vanderbilt,
no later than five days after the effective date of such change, shall file
such amendments as may be required to preserve and protect the
Certificateholders' interests in the Contracts and proceeds thereof and in the
Manufactured Homes.
(c) Vanderbilt hereby represents and warrants that it is incorporated in
the State of Tennessee.
(d) 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 interest in the
Manufactured Homes granted thereby) and any related Mortgages.
Section 2.03. Acceptance by Trustee. The Trustee hereby acknowledges
conveyance of the Initial Contracts and any related Mortgages to the Trustee,
or a separate trustee, as the case may be, and declares that the Trustee,
directly or through a custodian (which, except with respect to the
Land-and-Home Contracts and the Mortgage Loan Files, shall be the Servicer
pursuant to Section 5.16), holds and will hold such Files in trust for the use
and benefit of all present and future Certificateholders. The Trustee hereby
certifies that although it has not undertaken any independent investigation or
review of any Initial Contract, any Contract File, any Land-and-Home Contract
File, any Mortgage Loan File or any Servicing File, no Responsible Officer of
the Trustee has received written notice or has actual knowledge of (a) any
adverse claim, lien or encumbrance with respect to any Initial Contract, (b)
any Initial Contract being overdue or dishonored, (c) any evidence on the face
of any Initial Contract of any security interest therein
34
adverse to the Trustee's interest, or (d) any defense against or claim against
any Initial Contract by the Obligor or by any other party.
Section 2.04. Delivery of Land-and-Home Contract Files and Mortgage Loan
Files and Recordation.
(a) In connection with the conveyance pursuant to Section 2.01 and the
conveyances contemplated by Section 5.20, with respect to each Land-and-Home
Contract and each Mortgage Loan, if any, Vanderbilt shall (i) enter into a
custodial agreement (the "Custodial Agreement") on the Closing Date
substantially in the form attached hereto as Exhibit A-2 and (ii) deliver or
cause to be delivered the related Land-and-Home Contract Files and Mortgage
Loan Files, as applicable, to the custodian under the Custodial Agreement on
behalf of the Trustee, within 30 days of the applicable Transfer Date in
accordance with such Custodial Agreement. Such delivery of the Files shall be
accompanied by a certificate of delivery signed by Vanderbilt substantially in
the form set forth as Exhibit A to the Custodial Agreement.
(b) In lieu of the items to be recorded and delivered pursuant to
Sections (b), (c) and (e) of the definition of Land-and-Home Contract File and
Sections (a), (b) and (c) of the definition of Mortgage Loan File (the
"Recorded Documents"), if the original Mortgage or assignment has not been
returned by the applicable recording office or is not otherwise available,
Vanderbilt shall provide the custodian with a copy thereof together with an
Officer's Certificate (which may be a blanket Officer's Certificate of
Vanderbilt covering all such Mortgages and assignments) certifying that the
copy is a true and correct copy of the original Mortgage or original
assignment, as applicable, submitted for recording, which will be (1) replaced
by the original Mortgage or original assignment when it is so returned or (2)
if the recording office in the applicable jurisdiction retains the original
Mortgage or original assignment or the original Mortgage or original
assignment has been lost, a copy of such item certified by the applicable
recording office.
(c) Vanderbilt shall deliver each Recorded Document (or if the recording
office in the applicable jurisdiction retains the original Mortgage or
original assignment or the original Mortgage or original assignment has been
lost, a copy of such item certified by the applicable recording office) to the
custodian no later than the earlier of (i) five Business Days after receipt
thereof and (ii) within 180 days of the applicable Transfer Date. In addition,
within that same time period, Vanderbilt shall deliver to the custodian any
other original documents constituting a part of the Files.
(d) Within 30 days of the end of the Funding Period Date and with respect
to the ten states which have the highest concentration of Land-and-Home
Contracts, by Cut-off Date principal balance of the Contract Pool, Vanderbilt
shall deliver an Opinion of Counsel to the Trustee and the Rating Agencies to
the effect that Vanderbilt need not cause to be recorded any assignment which
relates to Land-and-Home Contracts in such states to protect the Trustee's and
the Certificateholders' interest in such Land-and-Home Contracts (a "Non
Recordation Opinion"). Such Opinions of Counsel shall be addressed to the
Trustee and the Rating Agencies. In the event that any Opinion of Counsel
referred to in the preceding sentence is not obtainable with respect to a
state after reasonable effort, then Vanderbilt shall either record the
assignments of mortgage for each Land-and-Home Contract located in such state
or substitute an Eligible
35
Substitute Contract (which would not be a Land-and-Home Contract in such
state) for each Land-and-Home Contract in such state, in each case, within 90
days of the applicable Transfer Date. At the conclusion of the 90 day period,
the aggregate principal balance of Land-and-Home Contracts for which a Non
Recordation Opinion has not been delivered and for which the related
assignments of mortgage have not been recorded shall not exceed 10% of the
total principal balance of the Contract Pool.
Section 2.05. REMIC Election; Designation of Regular and Residual
Interests; Tax Year. Vanderbilt will cause the Trust Fund (other than the
Pre-Funding Account) to elect to be treated as a REMIC. The Class A
Certificates, Class M-1 Certificates and Class B Certificates will constitute
"regular interests" in the REMIC. The Class R Certificate will constitute the
sole class of "residual interest" in the REMIC. The Holder of the Class R
Certificate hereby agrees to pay any taxes assessed against it as holder of
the "residual interest" in the REMIC. The tax year of the Trust Fund shall be
the calendar year, and the Trust Fund shall use the accrual method of
accounting.
Section 2.06. Designation of Startup Day. The Closing Date is hereby
designated as the "startup day" of the REMIC within the meaning of Section
860G(a)(9) of the Code.
Section 2.07. REMIC Certificate Maturity Date. Each of the Class A
Certificates, Class M-1 Certificates and Class B Certificates will be retired
on or before the Remittance Date in October 2035. The foregoing date
represents the date by which the Certificates would be reduced to zero on the
date on which the Initial Contract with the latest maturity date in the
Contract Pool matures plus 37 months.
[End of Article II]
36
Article III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties Regarding Vanderbilt.
Vanderbilt makes the following representations and warranties to the Trustee
and the Certificateholders:
(a) Organization and Good Standing; Licensing. Vanderbilt is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Tennessee and has the corporate power to own its assets
and to transact the business in which it is currently engaged. Vanderbilt 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 Vanderbilt.
Vanderbilt was properly licensed in each jurisdiction at the time of its
purchase or origination, as applicable, of each Contract in such jurisdiction
to the extent required by the laws of such jurisdiction as applied to the
purchase or origination, as applicable, and servicing of such Contract.
(b) Authorization; Binding Obligations. Vanderbilt has the power and
authority to make, execute, deliver and perform this Agreement and perform all
of the transactions contemplated to be performed by it under the 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
Vanderbilt 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. Vanderbilt is not required to obtain the consent
of any other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except such as have been obtained.
(d) No Violations. The execution, delivery and performance of this
Agreement by Vanderbilt will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to Vanderbilt or the
charter or bylaws of Vanderbilt, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Vanderbilt is a
party or by which Vanderbilt 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 Vanderbilt, threatened, against Vanderbilt or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of Vanderbilt have a material
adverse effect on the transactions contemplated by this Agreement.
Section 3.02. Representations and Warranties Regarding Each Contract.
Vanderbilt represents and warrants to the Trustee and the Certificateholders
as to each Initial Contract as of the Closing Date and as to each Subsequent
Contract as of
37
the Subsequent Transfer Date (except as otherwise expressly stated):
(a) Contract Schedule. The information set forth in the Contract Schedule
is true and correct.
(b) Payments. As of the Cut-off Date, no scheduled payment of principal
or interest on any Contract was more than 59 days past due and was not made
directly or indirectly by Vanderbilt on behalf of the Obligor. As of the
Closing Date, Vanderbilt has not taken any material steps toward foreclosure
in respect of any Contract.
(c) No Waivers. The terms of the Contract and any related Mortgage have
not been waived, altered or modified in any respect, except by instruments or
documents identified in the Contract File, the Land-and-Home Contract File or
the Mortgage Loan File, as applicable.
(d) Binding Obligation. The Contract and any related Mortgage 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 and
by general principles of equity.
(e) No Defenses. The Contract and any related Mortgage 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. The Manufactured Home securing the Contract is covered by
a Hazard Insurance Policy in the amount required by Section 5.09. All premiums
due as of the Closing Date on such insurance have been paid in full.
(g) Origination. The Contract was either (i) originated by a manufactured
housing dealer acting, to the best of Vanderbilt's knowledge, in the regular
course of its business and was purchased by Vanderbilt or an Originator in the
regular course of its business, or (ii) originated by Vanderbilt or an
Originator in the regular course of its business.
(h) Lawful Assignment. The Contract and any related Mortgage was not
originated in and is not subject to the laws of any jurisdiction whose laws
would make the transfer or ownership of the Contract under this Agreement or
pursuant to transfers of Certificates unlawful or render the Contract
unenforceable.
(i) Compliance with Law. All requirements of any federal, state or local
law, including, without limitation, usury, truth-in-lending and equal credit
opportunity laws and lender licensing laws, applicable to the Contract and any
related Mortgage have been complied with, and the Servicer 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.
38
(j) Contract in Force. The Contract and any related Mortgage 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 and any related Mortgage in whole or in part.
(k) Valid Security Interest. The Contract, together with any related
Mortgage or certificate of title, creates a valid, subsisting and enforceable
first priority security interest in favor of Vanderbilt in the Manufactured
Home covered thereby and, in the case of a Land-and-Home Contract or a
Mortgage Loan, a first mortgage lien on the related Mortgaged Property; and
the Trustee has a valid and perfected first priority security interest in such
Manufactured Home and, in the case of a Land-and-Home Contract or a Mortgage
Loan, a first mortgage lien on the related Mortgaged Property.
(l) Capacity of Parties. All parties to the Contract and any related
Mortgage had capacity to execute the Contract.
(m) Good Title. Vanderbilt originated or purchased the Contract and any
related Mortgage for value and took possession thereof in the ordinary course
of its business, without knowledge that the Contract was subject to any
security interest. Immediately prior to the transfer of the Contract and any
related Mortgage by Vanderbilt, Vanderbilt 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 and any related Mortgage to the Trustee.
(n) No Defaults. As of the Closing Date, there was no default, breach,
violation or event permitting acceleration existing under the Contract and any
related Mortgage 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). Vanderbilt has not waived any
such default, breach, violation or event permitting acceleration.
(o) No Liens. As of the Closing Date, there are, to the best of
Vanderbilt's knowledge, no liens or claims which have been filed for work,
labor or materials affecting the Manufactured Home or related Mortgaged
Property securing the Contract or the Mortgage Loan, as applicable, which are
or may be liens prior to, or equal or coordinate with, the lien of the
Contract.
(p) Equal Installments. Except for Equity Builder Contracts, each Fixed
Rate Contract has a fixed APR and provides for level monthly, bi-weekly or
semi-monthly payments of principal and interest which fully amortize the loan
over its term. If the Contract is an Adjustable Rate Contract, it has a
variable APR based on the Index. The Contract is an Actuarial Contract.
(q) Enforceability. Each Contract and any related Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the collateral of
the benefits of the security.
(r) One Original. There is only one original executed Contract, and each
original Contract is in the custody of Vanderbilt or otherwise held on behalf
of the Trustee on the Closing Date.
39
(s) Loan-to-Value Ratio. At the time of its origination each Contract had
a Loan-to-Value Ratio not greater than 100%.
(t) Primary Residence. To the best of Vanderbilt's knowledge, at the time
of origination of the Contracts, at least 92% of the Manufactured Homes
securing the Contracts were the related Obligors' primary residences.
(u) Not Real Estate. Except with respect to Land-and-Home Contracts and
Mortgage Loans, the related Manufactured Home is personal property, was
personal property at the time of the execution and delivery of the related
Contract by the parties thereto, and is not and was not, at such time,
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. The related
Manufactured Home is, to the best of Vanderbilt's knowledge, free of damage
and in good repair.
(v) Notation of Security Interest. 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, Vanderbilt or the related Originator 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 or the making of a fixture filing under the UCC is
required to perfect a security interest in manufactured housing, such filings
or recordings have been duly made and show Vanderbilt as secured party. If the
related Manufactured Home secures a Land-and-Home Contract, the related land
securing such Land-and-Home Contract is subject to a Mortgage properly filed
in the appropriate public recording office and naming Vanderbilt as mortgagee.
In each such 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 claiming an interest in such Manufactured Home.
(w) Qualified Mortgage for REMIC. Each Contract is secured by a "single
family residence" within the meaning of Section 25(e)(10) of the Code and is a
"qualified mortgage" under Section 860G(a)(3) of the Code.
(x) Stamping of Contracts. Within seven days after the Closing Date, each
Initial Contract will have been stamped with the following legend: "This
Contract has been assigned to JPMorgan Chase Bank, as Trustee, or a separate
trustee, under the Pooling and Servicing Agreement dated as of July 25, 2002
or to any successor Trustee thereunder." Within seven days after the related
Subsequent Transfer Date, each Subsequent Contract will have been stamped with
the following legend: "This Contract has been assigned to JPMorgan Chase Bank,
as Trustee, or a separate trustee, under the Pooling and Servicing Agreement
dated as of July 25, 2002 or to any successor Trustee thereunder."
(y) [Reserved]
Section 3.03. Representations and Warranties Regarding the Contracts in
the Aggregate. Vanderbilt represents and warrants that:
40
(a) Amounts. The aggregate principal amount payable by Obligors under the
Contracts as of the Cut-off Date (including scheduled principal payments due
before the Cut-off Date but received by Vanderbilt on or after the Cut-off
Date and excluding scheduled principal payments due on or after the Cut-off
Date but received by Vanderbilt prior to the Cut-off Date) equal or exceed the
Initial Principal Amount and each Contract has an APR equal to or greater than
2.750%.
(b) Characteristics. The Initial Contracts have the following
characteristics as of the Cut-off Date: (i) except for Initial Contracts
secured by Manufactured Homes and real estate located in Texas, Tennessee and
North Carolina, not more than 4.91% of the Initial Contracts, by remaining
principal balance, are secured by Manufactured Homes or Mortgaged Properties
and located in any one state; (ii) no Initial Contract has a remaining
maturity of less than 8 months or more than 360 months; (iii) the final
scheduled payment date on the Initial Contract with the latest maturity is
September 1, 2032; (iv) no less than approximately 63.54% of the Initial
Principal Amount is attributable to loans for purchases of Manufactured Homes
or Mortgaged Properties that were new at the time the related Initial
Contracts were originated, no more than approximately 21.76% of the Initial
Principal Amount is attributable to loans for purchases of Manufactured Homes
or Mortgaged Properties that were used at the time the related Initial
Contracts were originated, and no more than approximately 14.71% of the
Initial Principal Amount is attributable to loans for purchases of
Manufactured Homes or Mortgaged Properties that were previously repossessed
and then financed with a new borrower at the time the related Initial
Contracts were originated; (v) no Initial Contract was originated before May
21, 1985; (vi) no more than 6.92% of the Initial Contracts by Cut-Off Date
principal balance are Initial Contracts for which the related land was pledged
in lieu of a down payment or a trade-in; (vii) approximately 10.95% of the
Initial Contracts by Cut-Off Date principal balance are Land-and-Home
Contracts (excluding Mortgage Loans) and no more than 4.24% of the Initial
Contracts by Cut-Off Date principal balance are Mortgage Loans; and (viii)
6.19% of the Initial Contracts by Cut-off Date principal balance is an Equity
Builder Contract.
(c) Computer Tape. The Computer Tape made available by the Servicer as of
the close of business on July 25, 2002 was accurate as of its date and
includes a description of the same Contracts that are described in the
Contract Schedule.
(d) Marking Records. On or before the Closing Date, Vanderbilt will have
caused the portions of the Electronic Ledger relating to the Contracts
constituting part of the Trust Fund to be clearly and unambiguously marked to
indicate that such Contracts constitute part of the Trust Fund and are owned
by the Trust Fund in accordance with the terms of the trust created hereunder.
(e) No Adverse Selection. Except for the effect of the representations
and warranties made in Section 3.02 and 3.03 and the effect of the
geographical distribution of the Manufactured Homes, no adverse selection
procedures have been employed in selecting the Contracts.
Section 3.04. Representations and Warranties Regarding the Contract
Files, the Land-and-Home Contract Files and the Mortgage Loan Files.
Vanderbilt represents and warrants that:
41
(a) Possession. Immediately prior to the Closing Date, the Servicer will
have possession of each original Initial Contract and the remainder of the
related Contract File. In addition, the Servicer will have possession of the
Servicing Files with respect to each Initial Contract, including each
Land-and-Home Contract and each Mortgage Loan. There are and there will be no
custodial agreements in effect materially and adversely affecting the right of
Vanderbilt to make, or to cause to be made, any delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts, the Contract Files, the Land-and-Home Contract Files and the
Mortgage Loan Files by Vanderbilt pursuant to this Agreement are not subject
to the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
Section 3.05. Repurchases of Contracts or Substitution of Contracts for
Breach of Representations and Warranties.
(a) Vanderbilt shall either (i) repurchase a Contract at its Repurchase
Price, or (ii) if Vanderbilt is able to satisfy the conditions of Section
3.05(b), remove a Contract from the Trust Fund and substitute therefor an
Eligible Substitute Contract in accordance with and subject to the limitations
of Section 3.05(b), in each case not later than one Business Day after the
first Determination Date which is more than 90 days after Vanderbilt becomes
aware, or receives written notice from the Servicer or the Trustee, of a
breach of a representation or warranty of Vanderbilt set forth in Sections
3.02 or 3.03 of this Agreement that materially adversely affects the Trust
Fund's interest in such Contract, unless such breach has been cured; provided,
however, that with respect to any Contract incorrectly described on the
Contract Schedule with respect to unpaid principal balance, which Vanderbilt
would otherwise be required to repurchase pursuant to this Section, Vanderbilt
may, in lieu of repurchasing such Contract, deposit in the Certificate Account
not later than one Business Day after such Determination Date cash in an
amount sufficient to cure such deficiency or discrepancy; and provided,
further, that with respect to a breach of a representation or warranty
relating to the Contracts in the aggregate and not to each particular
Contract, Vanderbilt may select Contracts to repurchase or substitute for such
that, had such Contracts not been included as part of the Contract Pool and
after giving effect to such substitution, if any, there would have been no
breach of such representation or warranty. It is understood and agreed that
the obligation of Vanderbilt to repurchase or substitute for any Contract as
to which a breach of a representation or warranty set forth in Section 3.02 or
3.03 of this Agreement has occurred and is continuing shall constitute the
sole remedy respecting such breach available to the Certificateholders or the
Trustee; provided, however, that Vanderbilt shall defend and indemnify the
Trustee, the Trust Fund and Certificateholders against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or suffered by any of them
as a result of third-party claims arising out of any breach of a
representation or warranty set forth in Section 3.02 or 3.03. Nothing in the
preceding sentence shall be construed to limit the indemnification obligations
of the Servicer set forth in Section 10.05 hereof. Notwithstanding any other
provision of this Agreement, the obligation of Vanderbilt under this Section
shall not terminate upon an Event of Default and the indemnification
obligation of the Servicer in this Section shall survive the resignation or
removal of the Trustee and the termination of this Agreement.
42
Notwithstanding any other provision of this Agreement to the contrary,
any amount received on or recovered with respect to repurchased Contracts or
Replaced Contracts during or after the Due Period in which such repurchase
occurs shall be the property of Vanderbilt and need not be deposited in the
Certificate Account.
Notwithstanding the foregoing, Vanderbilt shall not deposit cash into the
Certificate Account pursuant to this Section 3.05 after the end of the three
month period beginning on the Closing Date unless it shall first have obtained
an Opinion of Counsel to the effect that such deposit will not give rise to
any tax under Section 860F(a)(1) of the Code or Section 860G(d) of the Code.
Any such deposit shall not be invested. If Vanderbilt is required to purchase
such Contract (or deposit cash in the Certificate Account), Vanderbilt shall
guarantee the payment of any tax under Section 860F(a)(1) of the Code or under
Section 860G(d) of the Code 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 5.17 hereof are insufficient to pay such tax and all other
taxes chargeable under Section 5.17. If a payment of tax by Vanderbilt is
required in connection with a repurchase, Vanderbilt shall give the Trustee
notice of such tax and the amount of such tax and the date by which Vanderbilt
shall provide funds to the Trustee to cover such tax. The Trustee shall hold
any amount paid to it pursuant to the preceding sentence in an account that is
not part of the Trust Fund. The Servicer shall give notice to the Trustee at
the time of such repurchase of the amounts due from Vanderbilt pursuant to the
guarantee of Vanderbilt 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 Vanderbilt 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 Servicer.
In the event any tax that is guaranteed by Vanderbilt is refunded to the
Trust Fund or otherwise is determined not to be payable, Vanderbilt shall be
repaid the amount of such refund or that portion of any guarantee payment made
by Vanderbilt that is not applied to the payment of such tax.
Notwithstanding the above provisions of this Section 3.05(a), Vanderbilt
shall not be required to repurchase or substitute for any Contract on account
of a breach of the representation or warranty contained in Section 3.02(k) or
(v) solely on the basis of failure by Vanderbilt to cause notations to be made
on any document of title relating to any Manufactured Home or to execute any
transfer instrument relating to any Manufactured Home (other than a notation
or a transfer instrument necessary to show Vanderbilt as lienholder or legal
title holder) unless (i) a court of competent jurisdiction has adjudged that,
because of such failure, the Trustee does not have a perfected first-priority
security interest in the related Manufactured Home or (ii) (A) the Servicer
has received written advice of counsel (with a copy to the Trustee) to the
effect that a court of competent jurisdiction has held that, solely because of
a substantially similar failure on the part of a pledgor or assignor of
manufactured housing contracts (who has perfected the assignment or pledge of
such contracts), a perfected first-priority security interest was not created
in favor of the pledgee or assignee (as the case may be) in a related
manufactured home which is located in such jurisdiction and which is subject
to the same laws regarding the
43
perfection of security interest therein as apply to Manufactured Homes located
in such jurisdiction, and (B) the Servicer shall not have completed all
appropriate remedial action with respect to such Manufactured Home within 180
days after receipt of such written advice. Any such advice shall be from
counsel selected by the Servicer on a non-discriminatory basis from among the
counsel used by the Servicer in its general business in the jurisdiction in
question. The Servicer shall have no obligation on an ongoing basis to seek
any advice with respect to the matters described in clause (ii) above.
However, the Servicer shall seek advice with respect to such matters whenever
information comes to the attention of its General Counsel which causes such
General Counsel to determine that a holding of the type described in clause
(ii) (A) might exist.
(b) On or prior to the date that is the second anniversary of the Closing
Date, Vanderbilt, at its election, may substitute one or more Contracts for a
Contract that it is obligated to repurchase pursuant to Section 3.05(a) (such
Contract being referred to as the "Replaced Contract") upon satisfaction of
the following conditions:
(i) each Contract to be substituted for the Replaced Contract is an
Eligible Substitute Contract and Vanderbilt delivers an Officer's
Certificate, substantially in the form of Exhibit F hereto, to the
Trustee certifying that such Contract is an Eligible Substitute Contract,
describing in reasonable detail how such Contract satisfies the
definition of the term "Eligible Substitute Contract" (as to satisfaction
of representations and warranties, such description shall be that such
Contract satisfies such representations and warranties) and certifying
that (a) the Contract File for such Contract is in the possession of the
Servicer or (b) the Land-and-Home Contract File or the Mortgage Loan File
for such Contract is in the possession of a custodian acting on behalf of
the Trustee;
(ii) Vanderbilt shall have delivered to the Trustee evidence of
filing with the appropriate office in Tennessee of a UCC-1 financing
statement describing such Contract executed by Vanderbilt as seller,
naming the Trustee as purchaser and bearing the statement set forth in
Section 2.02(a);
(iii) Vanderbilt shall have delivered to the Trustee an Opinion of
Counsel (a) to the effect that the substitution of such Contract for such
Replaced Contract will not cause the Trust Fund 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 that 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 Tennessee, naming Vanderbilt as
debtor and the Trustee as secured party, and the filing of continuation
statements as required by Section 2.02(a) of this Agreement, is necessary
to perfect as against third parties the conveyance of the Contracts by
Vanderbilt to the Trustee; and
(iv) if the aggregate of the Scheduled Principal Balances of the
Replaced Contracts, if any, is greater than the Scheduled Principal
Balances of the Contracts substituted for such Replaced Contracts,
Vanderbilt shall have deposited in the Certificate Account the amount of
such excess and shall have included in the Officer's Certificate required
by clause (i) above a certification that such deposit has been made.
44
Upon satisfaction of such conditions, the Servicer shall add each such
Contract to, and delete each such Replaced Contract from (or cause such
addition and deletion to be accomplished), the Contract Schedule and shall
deliver a copy of such amended Contract Schedule to the Trustee. Such
substitution shall be effected prior to the first Determination Date that
occurs more than 90 days after Vanderbilt becomes aware, or receives written
notice from the Servicer or the Trustee, of the breach referred to in Section
3.05(a).
(c) Promptly after the repurchase referred to in Section 3.05(a) or the
substitution referred to in Section 3.05(b), the Trustee shall execute such
documents as are presented to it by Vanderbilt and are reasonably necessary to
reconvey, without recourse, representation or warranty, the repurchased
Contract or Replaced Contract, as the case may be, to Vanderbilt.
[End of Article III]
45
Article IV
THE CERTIFICATES
Section 4.01. The Certificates. The Class A, Class M-1, Class B and Class
R Certificates shall be substantially in the forms annexed hereto as Exhibit
▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit C and Exhibit D, respectively, and Exhibit E
(reverse of all Certificates), with such immaterial changes as Vanderbilt
deems appropriate, and on original issue, shall be executed by manual or
facsimile signature at the written direction of Vanderbilt by an authorized
officer of the Trustee, countersigned by the Trustee and delivered to or upon
the written order of Vanderbilt. The Class A-1F Certificates, Class A-1V
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class M-1 Certificates, Class B-1
Certificates and Class B-2 Certificates shall each be evidenced initially by
single certificates representing $30,000,000, $101,726,000, $120,364,000,
$64,300,000, $96,110,000, $22,500,000, $20,000,000, $18,750,000, and
$26,250,000, respectively, in initial aggregate principal balance, beneficial
ownership of such Certificates to be held through Book-Entry Certificates. The
Class R Certificate shall initially be held in the name of Vanderbilt SPC,
Inc. Each Certificate other than the Class R Certificate shall be issued in
minimum dollar denominations of $50,000 and integral dollar multiples of $1 in
excess thereof. Upon original issuance, the sum of the denominations of each
Class of the Class A-1F Certificates, Class A-1V Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class M-1 Certificates, Class B-1 Certificates and Class B-2
Certificates, as the case may be, shall equal the Original Class A-1F
Principal Balance, the Original Class A-1V Principal Balance, the Original
Class A-2 Principal Balance, the Original Class A-3 Principal Balance, the
Original Class A-4 Principal Balance, the Original Class A-5 Principal
Balance, the Original Class M-1 Principal Balance, the Original Class B-1
Principal Balance and the Original Class B-2 Principal Balance, respectively.
The Class R Certificate shall not have a principal balance.
The Certificates shall be countersigned by manual signature on behalf of
the Trustee by one of its authorized officers or its Authenticating Agent
pursuant to Section 4.07 at the written direction of Vanderbilt. 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 countersignature
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 there appears on such
Certificate a manual countersignature by the Trustee or its Authenticating
Agent and such countersignature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
countersigned and delivered hereunder. All Certificates shall be dated the
date of their countersignature.
The rights of the Certificateholders to receive payments with respect to
the Trust Fund in respect of the Certificates, and all ownership interests of
the Certificateholders in such payments, shall be as set forth in this
Agreement.
46
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at its Corporate Trust Office or,
at the election of the Trustee, at the office of its designated agent in New
York City, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided.
(b) Subject to Section 4.02(c) and the other provisions of this Section,
upon surrender for registration of transfer of any Certificate at any office
or agency of the Trustee maintained for such purpose, the Trustee shall
execute, countersign and deliver, in the name of the designated transferee or
transferees, a Certificate of a like aggregate Percentage Interest and dated
the date of countersignature by the Trustee or its Authenticating Agent. No
transfer of an ERISA Restricted Certificate that is a Definitive Certificate
shall be made unless the Trustee shall have received either (i) a written
representation from the proposed transferee to the effect that it is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or a person acting on behalf of any such plan or using the assets of any
such plan to effect such transfer, (ii) except in the case of a Class R
Certificate, if the purchaser is an insurance company, a written
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general
account" (as such term is defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60") and that the purchase and holding of such
Certificates are covered under Section I and III of PTCE 95-60 or (iii) in the
case of any such ERISA Restricted Certificate presented for registration in
the name of an employee benefit plan subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee, which
Opinion of Counsel shall not be an expense of either the Trustee, the Trust
Fund, Vanderbilt or the Servicer, addressed to the Trustee, to the effect that
the purchase or holding of such Certificate will not result in the assets of
the Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability financial or otherwise. For purposes of the preceding
sentence, with respect to an ERISA Restricted Certificate that is a Book-Entry
Certificate, in the event the representation letter referred to in the
preceding sentence is not furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of the Certificates. Notwithstanding anything else to
the contrary herein, any purported transfer of an ERISA Restricted Certificate
to or on behalf of an employee benefit plan subject to ERISA or to the Code
without the delivery to the Trustee of an Opinion of Counsel satisfactory to
the Trustee as described above shall be void and of no effect.
Each Private Certificate shall bear a legend substantially to the
following effect:
"THIS CLASS [ ] CERTIFICATE HAS NOT BEEN 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 OR
LAWS OR
47
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 [WITH
RESPECT TO CLASS R: SECTION 4.08] OF THE AGREEMENT REFERRED TO HEREIN."
No transfer of a Private Certificate shall be made unless such transfer
is made pursuant to an effective registration statement or in accordance with
an exemption from the requirements under the Securities Act of 1933, as
amended, or any applicable state securities laws. If such a transfer is to be
made in reliance upon an exemption from said Act and laws, prior to the
registration of any such transfer (i) the Trustee or Vanderbilt may require a
written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and Vanderbilt that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee,
Vanderbilt or the Servicer, and (ii) the Trustee shall require the transferee
to execute a certification, substantially in the form of Exhibit I hereto,
acceptable to and in form and substance satisfactory to Vanderbilt and the
Trustee setting forth the facts surrounding such transfer; provided that such
Opinion of Counsel shall not be required in the case of transfers by or to
Vanderbilt SPC, Inc. Such Opinions of Counsel shall not be an expense of the
Trustee, Vanderbilt or the Servicer. If a transfer of a Private Certificate is
to be made pursuant to an effective registration statement, prior to
registration of any such transfer, the transferor shall surrender such Private
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose. Whenever such Private Certificate is so surrendered for
exchange, the Trustee or its Authenticating Agent shall execute, countersign
and deliver, a Certificate or Certificates which does not include the legend
set forth in the preceding paragraph. Each such Certificate which is also a
Book-Entry Certificate shall include the legend set forth Section 4.03(g) and
shall be delivered to the Depository.
(c) At the option of the Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of the same Class and of
authorized denominations of the same aggregate denomination, upon surrender of
the Certificate to be exchanged at any office or agency of the Trustee
maintained for such purpose. Whenever the Certificate is so surrendered for
exchange, the Trustee or its Authenticating Agent shall execute, countersign
and deliver, the Certificate or Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange (if so required by the
Trustee) shall be duly endorsed by, or be accompanied by a written instrument
of transfer in the form satisfactory to the Trustee or the Certificate
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing.
(d) No service charge shall be made to the Holder for any registration of
transfer or exchange of a Certificate, but the Trustee may require payment of
a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of such Certificate.
48
(e) All Certificates surrendered for registration of transfer or exchange
shall be held in accordance with the retention policy of the Trustee.
(f) Except as provided in paragraph (g) 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) transfer of the Book-Entry
Certificates may not be registered by the Trustee except to another
Depository; (ii) the Depository shall maintain book-entry records with respect
to the Certificate Owners and with respect to ownership and transfers of such
Book-Entry Certificates; (iii) ownership and transfers of registration of the
Book-Entry Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iv) the Depository may
collect its usual and customary fees, charges and expenses from its Depository
Participants; (v) the Trustee shall deal only with the Depository and its
nominee, which, in the case of the initial Depository, shall be Cede & Co., as
registered Holder 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 Persons shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (vi) the Trustee may
conclusively 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.
(g) If (x)(i) Vanderbilt or the Depository advises the Trustee in writing
that the Depository is no longer willing, qualified or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee and
Vanderbilt are unable to locate a qualified successor, (y) Vanderbilt at its
option advises the Trustee in writing that it elects to terminate the
book-entry system through the Depository and obtains the consent of the
Trustee and the Servicer to such termination, or (z) after the occurrence of
an Event of Default, the Depository notifies the Trustee that Certificate
Owners representing Fractional Interests aggregating not less than 51% of the
aggregate Fractional Interests of the Book-Entry Certificates together have
advised the Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall send notice to the
Depository for distribution to the Certificate Owners, of the occurrence of
any such event and of the availability of definitive, fully registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration
of transfer, the Trustee shall countersign the Definitive Certificates.
Neither Vanderbilt nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be fully
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,
49
to the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(h) On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1F Certificate, Class A-1V Certificate, one Class A-2
Certificate, one Class A-3 Certificate, one Class A-4 Certificate, one Class
A-5 Certificate, one Class M-1 Certificate, one Class B-1 Certificate and one
Class B-2 Certificate in registered form registered in the name of the
Depository's nominee, Cede & Co., the total face amount of each of which
represents 100% of the Original Class A-1F Principal Balance, 100% of the
Original Class A-1V Principal Balance, 100% of the Original Class A-2
Principal Balance, 100% of the Original Class A-3 Principal Balance, 100% of
the Original Class A-4 Principal Balance, 100% of the Original Class A-5
Principal Balance, 100% of the Original Class M-1 Principal Balance, 100% of
the Original Class B-1 Principal Balance and 100% of the Original Class B-2
Principal Balance, respectively. Each Certificate registered in the name of
the Depository shall bear the following legend:
"Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its
agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein."
(i) All transfers of a Class R Certificate shall be made in accordance
with Section 4.08.
(j) In order to assure the inapplicability of certain prohibitions
imposed by Section 406(b)(1) and (2) of ERISA and Section 4975(a)(1)(E) of the
Code in connection with the initial issuance of the Certificates, each Plan or
person using Plan Assets that acquires Certificates from the Underwriters or
from Vanderbilt or any of its affiliates shall be deemed to represent and
warrant that no person who has discretionary authority or renders investment
advice with respect to such acquisition (and no affiliate of such a person) is
an obligor with respect to any of the Contracts.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificate. If (i)
any mutilated Certificate is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and any Certificate
Registrar such security or indemnity as may be required by it to save each of
them harmless, then, in the absence of notice to a Responsible Officer of the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the
same Class and of like tenor and denomination. Upon the issuance of any new
Certificate under this Section, 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
replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the destroyed, lost or stolen Certificate
shall be found at any time.
Section 4.04. Persons Deemed Owners. Vanderbilt, the Servicer, the
Certificate Registrar, the Trustee and any Paying Agent may treat the Person
in whose name any Certificate is registered as the owner of such Certificate
for the purpose of receiving payments pursuant to Section 6.01 and for all
other purposes whatsoever, and none of Vanderbilt, the Servicer, any Paying
Agent, the Certificate Registrar nor the Trustee shall be affected by notice
to the contrary.
Section 4.05. Appointment of Paying Agent. The Trustee may appoint a
Paying Agent for the purpose of making distributions to Certificateholders
pursuant to Section 6.01 and
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payments pursuant to Section 5.17. Any Paying Agent or its parent company so
appointed either shall be a bank or trust company or shall have a rating
acceptable to the Rating Agencies. In the event of any such appointment, on or
prior to each Remittance Date, the Trustee shall deposit or cause to be
deposited with the Paying Agent, from amounts in each Certificate Account, a
sum sufficient to make the payments to the related Certificateholders in the
amounts and in the manner provided for in Section 6.01, such sum to be held in
trust for the benefit of the related Certificateholders. The Trustee initially
appoints itself as Paying Agent.
The Trustee shall cause each Paying Agent (other than itself) to execute
and deliver to the Trustee an instrument in which such Paying Agent shall
agree with the Trustee that such Paying Agent is at all times acting as agent
for the Trustee and such Paying Agent will hold all sums held by it for the
payment to Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders.
Section 4.06. Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar will furnish to the Trustee (if the Trustee is not
the Certificate Registrar), Vanderbilt and the Servicer within five days after
receipt by the Certificate Registrar of a written request therefor from the
Trustee, Vanderbilt or the Servicer a list, in such form as the Trustee,
Vanderbilt or the Servicer reasonably may require, of the names and addresses
of the Certificateholders as of the most recent Record Date. If Holders of
Certificates of any Class evidencing, as to such Class, aggregate Percentage
Interests of 25% or more (the "Applicants") apply in writing to the Trustee,
and such application states that the Applicants desire to communicate with
other Certificateholders of such Class with respect to their rights under this
Agreement or under the Certificates of such Class and is accompanied by a copy
of the communication which such Applicants propose to transmit, then the
Trustee, within five Business Days after the receipt of such application,
shall afford such Applicants access during normal business hours to the most
recent list of Certificateholders of such Class 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 promptly shall request from the Certificate
Registrar a current list as provided above, and shall afford such Applicants
access to such list during normal business hours promptly upon receipt. Every
Certificateholder, by receiving and holding a Certificate, agrees with the
Certificate Registrar and the Trustee that neither the Servicer, the
Certificate Registrar, Vanderbilt nor 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 4.07. Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates. For all purposes
of this Agreement, the execution and delivery of Certificates by the
Authenticating Agent pursuant to this Section shall be deemed to be the
execution and delivery of Certificates "by the Trustee."
Section 4.08. Class R Certificate.
(a) The Class R Certificate shall not be assigned or transferred except
in accordance with this Section 4.08 and any other applicable provision of
this Agreement.
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(b) Each Person who has or acquires any Ownership Interest (as defined
below) in the Class R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest in such Class R Certificate to have
agreed to be bound by the following provisions and to have irrevocably
appointed the Servicer as its attorney-in-fact to negotiate the terms of any
mandatory sale under clause (vi) below and to execute all instruments of
transfer and to do all other things necessary in connection with any such
sale, and the rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee (as defined below)
and shall promptly notify the Servicer and the Trustee in writing of any
change or impending change in its status as a Permitted Transferee.
(ii) Any Ownership Interest in a Class R Certificate may not be
subject to a Transfer (as defined below) without the express written
consent of the Servicer (with a copy to the Trustee), and the Trustee
shall not recognize the Transfer (as defined below) of such Class R
Certificate, and such proposed Transfer shall not be effective, without
such consent with respect thereto. In connection with any proposed
Transfer of any Ownership Interest in a Class R Certificate, the Servicer
shall, as a condition to such consent, require delivery to it, in form
and substance satisfactory to it, and the proposed Transferee shall
deliver to the Servicer and the Trustee, the following:
(A) an affidavit (a "Transfer Affidavit") of the proposed
Transferee in the form attached as Exhibit H hereto; and
(B) an express agreement by the proposed Transferee to be bound
by and to abide by the provisions of this Section.
The Servicer shall notify the Trustee in writing of any such Transfer to
which it consents.
(iii) Notwithstanding the delivery of a Transfer Affidavit by a
proposed Transferee under clause (ii) above, if the Servicer or a
Responsible Officer of the Trustee has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of any Ownership
Interest in a Class R Certificate to such proposed Transferee shall be
effected.
(iv) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to require a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer any Ownership
Interest in such Class R Certificate and (B) not to Transfer any
Ownership Interest in such Class R Certificate or to cause the Transfer
of any Ownership Interest in such Class R Certificate to any other Person
if it has actual knowledge that such Person is not a Permitted
Transferee.
(v) Any attempted or purported Transfer of any Ownership Interest in
a Class R Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported Transferee shall become the holder
of an Ownership Interest in a Class R Certificate in violation of the
provisions of this Section, then, upon discovery by a Responsible Officer
of the
52
Trustee of, or due notification to the Trustee that the recognition of
the Transfer of such Ownership Interest in such Class R Certificate was
not in fact permitted by this Section, the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive
to the date of Transfer of such Ownership Interest in such Class R
Certificate. The Trustee shall promptly notify the Servicer if it
discovers or receives notice of such an impermissible Transfer. The
Trustee shall be under no liability to any Person for permitting the
Transfer of an Ownership Interest in a Class R Certificate that is in
fact not permitted by this Section or for making any payments in respect
of a Class R Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement so
long as the Transfer was made with the express prior written consent of
the Servicer. The Trustee shall be entitled but not obligated to recover
from any Holder of a Class R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as
it became other than a Permitted Transferee, all payments made on such
Class R Certificate at and after such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Class R Certificate.
(vi) If any purported Transferee shall be a Holder of a Class R
Certificate in violation of the restrictions in this Section, then the
Servicer shall have the right without notice to the Holder or any prior
Holder of such Class R Certificate to sell such Class R Certificate to a
purchaser selected by the Servicer on such terms as the Servicer may
choose. Such purchaser may be the Servicer itself or any Affiliate of the
Servicer. The proceeds of such sale, net of commissions (which may
include commissions payable to the Servicer or its Affiliates), expenses
and taxes due, if any, will be remitted by the Servicer to the last
preceding Permitted Transferee of such Class R Certificate, except that
in the event that the Servicer determines that the Holder or any prior
Holder of such Class R Certificate will be liable for any amount due
under this Section or any other provisions of this Agreement, the
Servicer shall so inform the Trustee in writing, and the Trustee shall
withhold a corresponding amount from such remittance as security for such
claim, and shall incur no liability to any Person for doing so. The terms
and conditions of any sale under this clause (vi) shall be determined in
the sole discretion of the Servicer, and it shall not be liable for the
exercise of such discretion to any Person holding or purporting to hold a
Class R Certificate.
Upon notice to the Servicer that any legal or beneficial interest in any
portion of a Class R Certificate has been transferred, either directly or
indirectly, to any Person that is not a Permitted Transferee or an agent
thereof (including a broker, nominee, or middleman) in contravention of the
foregoing restrictions, or that is a pass-through entity, as defined in
Section 860E(e)(6) of the Code, an interest in which is held of record by a
Person that is not a "Permitted Transferee," the Servicer agrees to furnish to
the Internal Revenue Service and those Persons specified in Section 860E(e)(5)
of the Code such information necessary to the application of Section 860E(e)
of the Code as may be required by the Code, including but not limited to, the
present value of the total anticipated excess inclusions with respect to such
Class R Certificate (or portion thereof) for periods after such Transfer and
the total excess inclusions for any taxable year allocable to any holder of an
interest in such pass-through entity which is not a Permitted Transferee. At
the election of the Servicer, the Servicer may charge a reasonable fee for
computing and furnishing such information to the transferor or to such agent
or to such pass-
53
through entity referred to above; however, the Servicer shall in no event be
excused from furnishing such information to the Internal Revenue Service. The
foregoing restrictions on transfer contained in this Section 4.08(b) shall
cease to apply to Transfers occurring on or after the date on which there
shall have been delivered to the Trustee, Vanderbilt and the Servicer, in form
and substance satisfactory to the Servicer, an Opinion of Counsel that
eliminating such restrictions will not cause the Trust Fund to fail to qualify
as a REMIC at any time while the Certificates are outstanding.
"Ownership Interest" means any legal or beneficial, direct or indirect,
ownership or other interest.
"Permitted Transferee" means any Person other than (a) the United States,
a State or any political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than
an instrumentality that is a corporation if all of its activities are subject
to tax and, except for the Federal Home Loan Mortgage Corporation, a majority
of its board of directors is not selected by any such governmental unit), (b)
a foreign government, international organization or agency or instrumentality
of either of the foregoing (other than an instrumentality that is a
corporation if all of its activities are subject to tax and a majority of its
board of directors is not selected by any such governmental unit), (c) an
organization which is exempt from tax imposed by Chapter 1 of the Code
(including the tax imposed by Code Section 511 on unrelated business taxable
income) on any excess inclusions (as defined in Code Section 860E(c)(1)) with
respect to a Class R Certificate (except certain farmers' cooperatives
described in Code Section 521), (d) rural electric and telephone cooperatives
described in Code Section 1381(a)(2), (e) a Non-U.S., Person, (f) an "electing
large partnership" within the meaning of Section 775 of the Code, (g) or a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of a U.S. Person and (h) any other Person so
designated by the Servicer based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class R Certificate to such Person may cause the
Trust Fund to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in Code Section 7701 or
successor provisions. A "Non-U.S. Person" means an individual, corporation,
partnership or other entity which is not a "U.S. Person."
A "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity treated as a corporation or
partnership for United States federal income tax purposes organized in or
under the laws of the United States or any state thereof or the District of
Columbia (other than a partnership that is not treated as a United States
person under any applicable Treasury regulations) or (iii) an estate the
income of which is includible in gross income for United States tax purposes,
regardless of its source, or (iv) a trust if a court within the United States
is able to exercise primary supervision over the administration of the trust
and one or more United States persons have authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to
the extent provided in regulations, certain trusts in existence on August 20,
1996 and treated as United States persons prior to such date that elect to
continue to be treated as United States persons shall be considered United
States persons as well.
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"Transfer" means any direct or indirect transfer or sale of any Ownership
Interest in a Class R Certificate.
"Transferee" means any Person who is acquiring by Transfer any Ownership
Interest in a Class R Certificate.
(c) Except as otherwise provided herein, a Class A-5, Class M-1, Class
B-1 or Class B-2 Certificate shall not be registered in the name of Vanderbilt
or any Affiliate thereof, unless the Trustee shall first have received written
notification from the Rating Agencies that such Transfer will not cause a
reduction or withdrawal of the rating then assigned to any of the
Certificates.
[End of Article IV]
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Article V
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 5.01. Responsibility for Contract Administration and Servicing.
The Servicer shall service and administer the Contracts and, subject to the
terms of this Agreement, shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such
servicing and administration. Subject to Section 5.02, without limiting the
generality of the foregoing, the Servicer hereby is authorized and empowered
when the Servicer believes it appropriate in its best judgment, to execute and
deliver, on behalf of the Certificateholders and the Trustee or any of them,
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Contracts and any related Mortgages and with respect to the Manufactured Homes
and any related Mortgaged Property. The Trustee shall execute and deliver to
the Servicer any powers of attorney and other documents prepared by the
Servicer and certified to the Trustee as being necessary or appropriate to
enable the Servicer to service and administer the Contracts. Such power of
attorney shall be in the form of Exhibit L hereto.
The Servicer may perform its servicing and administration functions, as
Servicer, pursuant to this Agreement through one or more subservicers. All
actions by any subservicer with respect to the servicing and administration of
the Contracts shall be treated as though done by the Servicer itself. All
documents, instruments or contracts executed by any subservicer on behalf of
the Servicer shall be treated by the Trustee as though executed by the
Servicer itself. The Servicer shall remain primarily liable for all actions of
any subservicer.
Section 5.02. Standard of Care. In managing, administering, servicing and
making collections on the Contracts pursuant to this Agreement, the Servicer
will exercise the same degree of skill and care, consistent with the terms of
this Agreement, that the Servicer exercises with respect to similar
manufactured housing contracts owned and serviced by the Servicer but in no
event shall such standard be lower than the standard prevailing in the
industry; provided, however, that notwithstanding the foregoing, the Servicer
shall not release or waive the right to collect the unpaid balance on any
Contract; provided further that nothing herein shall require the Servicer to
violate any applicable law.
Section 5.03. Records. The Servicer, during the period it is servicer
hereunder, shall maintain such books of account and other records as will
enable the Trustee (if the Trustee so elects) to determine the status of each
Contract. Without limiting the generality of the preceding sentence, the
Servicer shall keep such records in respect of Liquidation Expenses as will
enable the Trustee (if the Trustee so elects) to determine that the correct
amount of Net Liquidation Proceeds in respect of a Liquidated Contract has
been deposited in the related Certificate Account.
Section 5.04. Inspection.
(a) At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business
hours to the Servicer's records relating to the Contracts and will cause its
personnel to assist in any examination of such records
56
by the Trustee or any of its authorized agents. The examination referred to in
this Section will be conducted in a manner which does not interfere
unreasonably with the Servicer's normal operations or customer or employee
relations. Without otherwise limiting the scope of the examination the Trustee
may make, the Trustee or its authorized agents, using generally accepted audit
procedures, may in their discretion verify the status of each Contract and
review the records relating thereto for conformity to Monthly Reports prepared
pursuant to Article VII 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 Contract Schedule at its principal executive office
for inspection by Certificateholders.
(c) On or before each Determination Date, the Servicer will, upon the
written request of the Trustee, provide to the Trustee a list of outstanding
Contracts, setting forth the principal balance of each such Contract as of the
Due Period immediately preceding such Determination Date.
(d) Notwithstanding the provisions of this Section 5.04, the Trustee
shall at no time have any duty or obligation to examine any records of the
Servicer or to recalculate or otherwise verify the accuracy of any certificate
or report prepared by the Servicer (including certificates or reports as to
the amount required to be deposited into the Certificate Account), and no
implied duty to do so shall be asserted against the Trustee.
Section 5.05. Establishment of and Deposits in the Certificate Account.
On or before the Closing Date, the Trustee shall have established, and
thereafter shall maintain, a Certificate Account which is an Eligible Account,
in the form of one or more separate custodial accounts, titled "Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates, 2002-B
(Vanderbilt Mortgage and Finance, Inc., Seller), in trust for the Trustee."
The Trustee shall cause monies in the Certificate Account to be invested in
Eligible Investments as directed in writing by the Servicer, which shall
mature or, in the case of a money market fund, be redeemed not later than the
Business Day immediately preceding the Remittance Date next following the date
of such investment (except that if such Eligible Investment is an obligation
of the institution that maintains the Certificate Account, then such Eligible
Investments shall mature or, in the case of a money market fund, be redeemed
not later than such Remittance Date) and shall not be sold or disposed of
prior to its maturity. All such Eligible Investments shall be made in the name
of the Trustee. The Servicer shall promptly notify the Trustee upon obtaining
knowledge that an instrument or account in which the Certificate Account is
invested has ceased to be an Eligible Investment or Eligible Account. All net
income and gain realized from any such investments, to the extent provided by
this Agreement, shall be added to the Certificate Account. If a selection is
not made and a written direction not given to the Trustee, funds shall remain
uninvested in a segregated non-interest bearing account with no liability for
interest thereon.
The Servicer shall deposit in the Certificate Account, as promptly as
practicable (but not later than the close of business of the second Business
Day) following receipt thereof:
(1) All amounts received from Obligors with respect to principal of
and interest on the Contracts;
57
(2) All Net Liquidation Proceeds with respect to the Contracts;
(3) All amounts required to be deposited by Vanderbilt pursuant to
Sections 3.05(a) and (b) with respect to the Contracts;
(4) All Monthly Advances with respect to the Contracts pursuant to
Section 6.04; and
(5) All amounts required to be withdrawn from an REO Account and
deposited in the Certificate Account in accordance with Section 5.17.
Section 5.06. Payment of Taxes. If the Servicer becomes aware of the
nonpayment by an Obligor of a personal property tax or other tax or charge
which may result in a lien upon a Manufactured Home prior to, or equal to or
coordinate with, the lien of the related Contract, the Servicer, consistent
with Section 5.02, shall take action to avoid the attachment of any such lien.
If the Servicer shall have paid any such personal property tax or other tax or
charge directly on behalf of an Obligor, the Servicer shall seek reimbursement
therefor only from the related Obligor (except as provided in the last
sentence of this Section) and may separately add such amount to the Obligor's
obligation as provided by the Contract, but, for the purposes of this
Agreement, may not add such amount to the remaining principal balance of the
Contract. If the Servicer shall have repossessed a Manufactured Home on behalf
of the Certificateholders and the Trust Fund, the Servicer shall pay the
amount of any such personal property tax or other tax or charge arising during
the time such Manufactured Home is in the Servicer's possession, unless the
Servicer is contesting in good faith such personal property tax or other tax
or charge or the validity of the claimed lien on such Manufactured Home. If
the Obligor does not reimburse the Servicer for payment of taxes pursuant to
this Section and the related Contract is liquidated after a default, the
Servicer shall be reimbursed for its payment of such taxes out of the related
Liquidation Proceeds.
Section 5.07. Enforcement.
(a) The Servicer, consistent with Section 5.02, will act with respect to
the Contracts in such manner as will maximize the receipt of principal and
interest on such Contracts.
(b) The Servicer shall ▇▇▇ to enforce, foreclose or otherwise collect
upon Contracts, in its own name, if possible, or as agent for the Trust Fund.
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
Certificateholders 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. If there has been a recovery
of attorneys' fees in favor of the Servicer or the Trust Fund in an action
involving the enforcement of a Contract, the Servicer shall be reimbursed out
of such recovery for its out-of-pocket attorney's fees and expenses incurred
in such enforcement action.
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(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with Section
5.02. 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) The Servicer may grant to the Obligor on any Contract any rebate,
refund or adjustment out of the Certificate Account that is required because
of an overpayment in connection with the prepayment in full of such Contract
or otherwise. The Servicer will not permit any rescission or cancellation of
any Contract.
Section 5.08. Transfer of the Certificate Account. The Trustee may
transfer the Certificate Account to a different depository institution from
time to time, so long as the Certificate Account remains an Eligible Account.
The Trustee shall give notice of any transfer of the Certificate Account to
the Rating Agencies prior to such transfer.
Section 5.09. Maintenance of Hazard Insurance Policies.
(a) Except as otherwise provided in subsection (b) of this Section 5.09,
the Servicer shall cause to be maintained with respect to each Contract one or
more Hazard Insurance Policies which provide, at a minimum, the same coverage
as a standard form fire and extended coverage insurance policy that is
customary for manufactured housing, issued by a company authorized to issue
such policies in the state in which the 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 that such Hazard Insurance Policies may
provide for customary deductible amounts, and provided further 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. If a
Manufactured Home is located 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. 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 add
separately such premium to the Obligor's obligation as provided by the
Contract, but may not add such premium to the remaining principal balance of
the Contract for purposes of this Agreement. If the Obligor does not reimburse
the Servicer for payment of such premiums and the related Contract is
liquidated after a default, the Servicer shall be reimbursed for its payment
of such premiums out of the related Liquidation Proceeds.
(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 as provided in subsection (a) of this
Section resulting from the absence or insufficiency of individual Hazard
Insurance Policies. Any such blanket
59
policy shall be substantially in the form that is the industry standard for
blanket insurance policies issued to cover Manufactured Homes and in the
amount sufficient to cover all losses on the Contracts. The Servicer shall
pay, out of its own funds, the premium for such policy on the basis described
therein and shall deposit in the Certificate Account, on the Business Day next
preceding the Determination Date following the Due Period in which the
insurance proceeds from claims in respect of any Contracts under such blanket
policy are or would have been received, the deductible amount with respect to
such claims. 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.
(c) If the Servicer shall have repossessed a Manufactured Home on behalf
of the Trust Fund or foreclosed upon or otherwise acquired any Mortgaged
Property, the Servicer shall either (i) maintain at its expense a Hazard
Insurance Policy with respect to such Manufactured Home or Mortgaged Property
meeting the requirements of subsections (a) or (b), except that the Servicer
shall be responsible for depositing any deductible amount with respect to all
claims under individual Hazard Insurance Policies, or (ii) indemnify the Trust
Fund against any damage to such Manufactured Home prior to resale or other
disposition.
(d) Any cost incurred by the Servicer in maintaining any of the foregoing
insurance, for the purpose of calculating monthly distributions to
Certificateholders, shall not be added to the amount owing under the Contract,
notwithstanding that the terms of the Contract so permit. The Servicer shall
not be entitled to reimbursement from Vanderbilt, the Trustee or the
Certificateholders for such costs. Such costs (other than the cost of the
blanket policy) shall only be recovered out of late payments by the Obligor
for such premiums or, if the related Contract is liquidated after a default,
out of the related Liquidation Proceeds.
Section 5.10. Fidelity Bond and Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies acceptable to the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, on all officers, employees or other
persons acting in any capacity with regard to the Contracts to handle funds,
money, documents and papers relating to the Contracts. Any such fidelity bond
and errors and omissions insurance shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. No provision of this Section
5.10 requiring such fidelity bond and errors and omissions insurance shall
diminish or relieve the Servicer from its duties and obligations as set forth
in this Agreement. The minimum coverage under any such bond and insurance
policy, shall be in an amount as is customary for servicers that service a
portfolio of manufactured housing installment sales contracts of $100 million
or more and that are generally acceptable as servicers to institutional
investors. Upon request of the Trustee, the Servicer shall cause to be
delivered to the Trustee a certified true copy of such fidelity bond and
insurance policy and a statement from the surety and the insurer that such
fidelity bond or insurance policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Trustee.
Section 5.11. Collections under Hazard Insurance Policies; Consent to
Transfers of Manufactured Homes; Assumption Agreements.
60
(a) In connection with its activities as administrator and servicer of
the Contracts, the Servicer agrees to present, on behalf of itself, the
Trustee and Certificateholders, claims to the insurer under any Hazard
Insurance Policies and, in this regard, to take such reasonable action as
shall be necessary to permit recovery under any Hazard Insurance Policies. Any
amounts collected by the Servicer under any such Hazard Insurance Policies
shall be deposited within two Business Days after receipt in the Certificate
Account pursuant to Section 5.05, except to the extent they are applied to the
restoration of the related Manufactured Home or released to the related
Obligor in accordance with the normal servicing procedures of the Servicer.
(b) The Servicer shall not withhold its consent to any transfer of
ownership of a Manufactured Home in accordance with the related Contract
unless the proposed transferee does not meet the Servicer's then applicable
underwriting standards (exclusive of down payment requirements). In addition,
the Servicer shall not withhold such consent if such withholding of consent is
not permitted under applicable law and governmental regulations.
(c) In any case in which a Manufactured Home is to be conveyed to a
Person by an Obligor, and such Person is to enter into an assumption agreement
or modification agreement or supplement to the Contract, upon the closing of
such conveyance, the Servicer shall cause the originals of the assumption
agreement, the release (if any), or the modification or supplement to the
Contract to be deposited with the Contract File, the Land-and-Home Contract
File or the Mortgage Loan File, as applicable, for such Contract. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement with respect to such Contract will be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, the rate of interest borne by, and all other material terms of,
the related Contract shall not be changed.
(d) Notwithstanding any of the foregoing, the Servicer shall not permit
the extension of the maturity date of any Contract beyond the latest-occurring
scheduled maturity date of any Contract as of the Cut-off Date.
Section 5.12. Realization upon Defaulted Contracts. Subject to applicable
law, the Servicer shall repossess, foreclose upon or otherwise comparably
convert the ownership of Manufactured Homes and any related Mortgaged Property
securing all Contracts that come into default and which the Servicer believes
in its good faith business judgment will not be brought current; provided,
however, that notwithstanding anything else in this Agreement to the contrary,
but subject to the requirements of law, the Servicer shall commence
repossession, foreclosure and other realization procedures in respect of any
Contract that is at any one time delinquent as to all or part of five or more
(or ten or more, in the case of Bi-weekly Contracts and Semi-Monthly
Contracts) scheduled payments; 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 Fund to acquire title to such Mortgaged
Property in a foreclosure or similar proceeding. For purposes of the last
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 Servicing
File with respect to the related Contract. Such written notice shall be
provided to the Trustee. In the event that the Trustee is responsible for
foreclosing on a Contract, if a Responsible Officer of the Trustee has actual
knowledge that a
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Mortgaged Property is affected by hazardous waste, then the Trustee shall not
cause the Trust Fund to acquire title to such Mortgaged Property in a
foreclosure or similar proceeding. In connection with such repossession,
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. Subject to the foregoing proviso, 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. The Servicer shall manage, conserve and protect such Manufactured
Homes and any related Mortgaged Property for the purposes of their prompt
disposition and sale, and shall dispose of such Manufactured Homes and any
related Mortgaged Property on such terms and conditions as it deems in the
best interests of the Certificateholders. In connection with such activities,
the Servicer shall follow such practices and procedures as are consistent with
Section 5.02.
Section 5.13. Costs and Expenses. All costs and expenses incurred by the
Servicer in carrying out its duties under this Agreement, including all fees
and expenses incurred in connection with the enforcement of Contracts
(including enforcement of defaulted Contracts and repossessions of
Manufactured Homes securing such Contracts), shall be paid by the Servicer and
the Servicer shall not be entitled to reimbursement hereunder, except to the
extent such reimbursement is specifically provided for in this Agreement.
Notwithstanding the foregoing, the Servicer shall be reimbursed out of the
Liquidation Proceeds of a defaulted Contract for Liquidation Expenses incurred
by it in realizing upon the related Manufactured Home and any related
Mortgaged Property, including, but not limited to: (i) costs of refurbishing
and securing such Manufactured Home; (ii) transportation expenses incurred in
moving the Manufactured Home; (iii) reasonable legal fees and expenses of
outside counsel; (iv) rental expenses (including the payment of rent not paid
by the defaulting Obligor) incurred in maintaining a leasehold interest for
the Manufactured Home; and (v) sales commissions paid to (a) Persons that are
not Affiliates of the Servicer or (b) Affiliates of the Servicer, if such
sales commission is no greater than the sales commission that would be paid to
a Person that is not an Affiliate of the Servicer. The Servicer shall not
incur the foregoing Liquidation Expenses unless it determines in its good
faith business judgment that incurring such expenses will increase the Net
Liquidation Proceeds from such Manufactured Home.
Notwithstanding anything in this Agreement to the contrary, so long as
Vanderbilt is the Servicer, the Servicer, in its sole discretion, may, but is
not obligated to, liquidate a defaulted Contract by depositing into the
Certificate Account, as Liquidation Proceeds, an amount equal to (i) the
outstanding principal balance of such Contract plus accrued and unpaid
interest thereon to the Due Date in the Due Period in which such deposit is
made less (ii) $2,000. The Servicer shall not be reimbursed for any
Liquidation Expenses incurred in connection with such Contract and shall
retain any liquidation proceeds thereafter collected in liquidating such
Contract.
Section 5.14. Trustee to Cooperate. Upon payment in full of any Contract,
the Servicer will notify the Trustee on the next Determination Date by a
certificate of a Servicing Officer (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the related
Certificate Account pursuant to Section 5.05 have been deposited). The
Servicer is authorized to execute an instrument in satisfaction of such
Contract and any related Mortgage and do such
62
other acts and execute such other documents as the Servicer deems necessary to
discharge the Obligor thereunder and eliminate the security interest in the
Manufactured Home and any related Mortgaged Property related thereto. The
Servicer shall determine when a Contract has been paid in full; to the extent
insufficient payments are received on a Contract mistakenly determined by the
Servicer to be prepaid or paid in full and satisfied, the shortfall shall be
paid by the Servicer out of its own funds by deposit into the Certificate
Account. Upon request of a Servicing Officer, the Trustee shall, at the
expense of the Servicer, perform such other acts as are reasonably requested
by the Servicer (including, without limitation, the execution of documents)
and otherwise cooperate with the Servicer in enforcement of rights and
remedies with respect to Contracts, and the Trustee shall not be liable or
responsible for the execution of any documents or performance of any acts
requested by the Servicer pursuant to this Section.
Section 5.15. Servicing and Other Compensation. The Servicer, as
compensation for its activities hereunder including, without limitation, the
payment of fees and expenses of the Trustee pursuant to Section 10.05, shall
be entitled to receive on each Remittance Date the Monthly Servicing Fee
pursuant to, and to the extent provided in, Section 6.02. In addition, the
Servicer may obtain any additional compensation permitted pursuant to this
Agreement.
Additional servicing compensation in the form of Late Payment Fees or
Extension Fees and any transfer of equity or assumption fees shall be retained
by the Servicer.
The Servicer shall not be reimbursed for its costs and expenses in
servicing the Contracts except as provided pursuant to Sections 5.06, 5.09 and
5.13.
Section 5.16. Custody of Contracts.
(a) Subject to the terms and conditions of this Section and Section
3.04(a), the Servicer shall maintain custody of the Contract Files as
custodian for the benefit of the Certificateholders and the Trustee. The
Trustee, or a custodian appointed by or on behalf of the Trustee, shall
maintain custody of the Land-and-Home Contract Files and the Mortgage Loan
Files.
(b) The Servicer agrees to maintain the related Contract Files at its
offices where they are presently maintained, or at such other offices of the
Servicer in the State of Tennessee as shall from time to time be identified to
the Trustee by ten days' prior written notice. The Servicer may temporarily
move individual 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) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the 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;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to
the Contract Files on the Servicer's premises and the receipting for
Contract Files taken from their storage area by an employee of the
Servicer for purposes of servicing or any other purposes; and
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(iii) attend to all details in connection with maintaining custody
of the Contract Files on behalf of the Certificateholders and the
Trustee.
(d) In performing its duties under this Section, the Servicer 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, but
in no event using a degree of skill and care that is lower than that used
generally in the servicing industry for such contracts. The Servicer shall
promptly report to the Trustee any failure by it to hold the Contract Files as
herein provided and shall promptly take appropriate action to remedy any such
failure. In acting as custodian of the Contract Files, the Servicer agrees
further not to assert any beneficial ownership interests in the Contracts or
the Contract Files. The Servicer agrees 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 or the Trustee as the
result of any act or omission by the Servicer relating to the maintenance and
custody of the Contract Files; provided, however, that the Servicer will not
be liable to the Certificateholders for any portion of any such amount
resulting from the negligence or willful misconduct of any Certificateholder
or the Trustee and will not be liable to the Trustee for any portion of such
amount resulting from the negligence or willful misconduct of the Trustee. The
agreement of the Servicer to indemnify the Trustee shall survive the
resignation or removal of the Trustee and the termination of this Agreement.
Section 5.17. REMIC Compliance. The parties intend that the Trust Fund
formed hereunder shall constitute, and that the affairs of the Trust Fund
shall be conducted so as to qualify it as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Servicer shall, to the extent permitted by
applicable law, act as agent, and is hereby appointed to act as agent, of the
Trust Fund and shall on behalf of the Trust Fund: (a) prepare, file and
present to the Trustee to sign, or cause to be prepared, filed and presented
to the Trustee to be signed, all required federal tax returns for the Trust
Fund, including, but not limited to, Form 1066 using a calendar year as the
taxable year for the Trust Fund when and as required by the REMIC Provisions
and other applicable federal income tax laws; (b) make an election, on behalf
of the Trust Fund, to be treated as a REMIC on the Form 1066 for its first
taxable year, in accordance with the REMIC Provisions; (c) prepare and
forward, or cause to be prepared and forwarded, to the Certificateholders all
information reports as and when required to be provided to them in accordance
with the REMIC Provisions; (d) take such other actions as are necessary or
appropriate to maintain the status of the Trust Fund as a REMIC; and (e) serve
as tax matters person for the Trust Fund pursuant to Treasury Regulations
Section 1.860F-4(d) or serve as attorney-in-fact and agent for any Person that
is the tax matters person. Neither the Trustee nor the Servicer shall take any
action or omit to take any action if such action or omission (as the case may
be) would cause the termination of the REMIC status of the Trust Fund;
provided, however, that neither the Trustee nor the Servicer shall be required
to take any action if a Responsible Officer of the Trustee or the Servicer, as
applicable, in good faith believes such action or omission to be inconsistent
with any other provision of this Agreement. Vanderbilt and the Servicer shall
cooperate with the Servicer or its agent for such purpose in supplying any
information within their control that is necessary to enable the Servicer to
perform its duties under this Section. The Holder of the Class R Certificate,
by purchasing such Class R Certificate, (a) shall be deemed to consent to the
appointment of the Servicer as (i) the tax
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matters person for the Trust Fund and (ii) the attorney-in-fact and agent for
any person that is the tax matters person if the Servicer is unable to serve
as the tax matters person and (b) agrees to execute any documents required to
give effect to clause (a) of this sentence.
The Holder of the Class R Certificate, by purchasing such Class R
Certificate, agrees to give the Servicer written notice that it is a
"pass-through interest holder" within the meaning of Temporary Treasury
Regulations section 1.67-3T(a)(2)(i)(A) immediately upon becoming the Holder
of the Class R Certificate, if it is, or is holding the Class R Certificate on
behalf of, a "pass-through interest holder."
In the event that any tax, including interest, penalties, additional
amounts or additions to tax (a "Tax"), is imposed on the Trust Fund, such tax
shall be charged against amounts otherwise required to be distributed on the
Class R Certificate. The Servicer shall notify the Trustee if any Tax is
imposed on the Trust Fund and the amount of any such Tax. The Trustee is
hereby authorized to retain, or cause the Paying Agent to retain, from amounts
otherwise required to be distributed on the Class R Certificate, sufficient
funds to pay or provide for the payment of, and to actually pay, or cause the
Paying Agent to pay, such Tax as is legally owed by the Trust Fund (but such
authorization shall not prevent the Trustee from contesting any such Tax in
appropriate proceedings, and withholding payment of such Tax, if permitted by
law, pending the outcome of such proceedings). To the extent that sufficient
amounts cannot be so retained to pay or provide for the payment of any tax
imposed on gain realized from any prohibited transaction (as defined in the
REMIC Provisions), the Trustee is hereby authorized to and, upon the receipt
of written notice of the existence of any tax liability, shall segregate, into
a separate non-interest-bearing account, the net income from such prohibited
transactions and pay, or cause the Paying Agent to pay, such Tax. In the event
any (i) amounts initially retained from amounts required to be distributed on
the Class R Certificate and (ii) income so segregated and applied towards the
payment of such Tax shall not be sufficient to pay such Tax in its entirety,
the amount of the shortfall shall be paid from funds in each Certificate
Account after distributions of principal and interest to the related
Certificateholders pursuant to Section 6.01 in respect of the related
Remittance Date notwithstanding anything to the contrary contained herein. To
the extent any such segregated income or funds from the Certificate Account
are paid to the Internal Revenue Service, the Trustee shall retain, or cause
to be retained, an amount equal to the amount of such income or funds so paid
from future amounts otherwise required to be distributed on the Class R
Certificate and shall deposit such retained amounts in the Certificate Account
for distribution to the Holders of Certificates other than the Class R
Certificate.
Except as provided in Section 3.05 and except in connection with REO
Property, the Trustee shall not sell any Contract or any other asset of the
Trust Fund unless either (i) it has received an Opinion of Counsel to the
effect that such sale will not result in the imposition of taxes on
"prohibited transactions" on the Trust Fund as defined in Section 860F of the
Code, or (ii) the proceeds of such sale, net of any related taxes on
"prohibited transactions" on the Trust Fund as defined in Section 860F of the
Code, will at least equal the Repurchase Price of such Contract.
In the event that any Manufactured Home is acquired in a repossession or
foreclosure (an "REO Property"), the Servicer shall sell any REO Property
within 3 years of its acquisition by the Trust Fund, unless, at the request
and expense of the Servicer, the Servicer seeks, and
65
subsequently receives, an Opinion of Counsel, addressed to the Trustee and the
Servicer, to the effect that the holding by the Trust Fund of such REO
Property subsequent to 3 years after its acquisition will not result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as defined
in Section 860F of the Code or cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding. The Servicer shall
manage, conserve, protect and operate each REO Property solely for the purpose
of its prompt disposition and sale in a manner that does not cause any such
REO Property to fail to qualify as "foreclosure property" within the meaning
of Section 860G(a)(8) or result in the receipt by the REMIC of any "income
from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems
to be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property.
The Servicer shall segregate and hold all funds collected and received in
connection with the operation of any REO Property separate and apart from its
own funds and general assets and shall establish and maintain with respect to
each REO Property an account held in trust for the Trustee for the benefit of
the Certificateholders (each, an "REO Account"), which shall be an Eligible
Account. The Servicer shall be entitled to retain or withdraw any interest
income paid on funds deposited in each REO Account by the depository.
The Servicer shall deposit, or cause to be deposited, within two Business
Days after receipt on a daily basis in each REO Account all revenues received
with respect to the related REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of the REO
Property. On or before each Determination Date, the Servicer shall withdraw
from each REO Account and deliver to the Trustee for deposit into the
Certificate Account the income from the REO Property on deposit in the REO
Account, net of its reasonable fees and expenses.
The disposition of REO Property shall be carried out by the Servicer at
such price and upon such terms and conditions as the Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities.
The proceeds from the REO disposition, net of any reimbursement to the
Servicer as provided above, shall be deposited in the REO Account and shall be
deposited in the Certificate Account when the related Contract becomes a
Liquidated Contract.
Section 5.18. Establishment of and Deposits in the Distribution Account.
On or before the Closing Date, the Trustee shall have established, and
thereafter shall maintain, a Distribution Account which is an Eligible
Account, in the form of one or more separate custodial accounts, titled
"Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 2002-B (Vanderbilt Mortgage and Finance, Inc., Seller), in trust for
the Trustee." The monies in the Distribution Account shall not be invested.
One Business Day prior to each Remittance Date, the Trustee shall deposit in
the Distribution Account the Available Distribution Amount.
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Section 5.19. Pre-Funding Account. (a) On or before the Closing Date, the
Trustee shall have established, and thereafter shall maintain until the
Remittance Date in December 2002, a Pre-Funding Account to be held by the
Trustee in the name of the Trust Fund for the benefit of the
Certificateholders. The Trustee shall cause moneys in the Pre-Funding Account
to be invested in Eligible Investments as directed in writing by the Servicer,
which shall mature or, in the case of a money market fund, be redeemed not
later than the Business Day immediately preceding the Remittance Date next
following the date of such investment (except that if such Eligible Investment
is an obligation of the institution that maintains the Pre-Funding Account,
then such Eligible Investments shall mature or, in the case of a money market
fund, be redeemed not later than such Remittance Date) and shall not be sold
or disposed of prior to its maturity. If a selection is not made and a written
direction not given to the Trustee, funds shall remain uninvested in a
segregated non-interest bearing account with no liability for interest
thereon. All such Eligible Investments shall be made in the name of the
Trustee. The Servicer shall promptly notify the Trustee upon obtaining
knowledge that an instrument or account in which the Pre-Funding Account is
invested has ceased to be an Eligible Investment or Eligible Account.
(b) On the Closing Date, the Trustee will deposit in the Pre-Funding
Account the Original Pre-Funded Amount.
(c) On any Subsequent Transfer Date, Vanderbilt shall instruct the
Trustee in writing to withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate principal balances of the Subsequent Contracts sold to
the Trustee or any separate trustee on such Subsequent Transfer Date and pay
such amount to or upon the order of Vanderbilt upon satisfaction of the
conditions set forth in Section 5.20 hereof with respect to such transfer. In
no event shall Vanderbilt be permitted to instruct the Trustee to release from
the Pre-Funding Account to the Certificate Account with respect to Subsequent
Contracts to be transferred an aggregate amount in excess of the Original
Pre-Funded Amount.
(d) If (x) the Pre-Funded Amount with respect to the Contracts has not
been reduced to zero by the end of the Funding Period or (y) the Pre-Funded
Amount has been reduced to $100,000 or less, then Vanderbilt shall instruct
the Trustee in writing to withdraw from the Pre-Funding Account the amount
(exclusive of any related Pre-Funding Account Earnings still on deposit
therein) remaining in the Pre-Funding Account and deposit such amount to the
Certificate Account on the Remittance Date in the month following the month in
which the earlier of either (x) or (y) occurs.
(e) On the first four Remittance Dates the Trustee shall, based upon the
information furnished by the Servicer to the Trustee pursuant to Section
5.20(d), transfer from the Pre-Funding Account to the Certificate Account, the
Pre-Funding Account Earnings, if any, applicable to such Remittance Date.
It is the intention of the parties that the funds in the Pre-Funding Account
be held by the Trustee as the owner thereof for the sole benefit of the
Certificateholders. Should the funds in the Pre-Funding Account constitute
assets that are not so owned by the Trustee, however, the parties agree that
the Trustee shall have, and Vanderbilt hereby grants to the Trustee, a
security interest in such funds and all proceeds thereof, including all
investments that the Trustee may acquire
67
with such funds from time to time, which security interest is of first
priority and has been and shall be duly perfected.
Section 5.20. Conveyance of the Subsequent Contracts. (a) Subject to the
satisfaction of the conditions set forth in paragraph (b) below (based on the
Trustee's receipt of Vanderbilt's Officer's Certificate pursuant to condition
(vi) or, if a Responsible Officer of the Trustee has actual knowledge relating
to the satisfaction of a condition, based on such actual knowledge) in
consideration of the Trustee's delivery on the relevant Subsequent Transfer
Dates to or upon the order of Vanderbilt of all or a portion of the balance of
funds in the Pre-Funding Account, Vanderbilt shall on any Subsequent Transfer
Date sell, transfer, assign, set over and otherwise convey without recourse,
to the Trustee, as trustee, or a separate trustee, all of Vanderbilt's right,
title and interest in and to any and all benefits accruing to Vanderbilt from
the Subsequent Contracts which Vanderbilt is causing to be delivered to the
Trustee (and all substitutions therefor as provided by Section 3.05), together
with the related Contract Files and all payments thereon and proceeds of the
conversion, voluntary or involuntary, of the foregoing and proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, hazard insurance and title insurance policy relating to
the Subsequent Contracts, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing).
The transfer by the Seller of the Subsequent Contracts set forth on the
Contract Schedule (relating to a Subsequent Transfer Date) to the Trustee, as
trustee, or a separate trustee shall be absolute and shall be intended by the
Certificateholders and all parties hereto to be treated as a sale by
Vanderbilt. Each such conveyance and each Subsequent Contract shall be
governed by Section 2.01(b). The amount released from the Pre-Funding Account
shall be one-hundred percent (100%) of the aggregate principal balances of the
Subsequent Contracts so transferred. Upon the transfer by Vanderbilt of the
Subsequent Contracts, such Subsequent Contracts (and all principal collected
and interest accruing thereon subsequent to the Subsequent Cut-Off Date) and
all other rights and interests with respect to such Subsequent Contracts and
all proceeds derived therefrom shall be deemed for all purposes hereunder to
be part of the Trust Fund.
(b) The obligation of the Trustee to accept the transfer of the
Subsequent Contracts and the other property and rights related thereto
described in paragraph (a) above is subject to the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:
(i) Vanderbilt shall have provided the Trustee with an updated
Contract Schedule and shall have provided any information reasonably
requested with respect to the Subsequent Contracts;
(ii) Vanderbilt shall have delivered to the Trustee or a separate
trustee a duly executed written assignment (including an acceptance by
the Trustee) in substantially the form of Exhibit M, which shall include
a Schedule of Contracts, listing the Subsequent Contracts and any other
exhibits listed thereon;
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(iii) Vanderbilt shall have deposited in the Certificate Account all
principal collected and interest accruing in respect of such Subsequent
Contracts on or after the related Subsequent Cut-Off Date;
(iv) as of each Subsequent Transfer Date, Vanderbilt was not
insolvent, nor will it be made insolvent by such transfer, nor is it
aware of any pending insolvency;
(v) the Funding Period shall not have ended; and
(vi) Vanderbilt shall have delivered to the Trustee an Officer's
Certificate confirming the satisfaction of each condition precedent
specified in this paragraph (b) and in the related Subsequent Transfer
Agreement.
(c) The obligation of the Trust Fund to purchase a Subsequent Contract on
any Subsequent Transfer Date is subject to the following requirements:
(i) such Subsequent Contracts may not be 30 or more days
contractually delinquent as of the related Subsequent Cut-Off Date and
shall have a scheduled payment (or in the case of Bi-Weekly Contracts,
two scheduled payments) due and payable to the Trust Fund on or after the
related Subsequent Cut-Off Date and prior to the end of the Due Period
with respect to the Remittance Date next succeeding such Subsequent
Cut-Off Date; and
(ii) following the purchase of such Subsequent Contracts by the
Trust Fund, the Contract Pool (including the Subsequent Contracts):
(a) will have a weighted average Contract Rate of at least
10.222%;
(b) will have a weighted average remaining term to stated
maturity of not more than 228 months;
(c) will have a weighted average original term to maturity of
not more than 236 months;
(d) will have a weighted average Loan-to-Value Ratio of not
more than 85%;
(e) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) secured by Manufactured Homes which were
new at the time the related Contracts were originated will be
at least 66%;
(f) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) secured by Manufactured Homes which were
located in Texas at the time the related Contracts were
originated will be no more than 20%;
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(g) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) secured by Manufactured Homes which were
located in Tennessee at the time the related Contracts were
originated will be no more than 12%;
(h) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) secured by Land-and-Home Contracts will
be at least 14%;
(i) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) secured by "single-wide" Manufactured
Homes will be no more than 43%;
(j) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) secured by Manufactured Homes which were
located in a "park" (where such information is available) will
be no more than 24%;
(k) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) with an LTV in excess of 90% at the time
of origination will be no more than 43%;
(l) will have a weighted average of internal credit scores by
Vanderbilt of not less than 218;
(m) will have a weighted average FICO score of not less than
638 for those loans for which a FICO score is available;
(n) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) which were repossessed and subsequently
refinanced at the time of origination will be no more than 15%;
and
(o) the percentage of the Contracts by outstanding principal
balance (as of the Subsequent Cut-Off Date in the case of the
Subsequent Contracts) which were originated by Vanderbilt will
be at least 59%.
(d) In connection with each Subsequent Transfer Date and on the first
four Determination Dates, the Servicer shall determine and, no later than
10:00 a.m. New York City time on such date, advise the Trustee in writing: (i)
Pre-Funding Account Earnings and the Pre-Funded Amount and (ii) any other
necessary matters in connection with the administration of the Pre-Funding
Account. In the event that any amounts are released to the Certificateholders
or Vanderbilt from the Pre-Funding Account as a result of an error in
calculation, such Certificateholders or Vanderbilt, as applicable, shall
immediately repay such amounts to the Trustee.
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[End of Article V]
71
Article VI
PAYMENTS TO THE CERTIFICATEHOLDERS; WITHDRAWALS FROM
CERTIFICATE ACCOUNT
Section 6.01. Monthly Payments.
(a) On each Remittance Date the Trustee shall, based upon the information
set forth in the Monthly Report for such Remittance Date, withdraw from the
Distribution Account an amount equal to the Available Distribution Amount for
such Remittance Date and apply such amount as set forth below:
A. On each Remittance Date on which the Class M-1 and Class B Principal
Distribution Test is not met, the Available Distribution Amount will be
distributed in the following amounts in the following order of priority:
(i) interest accrued during the related Interest Period on the Class
A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates, Class
A-3 Certificates and Class A-4 Certificates, at their respective
Remittance Rates on the outstanding Class A-1F Principal Balance, Class
A-1V Principal Balance, Class A-2 Principal Balance, Class A-3 Principal
Balance and Class A-4 Principal Balance, respectively, together with any
previously undistributed shortfalls in interest due on the Class A-1F
Certificates, Class A-1V Certificates, Class A-2 Certificates, Class A-3
Certificates and Class A-4 Certificates, respectively, in respect of
prior Remittance Dates; if the Available Distribution Amount is not
sufficient to distribute the full amount of interest due on the Class
A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates, Class
A-3 Certificates and Class A-4 Certificates, the Available Distribution
Amount will be distributed on such Classes of Certificates pro rata on
the basis of the interest due thereon;
(ii) the Formula Principal Distribution Amount in the following
order of priority:
(a) to the Class A-1F and Class A-1V Certificates, pro rata
until the Class A-1F and Class A-1V Principal Balances are
reduced to zero;
(b) to the Class A-2 Certificates until the Class A-2 Principal
Balance is reduced to zero;
(c) to the Class A-3 Certificates until the Class A-3 Principal
Balance is reduced to zero;
(d) to the Class A-4 Certificates until the Class A-4 Principal
Balance is reduced to zero;
(iii) interest accrued during the related Interest Period at the
Class A-5 Remittance Rate on the Class A-5 Principal Balance to the Class
A-5 Certificates,
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together with any previously undistributed shortfalls in interest due on
the Class A-5 Certificates in respect of prior Remittance Dates;
(iv) the remainder of the Formula Principal Distribution Amount, if
any, to the Class A-5 Certificates until the Class A-5 Principal Balance
is reduced to zero;
(v) interest accrued during the related Interest Period at the Class
M-1 Remittance Rate on the Class M-1 Principal Balance to the Class M-1
Certificates, together with any previously undistributed shortfalls in
interest due on the Class M-1 Certificates in respect of prior Remittance
Dates;
(vi) the remainder of the Formula Principal Distribution Amount, if
any, to the Class M-1 Certificates until the Class M-1 Principal Balance
is reduced to zero;
(vii) interest accrued during the related Interest Period at the
Class B-1 Remittance Rate on the Class B-1 Principal Balance to the Class
B-1 Certificates, together with any previously undistributed shortfalls
in interest due on the Class B-1 Certificates in respect of prior
Remittance Dates;
(viii) the remainder of the Formula Principal Distribution Amount,
if any, to the Class B-1 Certificates until the Class B-1 Principal
Balance is reduced to zero;
(ix) interest accrued during the related Interest Period at the
Class B-2 Remittance Rate on the Class B-2 Principal Balance to the Class
B-2 Certificates, together with any previously undistributed shortfalls
in interest due on the Class B-2 Certificates in respect of prior
Remittance Dates;
(x) the remainder of the Formula Principal Distribution Amount, if
any, to the Class B-2 Certificates until the Class B-2 Principal Balance
is reduced to zero;
(xi) any remaining amount, to pay ▇▇▇▇▇▇▇ the Guarantee
Reimbursement Amount, if any, with respect to the Class B-2 Certificates;
(xii) any remaining amount, to pay the Monthly Servicing Fee, to the
Servicer, if Vanderbilt is the Servicer;
(xiii) any remaining amount, to the holder of the Class R
Certificate;
B. On each Remittance Date on which the Class M-1 and Class B Principal
Distribution Test is met, the Available Distribution Amount will be
distributed in the following amounts in the following order of priority:
(i) interest accrued during the related Interest Period on the Class
A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates, Class
A-3 Certificates and Class A-4 Certificates, at their respective
Remittance Rates on the outstanding Class A-1F Principal Balance, Class
A-1V Principal Balance, Class A-2 Principal Balance, Class A-3 Principal
Balance and Class A-4 Principal Balance, respectively, together with any
previously undistributed shortfalls in interest due on the Class A-1F
Certificates, Class ▇-
▇▇
1V Certificates, Class A-2 Certificates, Class A-3 Certificates and Class
A-4 Certificates, respectively, in respect of prior Remittance Dates; if
the Available Distribution Amount is not sufficient to distribute the
full amount of interest due on the Class A-1F Certificates, Class A-1V
Certificates, Class A-2 Certificates, Class A-3 Certificates and Class
A-4 Certificates, the Available Distribution Amount will be distributed
on such Classes of Certificates pro rata on the basis of the interest due
thereon;
(ii) the Class A Percentage of the Formula Principal Distribution
Amount in the following order of priority:
(a) to the Class A-1F and Class A-1V Certificates, pro rata, until
the Class A-1F and Class A-1V Principal Balances are reduced to
zero;
(b) to the Class A-2 Certificates until the Class A-2 Principal
Balance is reduced to zero;
(c) to the Class A-3 Certificates until the Class A-3 Principal
Balance is reduced to zero; and
(d) to the Class A-4 Certificates until the Class A-4 Principal
Balance is reduced to zero;
(iii) interest accrued during the related Interest Period at the
Class A-5 Remittance Rate on the Class A-5 Principal Balance to the Class
A-5 Certificates, together with any previously undistributed shortfalls
in interest due on the Class A-5 Certificates in respect of prior
Remittance Dates;
(iv) the remainder of the Class A Percentage of the Formula
Principal Distribution Amount, if any, to the Class A-5 Certificates
until the Class A-5 Principal Balance is reduced to zero;
(v) interest accrued during the related Interest Period at the Class
M-1 Remittance Rate on the Class M-1 Principal Balance to the Class M-1
Certificates, together with any previously undistributed shortfalls in
interest due on the Class M-1 Certificates in respect of prior Remittance
Dates;
(vi) the Class M-1 Percentage of the Formula Principal Distribution
Amount, if any, to the Class M-1 Certificates until the Class M-1
Principal Balance is reduced to zero;
(vii) interest accrued during the related Interest Period at the
Class B-1 Remittance Rate on the Class B-1 Principal Balance to the Class
B-1 Certificates, together with any previously undistributed shortfalls
in interest due on the Class B-1 Certificates in respect of prior
Remittance Dates;
(viii) the Class B Percentage of the Formula Principal Distribution
Amount to the Class B-1 Certificates until the Class B-1 Principal
Balance is reduced to zero;
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(ix) interest accrued during the related Interest Period at the
Class B-2 Remittance Rate on the Class B-2 Principal Balance to the Class
B-2 Certificates, together with any previously undistributed shortfalls
in interest due on the Class B-2 Certificates in respect of prior
Remittance Dates;
(x) the remainder of the Formula Principal Distribution Amount to
the Class B-2 Certificates until the Class B-2 Principal Balance is
reduced to zero; provided, however, if the Principal Balance of the Class
A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates, Class
A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates and
Class M-1 Certificates have not been reduced to zero on or before a
Remittance Date, to the extent that allocations in respect of principal
to the Class B-2 Certificates would reduce the Class B-2 Principal
Balance below the Class B-2 Floor Amount, then the amount of such excess
principal will instead by distributed, pro rata, to the Class A
Certificates and the Class M-1 Certificates based on the respective
Principal Balances of such Certificates prior to distributions pursuant
to clauses B(ii), (iv) and (vi) above with respect to such Remittance
Date. The allocations in respect of such excess principal to the Class A
Certificates will be in the order of priority set forth in clauses
(B)(ii) and (iv) above;
(xi) any remaining amounts, to pay ▇▇▇▇▇▇▇ the Guarantee
Reimbursement Amount, if any, with respect to the Class B-2 Certificates;
(xii) any remaining amounts, to pay the Monthly Servicing Fee, to
the Servicer, if Vanderbilt is the Servicer; and
(xiii) any remaining amounts, to the holder of the Class R
Certificate.
Notwithstanding the prioritization of the distribution of the Formula
Principal Distribution Amount among the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates and Class A-4 Certificates pursuant to
clauses A(ii) and B(ii) above, on each Remittance Date on and after the
Remittance Date, if any, on which a Deficiency Event occurs, the Available
Distribution Amount remaining after making the distributions of interest on
the Senior Certificates required by clauses A(i) and B(i) above will be
applied to distribute the Formula Principal Distribution Amount on each Class
of Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates and
Class A-4 Certificates pro rata in accordance with the outstanding Principal
Balance of each such Class of Certificates; provided, further, that (I) the
aggregate amounts distributed on the Certificates on account of principal
shall not exceed their respective Original Principal Balances.
The distributions on the Certificates on each Remittance Date shall be
made such that the Trustee shall distribute (x) to the holder of each Class A
Certificate as of the preceding Record Date an amount equal to the product of
(1) the aggregate Percentage Interest evidenced by such Class A Certificate
and (2) as applicable, the Class A-1F Distribution Amount, the Class A-1V
Distribution Amount, Class A-2 Distribution Amount, Class A-3 Distribution
Amount, Class A-4 Distribution Amount, Class A-5 Distribution Amount for such
Remittance Date, (y) to the holder of each Class M-1 Certificate as of the
preceding Record Date an amount equal to the product of (1) the aggregate
Percentage Interest evidenced by such Class M-1 Certificates and (2) the Class
M-1 Distribution Amount for such Remittance Date, and (z) to the holder of
each
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Class B Certificate as of the preceding Record Date an amount equal to the
product of (1) the aggregate Percentage Interest evidenced by such Class B
Certificates and (2) as applicable, the Class B-1 Distribution Amount or Class
B-2 Distribution Amount for such Remittance Date.
The Trustee shall pay each Certificateholder of record by check mailed to
such Certificateholder at the address for such Certificateholder appearing on
the Certificate Register; provided that if such Certificateholder holds
Certificates with original denominations aggregating at least $5,000,000 and
has given the Trustee appropriate written instructions at least 5 Business
Days prior to the related Record Date (which instructions, until revised,
shall remain operative for all Remittance Dates thereafter), the Trustee shall
pay such Certificateholder by wire transfer of funds. If on any Determination
Date the Servicer determines that there are no Contracts outstanding and no
other funds or assets in the Trust Fund other than the funds in the
Certificate Account, the Servicer promptly shall instruct the Trustee to send
the final distribution notice to each Certificateholder and make provision for
the final distribution in accordance with Section 11.01(b). Final payment of
any Certificate shall be made only upon presentation of such Certificate at
the office or agency of the Certificate Registrar.
(b) On each Remittance Date for which the applicable Monthly Report
indicates that one or more Interest Deficiency Withdrawals is required, after
making the withdrawals and applications described in Section 6.01(a), the
Trustee shall, based upon the information set forth in the related Monthly
Report:
(A) withdraw from the Distribution Account an amount equal to
the Interest Deficiency Withdrawal with respect to such Remittance
Date and apply such amount to payment of the Interest Deficiency
Amount in the following order of priority:
(i) to the Class A-5 Certificates, the Class A-5 Interest Deficiency
Withdrawal, if any;
(ii) the Class M-1 Certificates, the Class M-1 Interest Deficiency
Withdrawal, if any; and
(iii) to the Class B-1 Certificates, the Class B-1 Interest
Deficiency Withdrawal, if any.
(c) On each Remittance Date, the Trustee shall, based upon the
information set forth in the Monthly Report for such Remittance Date, withdraw
from the Distribution Account (solely out of the Available Distribution Amount
for such Remittance Date after giving effect to the distributions made on the
Certificates (other than the Class R Certificate) pursuant to Section 6.01(a)
on such Remittance Date) and distribute to the Holder of the Class R
Certificate the Class R Distribution Amount for such Remittance Date. Such
distribution shall be made by a means that is mutually acceptable to the
Trustee and the Holder of the Class R Certificate.
(d) 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
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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 Certificates. None of the Trustee, the Certificate
Registrar, Vanderbilt and the Servicer shall have any responsibility therefor
except as otherwise provided by applicable law.
(e) On each Remittance Date the Trustee shall withdraw from the
Certificate Account an amount equal to the related Guarantee Payment for such
Remittance Date received by it from ▇▇▇▇▇▇▇ pursuant to Section 6.05 and
distribute such amount to the Class B-2 Certificateholders.
Section 6.02. Permitted Withdrawals from the Certificate Account. The
Servicer may, and in the case of clause (vii) below shall, from time to time
as provided herein, make or cause withdrawals from the Certificate Account of
amounts deposited therein pursuant to Section 5.05 for the following purposes:
(i) to pay to Vanderbilt with respect to each Contract or property
acquired in respect thereof that has been purchased or replaced pursuant
to Section 3.05 all amounts received thereon that are specified in such
Section to be property of Vanderbilt;
(ii) to reimburse itself for the payment of taxes out of Liquidation
Proceeds relating to a Contract (to the extent not previously retained
from such Liquidation Proceeds prior to their deposit) or out of payments
expressly made by the related Obligor to reimburse the Servicer for such
taxes, as permitted by Section 5.06;
(iii) if neither Vanderbilt nor a wholly owned subsidiary of
Vanderbilt is the Servicer, to pay to itself the Monthly Servicing Fee;
(iv) to reimburse itself or a previous Servicer out of Liquidation
Proceeds (to the extent not previously retained from Liquidation Proceeds
prior to their deposit in the Certificate Account) in respect of a
Manufactured Home and out of payments by the related Obligor (to the
extent of payments expressly made by the Obligor to reimburse the
Servicer for insurance premiums) for expenses incurred by it in respect
of such Manufactured Home that are specified as being reimbursable to it
pursuant to Section 5.07, 5.09 or 5.13 or to a previous Servicer under
Section 8.08;
(v) to reimburse itself for any Nonrecoverable Advance or Monthly
Advances with respect to the Contracts in accordance with Section 6.04(c)
and for advances in respect of Liquidated Contracts in accordance with
Section 6.04(c);
(vi) to reimburse the Servicer for expenses incurred with respect to
the Contracts and reimbursable to the Servicer pursuant to Section 8.06
(such reimbursement to be made only from funds that would otherwise be
distributed on the Class R Certificate pursuant to Section 6.01(a)A(xiii)
or 6.01 (a)B(xiii));
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(vii) to withdraw any amount deposited in the Certificate Account
that was not required to be deposited therein (including any collections
on the Contracts that, pursuant to Section 2.01(a), are not part of the
Trust Fund);
(viii) withdraw all amounts on deposit in the Certificate Account
which are to be deposited in the Distribution Account in respect of the
Available Distribution Amount;
(ix) withdraw amounts on deposit in the Certificate Account which
are to be deposited in the Distribution Account in respect of the
Interest Deficiency Withdrawal, if any; and
(x) withdraw any amounts necessary to pay any Taxes pursuant to
Section 5.17.
Since, in connection with withdrawals pursuant to clauses (i), (ii) and
(iv), 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
clauses.
The Servicer shall report withdrawals with respect to each Due Period
pursuant to this Section 6.02 in the related Monthly Report.
Section 6.03. [Reserved]
Section 6.04. Monthly Advances by the Servicer.
(a) By the close of business on each Determination Date the Servicer
shall deposit in the Certificate Account, out of its own funds, the related
Monthly Advance; provided, however, that any such deposit out of the
Servicer's own funds shall be made only to the extent necessary to cause the
Available Distribution Amount to be large enough to permit the distribution on
the related Remittance Date of the amounts computed as set forth in clauses
A(i) through (x) or B(i) through (x), inclusive, as applicable, of Section
6.01(a).
(b) On each Remittance Date, the Servicer shall reimburse itself for the
Outstanding Amount Advanced to the extent of actual collections of late
scheduled payments on the related Contracts.
(c) If the Servicer determines that any advance made pursuant to Section
6.04(a) has become a Nonrecoverable Advance and at the time of such
determination there exists an Outstanding Amount Advanced, then the Servicer
shall reimburse itself out of funds in the related Certificate Account for the
amount of such Nonrecoverable Advance, but only to the extent of such
Outstanding Amount Advanced.
Section 6.05. Limited Guarantee.
(a) No later than the third Business Day prior to each Remittance Date,
the Servicer (if other than ▇▇▇▇▇▇▇) shall notify ▇▇▇▇▇▇▇ of the amount of any
Guarantee Payment for such Remittance Date. Not later than the Business Day
preceding each Remittance Date, ▇▇▇▇▇▇▇
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shall deposit any such Guarantee Payment for such Remittance Date into the
related Certificate Account.
(b) The obligations of ▇▇▇▇▇▇▇ under this Agreement shall not terminate
upon or otherwise be affected by an Event of Default pursuant to Article IX of
this Agreement.
(c) The obligation of ▇▇▇▇▇▇▇ to provide the Limited Guarantee under this
Agreement shall terminate on the Final Remittance Date.
(d) The obligation of ▇▇▇▇▇▇▇ to make the Guarantee Payments described in
subsection (a) above shall be unconditional and irrevocable and shall
constitute an unsecured obligation of ▇▇▇▇▇▇▇ and will rank on a parity with
all other unsecured and unsubordinated indebtedness of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇
acknowledges that its obligation to make the Guarantee Payments described in
subsection (a) above shall be deemed a guarantee by ▇▇▇▇▇▇▇ of indebtedness of
the Trust Fund for money borrowed from the Class B-2 Certificateholders, and
▇▇▇▇▇▇▇ acknowledges and agrees that it has no right of reimbursement,
indemnity, exoneration, contribution or other similar right of recovery
arising from amounts expended pursuant to its obligations under this
Agreement, other than the right to receive distributions, to the extent
available, from the Trust Fund as provided in this Agreement. In no event
shall the amount paid on the Class B-2 Certificates in respect of principal
pursuant to the Limited Guarantee exceed the Original Class B-2 Principal
Balance.
(e) If ▇▇▇▇▇▇▇ fails to make a Guarantee Payment in whole or in part,
▇▇▇▇▇▇▇ shall promptly notify the Trustee in writing, and the Trustee shall
promptly notify the Rating Agencies. ▇▇▇▇▇▇▇ shall promptly notify the Rating
Agencies in the event of any termination of the Limited Guarantee or any
change of the Person providing the Limited Guarantee, including but not
limited to a change by merger.
Section 6.06. Alternate Credit Enhancement. ▇▇▇▇▇▇▇, at its option and
upon prior written notice to the Rating Agencies, may substitute an alternate
form of credit enhancement in place of the Limited Guarantee, provided that
(i) the Rating Agencies shall notify Clayton, Vanderbilt, the Servicer and the
Trustee in writing that such alternate form of credit enhancement shall not
result in a reduction in the then current ratings of the Certificates and (ii)
▇▇▇▇▇▇▇ shall cause to be delivered to the Trustee an Opinion of Counsel to
the effect that such substitution of credit enhancement shall not adversely
affect the status of the Trust Fund as a REMIC. Such alternate form of credit
enhancement can be in the form of cash or securities deposited by ▇▇▇▇▇▇▇ or
any other Person in a segregated escrow, trust or collateral account or a
letter of credit, certificate insurance policy or surety bond provided by a
third party.
Section 6.07. Calculation of the Remittance Rates with respect to the
Floating Rate Certificates. On the second LIBOR Business Day immediately
preceding each Remittance Date, the Trustee shall determine LIBOR for the
Interest Period commencing on such Remittance Date and inform the Servicer (at
the facsimile number given to the Trustee in writing) of such rates. On each
Determination Date, the Servicer shall determine the Class A-1V Remittance
Rate for the related Remittance Date.
[End of Article VI]
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Article VII
REPORTS
Section 7.01. Monthly Reports. Within two Business Days following each
Determination Date, the Servicer shall cause the Trustee to receive a report
(the "Monthly Report"), which shall include the following information with
respect to the immediately following Remittance Date:
(a) the Class A-1F Distribution Amount, the Class A-1V Distribution
Amount, the Class A-2 Distribution Amount, the Class A-3 Distribution
Amount, the Class A-4 Distribution Amount, the Class A-5 Distribution
Amount, the Class M-1 Distribution Amount, the Class B-1 Distribution
Amount and the Class B-2 Distribution Amount for such Remittance Date;
(b) the amount of principal to be distributed on each Class of the
Class A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates,
Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates,
Class M-1 Certificates, Class B-1 Certificates and Class B-2 Certificates
on such Remittance Date, separately stating the amounts specified in
clauses (a) through (f) of the Formula Principal Distribution Amount
definition;
(c) the amount of interest to be distributed on each Class of the
Class A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates,
Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates,
Class M-1 Certificates, Class B-1 Certificates and Class B-2 Certificates
on such Remittance Date (separately identifying any Class A-1F Unpaid
Interest Shortfall, Class A-1V Unpaid Interest Shortfall, Class A-2
Unpaid Interest Shortfall, Class A-3 Unpaid Interest Shortfall, Class A-4
Unpaid Interest Shortfall, Class A-5 Unpaid Interest Shortfall, Class M-1
Unpaid Interest Shortfall, Class B-1 Unpaid Interest Shortfall and Class
B-2 Unpaid Interest Shortfall included in such distribution) and the
Remittance Rate for each such Class of Certificates for such Remittance
Date;
(d) the remaining Class A-1F Principal Balance, Class A-1V Principal
Balance, Class A-2 Principal Balance, Class A-3 Principal Balance, Class
A-4 Principal Balance, Class A-5 Principal Balance, Class M-1 Principal
Balance, Class B-1 Principal Balance and Class B-2 Principal Balance
after giving effect to the payment of principal to be made on such
Remittance Date (on which interest will be calculated on the next
succeeding Remittance Date);
(e) the total amount of fees payable on such Remittance Date,
separately identifying the Monthly Servicing Fee, any related
reimbursement to Vanderbilt pursuant to Section 6.04, and any related
Late Payment Fees, Extension Fees and assumption fees paid during the
prior Due Period;
(f) the number and aggregate unpaid principal balance of the
Contracts with payments delinquent 31 to 59, 60 to 89, and 90 or more
days, respectively;
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(g) the number of Contracts that were repurchased by Vanderbilt in
accordance with Section 3.05 during the prior Due Period, identifying
such Contracts and the Repurchase Price of such Contracts;
(h) the Pool Factor for the Class A-1F Certificates, Class A-1V
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class M-1 Certificates, Class B-1
Certificates and Class B-2 Certificates after giving effect to the
payment of principal to be made on such Remittance Date;
(i) the Class R Distribution Amount, if any, for such Remittance
Date, separately stating any Repossession Profits;
(j) the aggregate principal balances of all Contracts that are not
Liquidated Contracts and in respect of which the related Manufactured
Homes have been repossessed or foreclosed upon;
(k) the Aggregate Net Liquidation Losses through the Due Period
immediately preceding such Remittance Date;
(l) the amount, if any, by which the Class B-2 Formula Distribution
Amount exceeds the Remaining Amount Available for such Remittance Date;
(m) the Class B-2 Principal Liquidation Loss Amount, if any, for
such Remittance Date;
(n) the Guarantee Payment with respect to the Class B-2
Certificates, if any, for such Remittance Date;
(o) the amount of any related unadvanced shortfalls for the prior
Due Period;
(p) the number and dollar amount of units repossessed during the
prior Due Period;
(q) the amount of any Principal Prepayments paid with respect to the
Contracts during the prior Due Period;
(r) the amount of any Scheduled Principal Payments to be made with
respect to the Contracts on such Remittance Date;
(s) the weighted average annual percentage rate of interest for the
Contracts remaining in the Contract Pool on such Remittance Date;
(t) the Interest Deficiency Amount and Interest Deficiency
Withdrawal, if any, for each of the Class A-5, Class M-1 and Class B-1
Certificates with respect to such Remittance Date; and
(u) a summary of withdrawals from the Certificate Account pursuant
to Section 6.02 of this Agreement.
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The Trustee shall send copies of all Monthly Reports to the Rating
Agencies. The Trustee shall have no duty to recalculate or verify the
information provided to it by the Servicer.
Section 7.02. Certificate of Servicing Officer. Each Monthly Report
pursuant to Section 7.01 shall be accompanied by a certificate of a Servicing
Officer substantially in the form of Exhibit G, certifying the accuracy of the
Monthly Report and that no Event of Default or event that with notice or lapse
of time or both would become an Event of Default has occurred, or if such
event has occurred and is continuing, specifying the event and its status.
Section 7.03. Other Data and Consultation with the Trustee. The Servicer,
on request of the Trustee, shall furnish the Trustee such underlying data as
may reasonably be requested by the Trustee. In addition, upon reasonable
request of the Trustee, the Servicer shall consult with the Trustee and the
Servicer shall provide such additional written information and certifications
as may be reasonably requested by the Trustee (provided that such information
or certification are reasonably obtainable or certifiable and otherwise within
the realm of the Servicer's responsibilities under the Agreement) before
taking or suffering any action hereunder if the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering any action in the administration of the provisions of this
Agreement.
Section 7.04. Annual Statement as to Compliance. The Servicer will
deliver to Vanderbilt, the Trustee and the Rating Agencies on or before the
first day of the fifth month following the end of the Servicer's fiscal year,
initially November 1, 2003, an Officer's Certificate stating, as to each
signer thereof, that (i) a review of the activities of the Servicer during
such preceding fiscal year and of performance under this Agreement has been
made under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. The Servicer
shall notify the Trustee in the event of a change in the Servicer's fiscal
year.
Section 7.05. Annual Independent Public Accountants' Servicing Report. On
or before November 1 of each year, beginning with November 1, 2003, 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
furnish a statement to Vanderbilt, the Trustee and the Rating Agencies to the
effect that such firm has examined certain documents and records relating to
the servicing of the Contracts under this Agreement and, at the option of the
Servicer, manufactured housing installment sale contracts under pooling and
servicing agreements substantially similar to this Agreement with regard to
servicing procedures (such statement to have attached thereto a schedule
setting forth the pooling and servicing agreements covered thereby, including
this Agreement) and that, on the basis of such examination conducted
substantially in compliance with this Agreement or such agreements, as the
case may be, and generally accepted auditing standards, such servicing has
been conducted in compliance with this Agreement or such pooling and servicing
agreements, as the case may be, except for (i) such exceptions as such firm
believes to be immaterial and (ii) such other exceptions that, in the opinion
of such firm, generally accepted auditing standards require it to report. For
purposes of such statement, such firm may assume conclusively that all pooling
and servicing agreements among Vanderbilt, the Servicer and the Trustee
relating to certificates evidencing an interest in manufactured housing
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contracts are substantially similar to one another except for any such pooling
and servicing agreement which by its terms specifically states otherwise.
Section 7.06. Statements to Certificateholders.
(a) Concurrently with each distribution to Certificateholders pursuant to
Article VI, the Trustee shall mail, or cause the Paying Agent to mail, to the
Certificateholders, at the addresses appearing on the Certificate Register, a
statement as of the related Remittance Date prepared by the Servicer setting
forth:
(1) the Class A-1F Distribution Amount, the Class A-1V Distribution
Amount, the Class A-2 Distribution Amount, the Class A-3 Distribution
Amount, the Class A-4 Distribution Amount, the Class A-5 Distribution
Amount, the Class M-1 Distribution Amount, the Class B-1 Distribution
Amount, the Class B-2 Distribution Amount and the Class R Distribution
Amount for such Remittance Date;
(2) the amount of principal to be distributed on each Class of the
Class A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates,
Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates,
Class M-1 Certificates, Class B-1 Certificates and Class B-2 Certificates
on such Remittance Date, separately stating the amounts specified in
clauses (a) through (f) of the Formula Principal Distribution Amount
definition;
(3) the amount of interest to be distributed on each Class of the
Class A-1F Certificates, Class A-1V Certificates, Class A-2 Certificates,
Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates,
Class M-1 Certificates, Class B-1 Certificates and Class B-2 Certificates
on such Remittance Date (separately identifying any Class A-1F Unpaid
Interest Shortfall, Class A-1V Unpaid Interest Shortfall, Class A-2
Unpaid Interest Shortfall, Class A-3 Unpaid Interest Shortfall, Class A-4
Unpaid Interest Shortfall, Class A-5 Unpaid Interest Shortfall, Class M-1
Unpaid Interest Shortfall, Class B-1 Unpaid Interest Shortfall or Class
B-2 Unpaid Interest Shortfall included in such distribution) and the
related Remittance Rate for each such Class for such Remittance Date;
(4) the remaining Class A-1F Principal Balance, Class A-1V Principal
Balance, Class A-2 Principal Balance, Class A-3 Principal Balance, Class
A-4 Principal Balance, Class A-5 Principal Balance, Class M-1 Principal
Balance, Class B-1 Principal Balance and Class B-2 Principal Balance
after giving effect to the payment of principal to be made on such
Remittance Date (on which interest will be calculated on the next
succeeding Remittance Date);
(5) the number and aggregate unpaid principal amount of Contracts
that are delinquent 31 to 59 days, 60 to 89 days, and 90 or more days,
respectively;
(6) the total amount of fees payable out of the Trust Fund for such
Due Period;
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(7) the Pool Factor for each Class of Certificates after giving
effect to the distribution on such Remittance Date;
(8) such other customary factual information available to the
Servicer as the Servicer deems necessary and can obtain reasonably from
its existing data base to enable the Certificateholders to prepare their
tax returns;
(9) the amount, if any, by which the Class B-2 Formula Distribution
Amount exceeds the Remaining Amount Available for such Remittance Date;
(10) the Class B-2 Principal Liquidation Loss Amount, if any, for
such Remittance Date; and
(11) the Guarantee Payment, if any, for such Remittance Date.
In the case of information furnished pursuant to clauses (1) through (4)
above, the amounts shall be expressed as a dollar amount per Certificate with
a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
subject to the next sentence, but in no event later than 90 days after the end
of such year, the Servicer shall prepare and furnish to the Trustee, and the
Trustee, promptly upon receipt, shall furnish to each Person who at any time
during the calendar year was the Holder of a Certificate, a statement
containing the information set forth in clauses (2) and (3) above, aggregated
for such calendar year or applicable portion thereof during which such Person
was a Certificateholder. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Servicer pursuant to any requirements of the Code as
from time to time in force.
On each Remittance Date, if the Servicer is not the Holder of the Class R
Certificate, the Servicer shall forward or cause to be forwarded by mail to
the Holder of the Class R Certificate a copy of the report forwarded to the
Holders of Certificates on such Remittance Date. If the Servicer is not the
Holder of the Class R Certificate, the Servicer shall also forward or cause to
be forwarded by mail to the Holder of the Class R Certificate a statement
setting forth the amount of the distribution to the Holder of the Class R
Certificate, together with such other information as the Servicer deems
necessary or appropriate.
Within a reasonable period of time after the end of each calendar year,
the Servicer shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the holder of the Residual Interest 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 the Class R Certificate.
Such obligation of the Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Code as from time to time
enforced.
A Certificateholder holding Certificates of a Class representing in the
aggregate at least 5% of the Percentage Interest of such Class shall, upon
written request to the Trustee, be entitled to receive copies of all reports
provided to the Trustee.
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The Servicer shall send copies of all reports provided to the Trustee for
the Certificateholders to each of the Underwriters.
[End of Article VII]
85
Article VIII
INDEMNITIES; VANDERBILT AND THE SERVICER
Section 8.01. Liabilities to Obligors. No liability to any Obligor under
any of the Contracts arising out of any act or omission to act of the Servicer
in servicing the Contracts prior to the Closing Date is intended to be assumed
by the Trustee 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 Trustee and the
Certificateholders expressly disclaim such assumption.
Section 8.02. Tax Indemnification. Vanderbilt agrees to pay, and to
indemnify, defend and hold harmless the Trust or any separate trustee, the
Trustee, the Certificate Registrar, each Paying Agent and the
Certificateholders from any taxes and related penalties which may at any time
be asserted with respect to, and as of the date of, the transfer of the
Contracts from Vanderbilt to the Trust or any separate trustee, including,
without limitation, any sales, gross receipts, general corporation, personal
property, privilege or license taxes (but not including any income or
franchise taxes or federal, state or other taxes arising out of the creation
of the Trust Fund and the issuance of the Certificates or distributions with
respect thereto) or tax due under Tenn. Code ▇▇▇. ss.67-4-409(b) or any
successor provision and, in each such case, costs, expenses and reasonable
counsel fees in defending against the same. The Servicer shall promptly notify
the Trustee and the Rating Agencies in writing, and the Trustee shall promptly
notify the Rating Agencies, in the event that either such party becomes aware
of the assertion of a claim or imposition of a lien by the Tennessee
Department of Revenue arising out of any characterization by such Department
of the transfer of the Contracts to the Trustee or any separate trustee as a
secured financing rather than a sale for purposes of the Tennessee
indebtedness tax.
Section 8.03. Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust Fund, the Trustee, the Certificate Registrar, each Paying
Agent, Vanderbilt and the Certificateholders and each of their officers,
directors, employees, representatives and agents from and against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation, arising from third
party claims or actions in respect of any action taken or failed to be taken
by the Servicer or a prior owner of Acquired Contracts or servicer on behalf
of such owner with respect to any Contract or Manufactured Home and any
failure by the Servicer to perform its obligations in compliance with the
standard of care set forth in this Agreement. This indemnity shall survive any
Event of Default (but a Servicer's obligations under this Section 8.03 shall
not relate to any actions of any subsequent Servicer after an Event of
Default) and any payment of the amount owing under, or any repurchase by
Vanderbilt of, any such Contract.
Section 8.04. Operation of Indemnities. Indemnification under this
Article shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If Vanderbilt 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 Trustee will repay
such amounts collected to Vanderbilt or the Servicer, as the case may be,
together with any interest collected thereon, but reduced by interest on
amounts paid by the Trustee through the
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date of reimbursement. The indemnities under this Article shall survive the
termination of this Agreement and any resignation or removal of the Trustee.
Section 8.05. Merger or Consolidation of Vanderbilt or the Servicer.
Vanderbilt and the Servicer will each keep in full effect its existence,
rights and franchises as a corporation or association, as the case may be, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Contracts and to perform its duties under this
Agreement.
Any Person into which Vanderbilt or the Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion or
consolidation to which Vanderbilt or the Servicer shall be a party, or any
Person succeeding to the business of Vanderbilt or the Servicer, shall be the
successor of Vanderbilt or 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
requirements of Section 8.08 with respect to the qualifications of a successor
to the Servicer. Each of Vanderbilt and the Servicer shall promptly notify the
Trustee and the Rating Agencies in writing of any such merger to which it is a
party.
Section 8.06. Limitation on Liability of the Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Trustee or the Certificateholders
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such person
against any liability that would otherwise be imposed by reason of the failure
to perform its obligations in strict compliance with the standard of care set
forth in this Agreement. The Servicer and any director, officer, employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. Except as may be required to comply with its standard of
care, the Servicer shall not be under any obligation to appear in, prosecute
or defend any legal action which arises under this Agreement and which in its
opinion may involve it in any expenses or liability; provided, however, that
the Servicer may in its discretion undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the related Certificate Account and the Servicer
shall be entitled to be reimbursed therefor out of such Certificate Account as
provided by Section 6.02; provided that such reimbursement shall be made, from
time to time on one or more Remittance Dates, only out of the Available
Distribution Amount for such Remittance Date that remains after the
distributions on the Class A Certificates, Class M-1 Certificates and Class B
Certificates for such Remittance Date have been made.
Section 8.07. Assignment by Servicer. The Servicer may, with the prior
written consent of Vanderbilt, assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which executes and delivers to
Vanderbilt and the Trustee an agreement, in form and substance reasonably
satisfactory to Vanderbilt and the Trustee, which contains an assumption by
such
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Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Servicer under this Agreement;
provided further that the Rating Agencies' rating of the Class A Certificates,
Class M-1 Certificates and Class B Certificates in effect immediately prior to
such assignment and delegation will not be withdrawn or reduced as a result of
such assignment and delegation, as evidenced by a letter addressed to the
Servicer and the Trustee from the Rating Agencies. In the case of any such
assignment and delegation, the Servicer shall be released from its obligations
under this Agreement, except that the Servicer shall remain liable for all
liabilities and obligations incurred by it as Servicer hereunder prior to the
satisfaction of the conditions to such assignment and delegation set forth in
the next preceding sentence.
Section 8.08. Successor to the Servicer. In connection with the
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Section 9.01, the Trustee shall (i) succeed to and assume all of
the Servicer's responsibilities, rights, duties and obligations under this
Agreement (except the duty to pay and indemnify the Trustee pursuant to
Section 10.05 hereof, which duty shall remain the obligation of the initial
Servicer), or (ii) appoint a successor acceptable to Vanderbilt, which shall
have a net worth of not less than $10,000,000 and shall have serviced for at
least one year prior to such appointment a portfolio of not less than
$100,000,000 principal amount of manufactured housing installment sale
contracts or installment loans and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement (except that the
duty to pay and indemnify the Trustee pursuant to Section 10.05 hereof shall
be subject to negotiation at the time of such appointment). If the Trustee has
become the successor to the Servicer in accordance with this Section, the
Trustee may, if it shall be unwilling to continue to so act, or shall, if it
is unable to so act, appoint or petition a court of competent jurisdiction to
appoint, a successor satisfying the requirements set out in clause (ii) above.
In connection with any appointment of a successor Servicer, the Trustee may
make such arrangements for the compensation of such successor out of payments
on Contracts as it and such successor shall agree or such court shall
determine; provided, however, that no such compensation shall be in excess of
a monthly amount equal to 1/12 of the product of 1.25% and the Pool Scheduled
Principal Balance for the Remittance Date in respect of which such
compensation is being paid without the consent of all of the
Certificateholders and notice to the Rating Agencies. If the Servicer's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to Sections 8.07 or 9.01, the Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, shall cooperate with the Trustee and any successor Servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The assignment by a
Servicer pursuant to Section 8.07 or removal of Servicer pursuant to Section
9.01 shall not become effective until a successor shall be appointed pursuant
to this Section and shall in no event relieve Vanderbilt of liability pursuant
to Section 3.05 for breach of the representations and warranties made pursuant
to Section 3.02 or 3.03.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such
88
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like
effect as if originally named as a party to this Agreement and the
Certificates. Any assignment by or termination of the Servicer pursuant to
Section 8.07 or 9.01 or the termination of this Agreement pursuant to Section
11.01 shall not affect any claims that the Trustee may have against the
Servicer arising prior to any such termination or resignation.
The Servicer shall, at its expense, timely deliver to the successor, or
shall cause such delivery of, the funds in the Certificate Account and all
Contract Files and related documents and statements held by it hereunder and
the Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as reasonably may be required to more
fully and definitely vest and confirm in the successor all such rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer.
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, transfer
instruments in respect of certificates of title and financing statements
relating to the Manufactured Homes), and to do any and all acts or things
necessary or appropriate to effect the purposes of such notice of termination.
Upon a successor's acceptance of appointment as such, the Trustee shall
notify in writing the Certificateholders of such appointment.
[End of Article VIII]
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Article IX
DEFAULT
Section 9.01. Events of Default. In case one or more of the following
Events of Default shall occur and be continuing:
(a) any failure by the Servicer to make any deposit or payment, or
to remit to the Trustee any payment, required to be made under the terms
of this Agreement which continues unremedied for a period of five days
after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee
or Vanderbilt (which shall also give such notice to the Trustee) or to
the Servicer, the Trustee and Vanderbilt by the Holders of Certificates
evidencing not less than 25% of the Trust Fund; or
(b) failure on the part of the Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues
unremedied for a period of 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 Vanderbilt (which shall also give such
notice to the Trustee), or to the Servicer, the Trustee and Vanderbilt by
the Holders of Certificates evidencing not less than 25% of the Trust
Fund; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law
or appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days;
or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to all or substantially all of
the Servicer's property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations or take any corporate action in furtherance of the foregoing;
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Trustee may, and at the written direction of the
Holders of the Certificates evidencing not less than 25% of the Trust Fund, by
notice in writing to the Servicer shall, terminate all the rights and
obligations of the Servicer under this Agreement and in and to the
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Contracts and the proceeds thereof. The Trustee shall send a copy of any such
notice to the Rating Agencies. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Contracts or otherwise, shall pass to and be
vested in the successor appointed pursuant to Section 8.08. Upon the
occurrence of an Event of Default which shall not have been remedied, the
Trustee may also pursue whatever rights it may have at law or in equity to
damages, including injunctive relief and specific performance. The Trustee
will have no obligation to take any action or institute, conduct or defend any
litigation under this Agreement at the request, order or direction of any of
the Holders of Certificates unless such Certificateholders have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities (financial or otherwise) which the Trustee may incur.
Section 9.02. Waiver of Defaults. The Trustee may waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except that a default in the making of any required remittance
to the Trustee for distribution on any of the Certificates may be waived only
by the affected Certificateholders. Upon any such waiver of a past default,
such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so waived.
Section 9.03. Trustee to Act; Appointment of Successor. On and after the
time the Servicer receives a notice of termination pursuant to Section 9.01,
the Trustee or its appointed agent shall be the successor in all respects to
the Servicer as provided in Section 8.08 hereof.
Section 9.04. Notification to Certificateholders.
(a) Upon any such termination pursuant to Section 9.01, the Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
(b) Within 60 days after the occurrence of any Event of Default known to
a Responsible Officer of the Trustee, the Trustee shall transmit by mail to
all Holders of Certificates, notice of each such Event of Default hereunder
known to the Trustee, unless such Event of Default shall have been cured or
waived.
Section 9.05. Effect of Transfer.
(a) After a transfer of servicing duties to a successor Servicer pursuant
to Section 8.05, 8.07, 8.08 or 9.01, the Trustee or new Servicer may notify
Obligors to make payments that are due under the Contracts after the effective
date of the transfer of servicing duties directly to the new Servicer.
(b) After the transfer of servicing duties to a successor Servicer
pursuant to Section 8.05, 8.07, 8.08 or 9.01, the replaced Servicer shall have
no further obligations with respect to the management, administration,
servicing or collection of the Contracts, except to affect an orderly
transition of the servicing function, but in the case of a transfer pursuant
to Section 8.08 or 9.01
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shall remain liable for any liability of the Servicer hereunder and shall
remain entitled to any compensation due the Servicer that had already accrued
prior to such transfer.
(c) A transfer of servicing duties to a successor Servicer shall not
affect the rights and duties of the parties hereunder (including but not
limited to the indemnities of the Servicer pursuant to Article VIII) other
than those relating to the management, administration, servicing or collection
of the Contracts.
Section 9.06. Transfer of the Accounts. Notwithstanding the provisions of
Section 9.01, if the Certificate Account shall be maintained with the Servicer
or an Affiliate of the Servicer and an Event of Default shall occur and be
continuing, the Servicer, after five days' written notice from the Trustee, or
in any event within ten days after the occurrence of the Event of Default,
shall establish a new account or accounts, which shall be Eligible Accounts,
conforming with the requirements of this Agreement at the trust department of
the Trustee or with a depository institution other than the Servicer or an
Affiliate of the Servicer and promptly transfer all funds in the Certificate
Account to such new Certificate Account, which shall thereafter be deemed the
Certificate Account for the purposes hereof.
[End of Article IX]
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Article X
CONCERNING THE TRUSTEE
Section 10.01. Duties of Trustee. The Trustee, prior to the occurrence of
an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
set forth specifically in this Agreement. In case an Event of Default known to
the Trustee shall have occurred (which has not been cured or waived), 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 required specifically to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform, on their faces, to the requirements of this Agreement.
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:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge, and after
the curing or waiver of all such Events of Default 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 rely
conclusively, 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, if specifically required to be furnished
pursuant to any provision of this Agreement, conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be liable personally for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable personally with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing not
less than 25% of the Trust Fund as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; and
(iv) The Trustee shall not be charged with knowledge of an Event of
Default until such time as a Responsible Officer shall have actual
knowledge or have received written notice thereof.
93
None of the provisions contained in this Agreement shall require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of 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.
Section 10.02. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
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 written advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such written advice or
Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
trusts 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 satisfactory to
it against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
(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) Neither the Trustee nor any of its officers, directors,
employees or agents shall be liable personally for any action taken,
suffered or omitted by them in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(e) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge hereunder and
after the curing or waiver of all Events of Default 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
the Holders of Certificates evidencing Fractional Interests aggregating
not less than 25%; 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
94
of this Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to such proceeding. The
reasonable expense of every such examination shall be paid by the
Servicer, if an Event of Default shall have occurred and is continuing,
and otherwise by the Certificateholders requesting the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through
co-trustees, separate trustees, agents (including appointing a custodian
to maintain custody of the Land-and-Home Contract Files and the Mortgage
Loan Files) or attorneys and the Trustee shall not be liable or
responsible for the misconduct or negligence of any such agent or
attorney appointed with due care; provided, however, that any Affiliate
of Vanderbilt may only perform ministerial or custodial duties hereunder
as agent for the Trustee;
(g) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act;
(h) The Trustee shall not be required to take any action at the
request or direction of the Holders of the Certificates if the Trustee
determines that such action conflicts with any rule of law or this
Agreement;
(i) None of the provisions of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise to incur any
liability, financial or otherwise, in the performance of any of its
duties hereunder, or in the exercise of any of its right or powers if it
shall have reasonable grounds for believing that repayment of such funds
or indemnity satisfactory to it against such risk or liability is not
assured to it; and
(j) The Trustee in issuing Certificates may use "CUSIP," "CINS" and
"ISIN" numbers (if then generally in use), and the Trustee shall use
CUSIP, CINS or ISIN numbers, as the case may be, in notices as a
convenience to Holders and no representation shall be made as to the
correctness of such numbers either as printed on the Certificates or as
contained in any notice.
(k) Funds in the Certificate Account and the Pre-Funding Account
shall only be invested in accordance with Sections 5.05 and 5.19. Any
losses incurred on such investment and reinvestment of funds in the
Certificate Account or the Pre-Funding Account shall be debited against
the Certificate Account or the Pre-Funding Account, respectively. In no
event shall the Trustee be liable for the selection of investments,
investment losses incurred thereon, losses incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure
of the Servicer to provide timely written investment direction. It is
agreed and understood that the entity serving as Trustee may earn fees
associated with the investments outlined above in accordance with the
terms of such investments. In no event shall the Trustee be deemed an
investment manager or adviser in respect of any selection of investments
hereunder.
Section 10.03. Trustee Not Liable for Certificates or Contracts. The
recitals contained herein and in the Certificates (other than the
countersignature of the Certificates) shall be taken
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as the statements of Vanderbilt or the Servicer, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations or warranties as to the validity or sufficiency of this
Agreement, of the Certificates (except that the Certificates shall be duly and
validly countersigned by it), of any Contract or related document or the
conveyance of the Contracts and any related Mortgages or documents. The
Trustee shall not be accountable for the use or application by Vanderbilt of
any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to Vanderbilt or the Servicer in respect
of the Contracts or deposited in or withdrawn from the Certificate Account by
Vanderbilt or the Servicer. The Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Trustee shall have become
the successor Servicer) or to prepare or file any Securities and Exchange
Commission filing for the trust created hereby or to record this Agreement.
Section 10.04. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates, and may deal with ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and the Servicer in
banking transactions, with the same rights it would have if it were not
Trustee.
Section 10.05. Servicer to Pay Fees and Expenses of Trustee. The Servicer
covenants and agrees to pay, from its own funds, to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) for all services rendered by it in the
execution of the trust hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee. The Servicer will pay
(out of its own funds) or 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 of the provisions of this
Agreement or incurred in connection with the administration of the Trustee's
duties hereinunder and the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its employ
(including any custodian), and the expenses incurred by the Trustee in
connection with the appointment of an office or agency pursuant to Section
10.11 except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Servicer also covenants and agrees to indemnify
(out of its own funds) the Trustee for, and to hold it harmless against, any
loss, liability or expense arising out of or in connection with the acceptance
or administration of this trust and its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder,
except any such loss, liability or expense arising from any negligence or bad
faith on the part of the Trustee. The covenants in this Section 10.05 shall be
for the benefit of the Trustee in its capacities as Trustee, Paying Agent and
Certificate Registrar hereunder, and shall survive the termination of this
Agreement or the earlier resignation or removal of the Trustee. If the Trustee
renders services and incurs expenses following an Event of Default because of
either voluntary or involuntary bankruptcy of the Servicer, such expenses are
intended to be expenses of administration under any bankruptcy law.
Section 10.06. Eligibility Requirements for Trustee. There shall at all
times be a Trustee hereunder which shall be either (a) JPMorgan Chase Bank or
any other Person into which JPMorgan Chase Bank is merged or consolidated or
to which substantially all of the properties
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and assets of JPMorgan Chase Bank are transferred as an entirety, and
provided, further, that such entity is authorized to exercise corporate trust
powers under the laws of the United States of America, any state thereof or
the District of Columbia and has all necessary trust powers to perform its
obligations hereunder, or (b) a corporation or banking association organized
and doing business under the laws of the United States of America, any state
thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or state
authority and with a long-term debt rating of at least Baa3 or a short-term
debt rating of at least Prime-3. If the corporation or banking association
referred to in clause (b) of the previous sentence publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation or banking association shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 10.07. Resignation and Removal of the Trustee. The Trustee at any
time may resign and be discharged from the trusts hereby created by giving
written notice thereof to Vanderbilt, the Servicer and the Rating Agencies.
Upon receiving such notice of resignation, Vanderbilt promptly shall appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
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 10.06 and shall fail to resign after written request
therefor by Vanderbilt, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged 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 Vanderbilt may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Certificates evidencing more than 50% of the Trust Fund
may remove the Trustee at any time and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Certificateholders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to Vanderbilt, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 10.08 and upon payment to the resigning Trustee all amounts due and
owing to it hereunder.
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Section 10.08. Successor Trustee. Any successor trustee appointed as
provided in Section 10.07 shall execute, acknowledge and deliver to Vanderbilt
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 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 the like effect as if originally named as trustee
herein. The predecessor trustee shall execute and deliver such instruments and
do such other things as reasonably may be required for more 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
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 10.06.
Upon acceptance of appointment by a successor trustee as provided in this
Section, Vanderbilt shall mail notice of the succession of such trustee
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register, to the Servicer and to the Rating Agencies. If
Vanderbilt fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of Vanderbilt.
Section 10.09. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the business of the Trustee, shall
be the successor of the Trustee hereunder, provided such corporation shall be
eligible under the provisions of Section 10.06, 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.
Section 10.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
(i) meeting any legal requirements of any jurisdiction in which any part of
the Trust Fund or property securing the same may be located at the time or
(ii) meeting any legal requirements with respect to the holding of the
Contracts, the Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such
title to the Trust Fund, or any part thereof, and, subject to the other
provisions of this Section 10.10, such powers, duties, obligations, rights and
trusts as the Servicer and the Trustee may consider necessary or desirable. If
the Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
10.06 hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 10.08
hereof. The Servicer shall
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be responsible for the fees and expenses of any co-trustee or separate trustee
appointed hereunder to the extent and in the manner set forth for the Trustee
in Section 10.05.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed or any regulation applicable to
any of the Contracts (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article X. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
Any separate trustee or co-trustee may, at any time, appoint the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent
not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Nothing in this Section shall relieve the Trustee of its duties,
obligations or liabilities under this Agreement.
Section 10.11. Appointment of Office or Agency. The Trustee will appoint
an office or agency in The City of New York where Certificates may be
surrendered for registration of transfer or exchange. The Trustee initially
designates its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ for such purposes. The Certificate Register may be kept in an electronic
form capable of printing out a hard copy of the Certificate Register. The
Trustee will maintain an office at the address stated in Section 12.10 hereof
where notices and demands to or upon the Trustee in respect of the
Certificates may be served. The Trustee will give prompt written notice to
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
Section 10.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production
99
thereof in any proceeding relating thereto. Any such proceeding instituted by
the Trustee shall be brought in its own name or in its capacity as Trustee.
Any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Certificateholders
in respect of which such judgment has been recovered.
Section 10.13. Suits for Enforcement. In case an Event of Default or
other default by the Servicer or of Vanderbilt shall occur and be continuing,
the Trustee, in its discretion may proceed to protect and enforce its rights
and the rights of the Certificateholders under this Agreement by a suit,
action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement
or in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy, as the Trustee,
being advised by counsel, shall deem most effectual to protect and enforce any
of the rights of the Trustee or the Certificateholders.
Section 10.14. Rights of Paying Agent and Certificate Register. So long
as the Trustee shall serve as Paying Agent and Certificate Register under this
Agreement, the Paying Agent and Certificate Register shall be afforded the
same rights, protections, immunities and indemnities afforded the Trustee
herein.
[End of Article X]
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Article XI
TERMINATION
Section 11.01. Termination.
(a) The respective obligations and responsibilities of Vanderbilt, the
Servicer (except as to Section 10.05) and the Trustee shall terminate upon:
(i) the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Contract or the disposition of all property
acquired upon repossession of any Contract and the remittance of all funds due
hereunder; or (ii) at the option of Vanderbilt (if Vanderbilt is not the
Servicer) or the Servicer, on any Remittance Date after the first Remittance
Date on which the aggregate scheduled principal balances of the Contracts at
the end of the related Due Period are less than 10% of the Pool Original
Principal Balance, upon the purchase of the Contracts at a price equal to the
greater of (a) the sum of (x) 100% of the principal balance of each Contract
(other than any Contract as to which the related Manufactured Home has been
repossessed and not yet disposed of and whose fair market value is included
pursuant to clause (y) below) as of the final Remittance Date, and (y) the
fair market value of such acquired property (as determined by Vanderbilt or
the Servicer, as the case may be, 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 this Section), and (b) the
aggregate fair market value (as determined by Vanderbilt or the Servicer, as
the case may be, as of the close of business on such third Business Day) of
all of the assets of the Trust Fund, plus, in the case of both (a) and (b),
any Class A-1F Unpaid Interest Shortfall, Class A-1V Unpaid Interest
Shortfall, any Class A-2 Unpaid Interest Shortfall, any Class A-3 Unpaid
Interest Shortfall, any Class A-4 Unpaid Interest Shortfall, any Class A-5
Unpaid Interest Shortfall, any Class M-1 Unpaid Interest Shortfall, any Class
B-1 Unpaid Interest Shortfall and any Class B-2 Unpaid Interest Shortfall, as
well as one month's interest at the applicable APR on the Scheduled Principal
Balance of each Contract (including any Contract as to which the related
Manufactured Home has been repossessed or foreclosed upon and not yet disposed
of); provided, however, 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. James's, living on the date hereof. Notwithstanding
the foregoing, the option specified in clause (ii) of this Section 11.01(a)
shall not be exercisable if there will not be distributed on the Class A-1F
Certificates, Class A-1V Certificates, Class A-2 Certificates, Class A-3
Certificates, Class A-4 Certificates, Class A-5 Certificates, Class M-1
Certificates, Class B-1 Certificates and Class B-2 Certificates an amount
equal to the Class A-1F Principal Balance, Class A-1V Principal Balance, Class
A-2 Principal Balance, Class A-3 Principal Balance, Class A-4 Principal
Balance, Class A-5 Principal Balance, Class M-1 Principal Balance, Class B-1
Principal Balance and Class B-2 Principal Balance, respectively, together with
the Class A-1F Unpaid Interest Shortfall, Class A-1V Unpaid Interest
Shortfall, Class A-2 Unpaid Interest Shortfall, Class A-3 Unpaid Interest
Shortfall, Class A-4 Unpaid Interest Shortfall, Class A-5 Unpaid Interest
Shortfall, Class M-1 Unpaid Interest Shortfall, Class B-1 Unpaid Interest
Shortfall and Class B-2 Unpaid Interest Shortfall, respectively, and interest
accrued during the related Interest Period on the Principal Balance of each
such Class of Certificates at the related Remittance Rate. If Vanderbilt and
the Servicer both desire to exercise the option in clause (ii) of this
paragraph on any Remittance Date after the
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first Remittance Date on which the Scheduled Principal Balance is less than
10% of the Original Principal Balance, the Servicer shall have the prior right
to exercise such option.
(b) Notice of any termination, specifying the Remittance Date upon which
all Certificateholders may surrender their Certificates to the Trustee for
payment and cancellation, shall be given promptly by the Servicer (if
Vanderbilt is exercising the option given it in Section 11.01(a), upon
direction by Vanderbilt given 10 days prior to the date such notice is to be
mailed) by letter to Certificateholders, the Trustee and the Rating Agencies
mailed no later than the 15th day of the month preceding the month of such
final distribution specifying (i) the 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. After giving such notice, the Trustee shall not
register the transfer of or exchange any Certificates. If such notice is given
in connection with Vanderbilt's or the Servicer's election to purchase,
Vanderbilt or the Servicer shall deposit in the Certificate Account on the
Business Day prior to the applicable Remittance Date the amount described in
Section 11.01(a)(ii). Upon presentation and surrender of the Class A
Certificates, Class M-1 Certificates and Class B Certificates, the Trustee
shall cause to be distributed to Certificateholders, from funds in the
Certificate Account, in proportion to such Certificateholders' respective
Percentage Interests, the following amounts (to the extent of available funds)
in the following order of priority: (i) to the Class A-1 Certificateholders,
pro rata, the Class A-1 Principal Balance plus the interest due thereon; (ii)
to the Class A-2 Certificateholders, the Class A-2 Principal Balance plus the
interest due thereon; (iii) to the Class A-3 Certificateholders, the Class A-3
Principal Balance plus the interest due thereon; (iv) to the Class A-4
Certificateholders, the Class A-4 Principal Balance plus the interest due
thereon; (v) to the Class A-5 Certificateholders, the Class A-5 Principal
Balance plus the interest due thereon; (vi) to the Class M-1
Certificateholders, the Class M-1 Principal Balance plus the interest due
thereon; (vii) to the Class B-1 Certificateholders, the Class B-1 Principal
Balance plus the interest due thereon; and (viii) to the Class B-2
Certificateholders, the Class B-2 Principal Balance plus the interest due
thereon; provided that if a Deficiency Event has occurred, the distribution
pursuant to clause (i) , (ii), (iii), (iv) and (v) shall be pro rata among
such Classes on the basis of the amounts specified in such clauses. Upon such
termination, any amounts remaining in the Certificate Account (other than
amounts retained to meet claims) shall be paid to the Holder of the Class R
Certificate. Following such final deposit, the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer. 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 the Certificates. Any amounts retained in the Certificate Account
that are owed to Certificateholders which have not surrendered their
Certificates as of the final Remittance Date shall be withdrawn from the
Certificate Account and held in an escrow account with the Trustee pending
distribution pursuant to Section 11.01(c).
(c) If all of the Certificateholders shall not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee 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 two years after the second notice all the Certificates shall not have
been surrendered for cancellation,
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the Trustee shall so notify Vanderbilt, deliver any amounts held by it to
Vanderbilt and Vanderbilt may take appropriate steps, or may appoint an agent
to take appropriate and reasonable steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of, and only to the extent of, the funds and other
assets which remain in trust hereunder.
Upon any termination pursuant to the exercise of the purchase option
contained in Section 11.01(a)(ii) or otherwise, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless
the Trustee has received an Opinion of Counsel to the effect that the failure
of the Trust Fund to comply with the requirements of this Section will not (i)
result in the imposition of taxes on "prohibited transactions" of the Trust
Fund as described in Section 860F of the Code, or (ii) cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the final Remittance Date set forth in
the notice given by the Servicer or the Trustee under this Section, the
Holder of the Class R Certificate shall adopt a plan of complete
liquidation of the Trust Fund; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Remittance Date, the Servicer
shall sell all of the assets of the Trust Fund to Vanderbilt or the
Servicer, as the case may be, for cash.
By its acceptance of the Class R Certificate, the Holder thereof hereby
agrees to adopt such a plan of complete liquidation upon the written request
of the Servicer or Vanderbilt and to take such other action in connection
therewith as may be reasonably requested by Vanderbilt.
[End of Article XI]
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Article XII
MISCELLANEOUS PROVISIONS
Section 12.01. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and in no way shall affect the validity
or enforceability of the other provisions of this Agreement.
Section 12.02. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision
hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates evidencing not less than 25% of the Trust Fund shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being covenanted expressly by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement. For the protection and
enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 12.03. Acts of Certificateholders.
(a) Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver
or other action is required hereunder,
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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 conclusive in
favor of the Trustee, the Servicer and Vanderbilt 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 or the Servicer 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 12.04. [Reserved]
Section 12.05. Amendment. This Agreement may be amended from time to time
by Vanderbilt, the Servicer, and the Trustee, but without the consent of any
of the Certificateholders, (a) to cure any ambiguity, mistake or error or to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein, (b) to add to the duties or obligations of the
Servicer hereunder, (c) to obtain a rating by a nationally recognized rating
agency or to maintain or improve the rating of the Certificates then given by
a rating agency (it being understood that, after obtaining the rating of any
Certificates at the Closing Date, none of the Trustee, Vanderbilt or the
Servicer is obligated to obtain, maintain or improve any rating of the
Certificates), (d) to facilitate the operation of a guarantee of the Class B-2
Certificates by any Person (it being understood that the creation of any such
guarantee is solely at the option of Vanderbilt and that such guarantee will
not benefit in any way or result in any payments on any other Class of
Certificates) or (e) to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, including without
limitation provisions relating to the issuance of definitive Certificates to
Certificate Owners provided that book-entry registration of the Certificates
is no longer permitted; provided, however, that such action shall not, as
evidenced
105
by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder (including, without limitation, the
maintenance of the status of the Trust Fund as a REMIC under the Code).
This Agreement may also be amended from time to time by Vanderbilt, the
Servicer and the Trustee, without consent of the Certificateholders, to
modify, eliminate or add to the provisions of this Agreement to such extent as
shall be necessary to (i) maintain the qualification of the Trust Fund as a
REMIC under the Code or avoid, or minimize the risk of, the imposition of any
tax on the Trust Fund under the Code that would be a claim against the Trust
Fund's assets, provided that there shall have been delivered an Opinion of
Counsel addressed to the Trustee to the effect that (a) such action is
necessary or appropriate to maintain such qualification or avoid any such tax
or minimize the risk of its imposition, and (b) such amendment shall not
adversely affect in any material respect the interests of any
Certificateholder or (ii) prevent the Trust Fund from entering into any
"prohibited transaction" as defined in Section 860F of the Code provided that
there shall have been delivered an Opinion of Counsel addressed to the Trustee
to the effect that (a) such action is necessary or appropriate to prevent the
Trust Fund from entering into such prohibited transaction, and (b) such
amendment shall not adversely affect in any material respect the interests of
any Certificateholder.
This Agreement also may be amended from time to time by Vanderbilt, the
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing not less than 51% of the Trust Fund, 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 Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, distributions which are
required to be made on any Certificate without the consent of the Holder of
such Certificate; (ii) reduce the aforesaid percentage of Certificates, the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then outstanding or (iii)
adversely affect the status of the Trust Fund as a REMIC or cause a tax to be
imposed on the Trust Fund under the REMIC Provisions.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders under
this Section 12.05 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 regulations as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Officer's Certificate and
Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and that all conditions precedent to such
execution and delivery have been satisfied. 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.
106
Section 12.06. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the properties subject to the
Contracts are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer at the
Servicer's expense accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders or is necessary for the administration or servicing of the
Contracts.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 12.07. Contribution of Assets. Except as provided in Section
3.05(b) and so much of Section 3.05(a) as does not relate to a deposit in lieu
of repurchase of a Contract the principal balance of which is incorrectly set
forth on the Contract Schedule, following the Closing Date, the Trustee shall
not accept any contribution of additional assets to the Trust Fund unless
Vanderbilt has delivered an Opinion of Counsel addressed to the Trustee to the
effect that (i) the contribution of such assets into the Trust Fund will not
cause the Trust Fund to fail to qualify as a REMIC so long as any Certificate
is outstanding and (ii) such contribution will not cause the imposition of tax
on contributions to the Trust Fund after the "start-up day" (as defined in
Section 860G of the Code) with respect thereto.
Section 12.08. Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 12.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 12.10. Notices. All demands, notices and communications hereunder
shall be in writing and (a) shall be deemed to have been duly given if
personally delivered at, or telecopied (with transmission confirmed by
telephone) to, or (b) shall be deemed to have been given when received if sent
by overnight courier to or mailed by first class or registered mail, postage
prepaid, to (i) in the case of Vanderbilt, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: President; (ii) in the case of the Trustee, JPMorgan Chase
Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Structured Finance Surveillance Group (MBS); (iii) in the case of Moody's, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Backed Securities
Unit; or (iv) in the case of S&P, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Mortgage-Backed Securities Group.
Section 12.11. Merger and Integration of Documents. 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.
107
Section 12.12. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 12.13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
[End of Article XII]
108
IN WITNESS WHEREOF, Vanderbilt, as Seller and Servicer, ▇▇▇▇▇▇▇ and the
Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
VANDERBILT MORTGAGE AND FINANCE,INC., as
Seller and Servicer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Secretary
JPMORGAN CHASE BANK,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ HOMES, INC., as Provider
of the Limited Guarantee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
STATE OF TENNESSEE )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 23rd day of August, 2002, before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be the Secretary
of Vanderbilt Mortgage and Finance, Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF TENNESSEE )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 23rd day of August, 2002 before me, a notary public in and for
said State, personally appeared ▇▇▇▇ ▇▇▇▇▇, known to me to be the Senior Vice
President of ▇▇▇▇▇▇▇ Homes, Inc., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of August, 2002 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me to be a
Vice President of JPMorgan Chase Bank, a New York banking corporation that
executed the within instrument, and also known to be the person who executed
it on behalf of said banking corporation and acknowledged to me that such
banking corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
CONTRACT SCHEDULE
(On file with the Trustee and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ llp)
A1-1
EXHIBIT A-2
FORM OF CUSTODIAL AGREEMENT
Dated as of August 23, 2002
JPMORGAN CHASE BANK, a New York banking corporation, as trustee (the
"Trustee"), SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking
association, or its successors in interest (the "Custodian" or "SouthTrust"),
and VANDERBILT MORTGAGE AND FINANCE, INC., a Tennessee corporation, or its
successors in interest, individually and as Servicer (individually,
"Vanderbilt" or, in its capacity as servicer, the "Servicer"), agree as
follows:
WHEREAS, the Trustee, Vanderbilt and ▇▇▇▇▇▇▇ Homes, Inc. have entered
into a Pooling and Servicing Agreement, dated as of July 25, 2002 (the
"Pooling Agreement"; terms used but not defined herein shall have the meanings
assigned to them in Section 1.01 of the Pooling Agreement attached hereto at
Appendix A) relating to the Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 2002-B (the "Certificates");
WHEREAS, pursuant to Section 2.04 and 5.20 of the Pooling Agreement,
Vanderbilt shall deliver each Delivered Land-and-Home Contract File and each
Delivered Mortgage Loan File, if any, to the Trustee or a custodian on its
behalf and the Trustee may appoint a custodian with respect to such Delivered
Land-and-Home Contract Files and the Delivered Mortgage Loan Files, if any
(collectively, the "Files");
WHEREAS, the Trustee wishes to appoint SouthTrust as custodian with
respect to the Files; and
WHEREAS, SouthTrust is willing to act as custodian of the Files and
perform its services in accordance with the terms and conditions hereof;
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Trustee, the Custodian and Vanderbilt agree as follows:
1. Appointment as the Custodian. Subject to the terms and conditions
herein, the Trustee hereby appoints the Custodian, and the Custodian hereby
accepts such appointment, to maintain custody of the Files relating to the
Land-and-Home Contracts and Mortgage Loans, if any, listed on Schedule I
hereto (the "Schedule"). The Custodian shall have no duties or obligations
except those expressly stated in this Agreement, and such duties or
obligations shall be determined solely by the express provisions of this
Agreement.
2. Charges and Expenses. The Custodian will charge for its services under
this Agreement as set forth in a separate agreement between the Custodian and
Vanderbilt, the payment of which shall be the obligation of Vanderbilt. The
Trustee shall not be responsible for the fees or expenses of the Custodian.
A2-1
3. Initial Delivery of Files. Within 30 days of the applicable Transfer
Date, the Servicer shall deliver the following items to the Custodian:
(1) with respect to each Land-and-Home Contract,
(a) the original of the Land-and-Home Contract, and, in the case of
each Bi-weekly Contract, the original of the bi-weekly rider for such
Contract, and, in the case of each Equity Builder Contract, the original
of the graduated payment rider for such Contract;
(b) the original related Mortgage with evidence of recording thereon
and any title document for the related Manufactured Home;
(c) with respect to any Land-and-Home Contract not originated by
Vanderbilt, the assignment of the Land-and-Home Contract from the
originator to Vanderbilt with evidence of recording thereon;
(d) with respect to any Land-and-Home Contract originated by
Vanderbilt, an endorsement of such Land-and-Home Contract by Vanderbilt
without recourse;
(e) with respect to the Land-and-Home Contracts located in the ten
states with the highest concentration of Land-and-Home Contracts (listed
on Exhibit D hereto), an Opinion of Counsel to the effect that Vanderbilt
need not cause to be recorded any assignment which relates to
Land-and-Home Contracts in such states to protect the Trustee's and the
Certificateholders' interest in such Land-and-Home Contracts; provided,
however, if Vanderbilt fails to deliver such an Opinion of Counsel for
any of the states listed on Exhibit D, with respect to the Land-and-Home
Contracts located in those states, Vanderbilt shall provide an original
executed assignment of the Mortgage, with evidence of recording thereon,
showing the assignment from Vanderbilt to the Trustee or to the separate
trustee, as applicable; and
(f) any extension, waiver or modification agreement(s) for each
Land-and-Home Contract on the Schedule; and
(2) with respect to each Mortgage Loan, if any,
(a) the original related Mortgage, with evidence of recording
indicated thereon, and the original related mortgage note, if any;
(b) the original assignment and any intervening assignments of the
Mortgage, with evidence of recording thereon, showing a complete chain of
assignment of the Mortgage Loan from origination of the Mortgage Loan to
Vanderbilt;
(c) an original assignment, with evidence of recording thereon,
showing the assignment from Vanderbilt to the Trustee or to the separate
trustee, as applicable; and
(d) any extension, modification or waiver agreement(s) for each
Mortgage Loan on the Schedule.
A2-2
In lieu of the items to be recorded and delivered pursuant to Sections
3(1)(b), 3(1)(c), 3(1)(e), 3(2)(a), 3(2)(b) and 3(2)(c) above (the "Recorded
Documents"), if the original Mortgage or assignment has not been returned by
the applicable recording office or is not otherwise available, Vanderbilt
shall provide the Custodian with a copy thereof together with an Officer's
Certificate (which may be a blanket Officer's Certificate of Vanderbilt
covering all such Mortgages and assignments) certifying that the copy is a
true and correct copy of the original Mortgage or original assignment, as
applicable, submitted for recording, which will be (1) replaced by the
original Mortgage or original assignment when it is so returned or (2) if the
recording office in the applicable jurisdiction retains the original Mortgage
or original assignment or the original Mortgage or original assignment has
been lost, a copy of such item certified by the applicable recording office.
All of the items with respect to a Land-and-Home Contract which are
delivered to and held by the Custodian are referred to herein as the
"Delivered Land-and-Home Contract File." All of the items with respect to a
Mortgage Loan which are delivered to and held by the Custodian are referred to
herein as the "Delivered Mortgage Loan File."
Such delivery shall be accompanied by a Certificate of Delivery (the
"Certificate of Delivery") of Vanderbilt substantially in the form of Exhibit
A hereto.
4. Subsequent Delivery of Documents. Vanderbilt shall deliver each
Recorded Document (or if the recording office in the applicable jurisdiction
retains the original Mortgage or original assignment or the original Mortgage
or original assignment has been lost, a copy of such item certified by the
applicable recording office) to the Custodian no later than the earlier of (1)
five Business Days after receipt thereof and (ii) within 180 days of the
Transfer Date. In addition, within that same time period, Vanderbilt shall
deliver to the Custodian any other original documents constituting a part of
the Files.
5. Maintenance of Office. The Custodian agrees to maintain the Delivered
Land-and-Home Contract Files for each Land-and-Home Contract and the Delivered
Mortgage Loan Files for each Mortgage Loan, if any, identified in the Schedule
at the office of the Custodian located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ or at such other offices of the Custodian in the State of Alabama as
the Custodian shall designate from time to time after giving the Servicer and
the Trustee at least 10 days' prior written notice.
6. Standard of Care and Limitation on Liability of the Custodian. The
Custodian shall not be subject to liability for any loss with respect to the
Files; provided, however, that the Custodian shall use its best judgment and
perform its duties under this Agreement in good faith and in accordance with
customary standards for such custody; and provided, however, that the
provisions of this paragraph shall not be construed to relieve the Custodian
from liability from its own gross negligence, or its own willful misconduct or
any breach by the Custodian of any of its obligations hereunder.
7. Duties of the Custodian. The Custodian shall have the following rights
and obligations and shall perform the following duties with respect to the
Files in its possession:
A2-3
(a) Safekeeping. To segregate the Files from all other mortgages and
mortgage notes and similar records in its possession, to maintain the Files in
secure, fireproof facilities, to identify the Files as being held and to hold
the Files for and on behalf of the Trustee for the benefit of all present and
future Certificateholders, and to conduct periodic physical inspections of the
Files held by it under this Agreement in such a manner as shall enable the
Custodian to verify the physical possession thereof. The Custodian will
promptly report to the Servicer and the Trustee any failure on its part to
hold the Files as herein provided and promptly take appropriate action to
remedy any such failure.
(b) Certification as to File Contents.
(i) Within 45 days after the Custodian has received from (or on
behalf of) the Servicer actual possession of each File, the Custodian
shall (a) verify that, with respect to each File, all documents listed on
the Certificate of Delivery have been executed, received and recorded, if
applicable, except as noted on the list of exceptions attached thereto,
and (b) deliver to the Servicer and the Trustee an Initial Certificate of
Receipt, substantially in the form of Exhibit B-1 attached hereto, which
ascertains that all required documents have been executed, received and
recorded, if applicable. After the delivery of the Initial Certificate of
Receipt, the Custodian shall provide to Vanderbilt and the Trustee, no
less frequently than quarterly, updated certifications, in the form of
Exhibit B-2, indicating the current status of exceptions until all such
exceptions have been eliminated.
(ii) In making such a review, the Custodian makes no representation
and has no responsibilities as to the authenticity of such documents or
their compliance with applicable law, including but not limited to their
compliance with the requirements for recordation, the correctness of the
legal description contained in any document or the collectibility of any
of the loan amounts from any borrower. In making such verification, the
Custodian may rely conclusively on the Schedule attached hereto and the
Certificate of Delivery, and the Custodian shall have no obligation to
independently verify the correctness of the Schedule or the Certificate
of Delivery.
(iii) If (a) any discrepancy exists between the Files in the
possession of the Custodian and the Schedule or (b) any document or
documents constituting a part of a File (the contents of which are
indicated in the Certificate of Delivery) has been omitted or is
defective in any material respect, the Custodian shall promptly notify
the Servicer and the Trustee and deliver an exceptions report (the
"Exceptions Report") as promptly as possible but in any event within 45
days of the date of receipt of the Files. Except as specifically provided
above, the Custodian shall be under no duty to review, inspect or examine
such documents to determine that any of them are enforceable or
appropriate for their prescribed purpose.
(c) Administration; Reports. The Custodian shall, at the expense of the
Servicer and any subservicer, assist the Servicer and any subservicer (as may
be reasonably requested in writing) generally in the preparation of reports to
Certificateholders or to regulatory bodies to the extent necessitated by the
Custodian's custody of the Files.
A2-4
(d) Release of Documents. Upon receipt of a Request for Release (a
"Request for Release") (substantially in the form attached hereto as Exhibit
C), to release all or a portion of any File to the Servicer, the Trustee, or
the designee of either the Servicer or the Trustee, in accordance with the
instructions furnished by the Servicer, and to cooperate on behalf of the
Trustee in such release of Files. All documents so released to the Servicer,
the Trustee or their respective designees shall be held by such entity in
trust for the benefit of the Certificateholders. Unless such Land-and-Home
Contract or Mortgage Loan has been liquidated, the Servicer, the Trustee or
their respective designees shall return to the Custodian such released
documents when such documents are no longer needed for the purpose set forth
in the Request for Release.
8. Access to Records. The Custodian shall permit the Trustee, Chase
Manhattan Bank USA, National Association (the "Separate Trustee"), the
Servicer and any subservicer appointed by the Servicer and identified by the
Trustee to the Custodian, or their duly authorized representatives, attorneys
or auditors to inspect the Files and the books and records maintained by the
Custodian at such time as the Trustee, the Separate Trustee, the Servicer or
any subservicer may reasonably request, subject only to compliance by the
Trustee, the Separate Trustee, the Servicer or any subservicer with the
security procedures of the Custodian applied by the Custodian to its own
employees having access to these and similar records.
9. Instructions; Authority to Act. The Custodian shall be deemed to have
received proper instructions with respect to the Files upon receipt of written
notice, request, consent, certificate, order, affidavit, letter, telegram or
other document reasonably believed by it to be genuine and to have been signed
or sent by the proper party or parties and may be considered as in full force
and effect until receipt of written notice to the contrary by the Custodian
from the Trustee, the Separate Trustee, the Servicer or any subservicer;
provided, however, that the provision of this paragraph shall not be construed
to relieve the Custodian, its officers, directors, employees, agents or other
representatives from liability from its own gross negligence or its own
willful misconduct.
10. Indemnification of the Custodian. Vanderbilt agrees to indemnify the
Custodian for any and all liabilities, obligations, losses, damages, payments,
costs or expenses of any kind whatsoever (including reasonable attorneys fees)
which may be imposed on, incurred or asserted against the Custodian as the
result of any act or omission in any way relating to the maintenance and
custody by the Custodian of the Files; provided, however, that Vanderbilt
shall not be liable for any portion of any such amount resulting from the
gross negligence or willful misconduct of the Custodian.
11. Indemnification of the Trustee. Vanderbilt agrees to indemnify,
defend, and hold harmless the Trustee and its officers, directors, employees
and agents for any and all liabilities, obligations, losses, damages,
payments, costs or expenses of any kind whatsoever (including reasonable
attorneys fees) which may be imposed on, incurred or asserted against the
Trustee as the result of any act or omission in any way relating to or arising
out of the maintenance and custody by the Custodian of the Files or the
performance by the Custodian, Vanderbilt or any Servicer of their respective
duties hereunder; provided, however, that Vanderbilt shall not be liable for
any portion of any such amount resulting from the gross negligence or willful
misconduct of the Trustee.
A2-5
12. Advice of Counsel. The Custodian shall be entitled to rely and act
upon written advice of counsel with respect to its performance hereunder as
custodian and shall be without liability for any action reasonably taken
pursuant to such advice, provided that such action is not in violation of
applicable Federal or State law and Vanderbilt shall reimburse the Custodian
for the reasonable attorneys' fees of the Custodian.
13. SouthTrust Not to Resign. SouthTrust shall not resign from its
obligations and duties as Custodian hereby imposed on it except (a) upon
determination that the performance of its obligations or duties hereunder are
no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it or its
subsidiaries or affiliates, the other activities of SouthTrust so causing such
a conflict being of a type and nature carried on by SouthTrust or its
subsidiaries or affiliates at the date of this Agreement or (b) upon
satisfaction of the following conditions: (i) SouthTrust has proposed a
successor custodian to the Trustee and the Servicer in writing and such
proposed successor is reasonably acceptable to the Servicer and is not an
affiliate of or under the control of Vanderbilt; and (ii) ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's") or its successor in interest and Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P") or its
successor in interest shall have delivered a letter to the Trustee prior to
the appointment of the successor stating that the proposed appointment of such
successor of SouthTrust hereunder will not result in the reduction or
withdrawal of the then current rating of the Certificates; provided, however,
that no such resignation by SouthTrust shall become effective until its
successor or, in the case of (a) above, a custodian appointed by the Trustee
and acceptable to Moody's and S&P shall have assumed SouthTrust's
responsibilities and obligations hereunder. Any such determination permitting
the resignation of SouthTrust pursuant to clause (a) above shall be evidenced
by an opinion of counsel to such effect reasonably satisfactory to the Trustee
and delivered to Vanderbilt and the Trustee concurrently with the delivery of
any notice of resignation.
14. Effective Period, Termination and Amendment. This Agreement shall
become effective as of the date hereof and shall continue in full force and
effect until terminated as hereinafter provided, and may be amended at any
time by mutual agreement of the parties hereto. This Agreement may be
terminated by the Trustee with or without cause in a writing delivered or
mailed, postage prepaid, to the other parties, such termination to take effect
no sooner than sixty (60) days after the date of such delivery or mailing.
Concurrently with, or as soon as practicable after, the termination of this
Agreement, the Custodian shall redeliver the Files to a person designated by
the Trustee at such place as the Trustee or the person designated by the
Trustee may reasonably designate.
15. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
16. Notices. All demands, notices and communications hereunder shall be
in writing and shall be delivered or mailed, postage prepaid, to the Trustee
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention:
Structured Finance Services (MBS); to the Custodian at ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Document Custody; to
the Servicer or Vanderbilt at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
President; or to such other address as the Trustee, the Custodian, the
Servicer or
A2-6
Vanderbilt may hereafter specify in writing. Notices or other writings shall
be effective only upon actual receipt by the parties.
17. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the Trustee, the Custodian, Vanderbilt, in its individual
capacity, the Servicer and their respective successors and assigns.
Concurrently with the appointment of a successor trustee as provided in the
Pooling Agreement, the parties hereto shall amend this Agreement to make said
successor trustee the successor to the Trustee hereunder.
18. Counterparts. This Agreement may be signed in any number of
counterparts each of which will be deemed an original, which taken together
shall constitute one and the same instrument.
19. Obligations of the Trustee. Nothing in this Agreement shall be deemed
to release the Trustee from any of its obligations under the Pooling
Agreement. The Trustee shall not be responsible for any willful misconduct or
negligence on the part of the Custodian and shall be afforded the same rights,
protections and immunities set forth in the Pooling Agreement with respect to
the Trustee's responsibilities under this Agreement.
20. Definitions. Terms capitalized herein and not defined herein shall
have their respective meanings as set forth in the Pooling Agreement.
A2-7
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by a duly authorized officer as
of the day and year first above written.
JPMORGAN CHASE BANK,
as Trustee
By: ____________________________
Name:
Title:
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
as Custodian
By: _____________________________
Name:
Title:
VANDERBILT MORTGAGE AND
FINANCE, INC.
individually and as Servicer
By: _____________________________
Name:
Title:
▇▇-▇
▇▇▇▇▇▇▇▇ ▇
(▇▇▇▇▇▇ ▇▇▇▇-▇ ▇▇▇▇▇▇▇ and Servicing Agreement)
A2-9
SCHEDULE I
(Schedule of Land-and-Home Contracts and Mortgage Loans)
A2-10
EXHIBIT A
CERTIFICATE OF DELIVERY
The undersigned hereby certifies that the documents listed below, except
as noted on the list of exceptions attached hereto, are included in the
Delivered Land-and-Home Contract Files and the Delivered Mortgage Loan Files,
if any, delivered to the Custodian pursuant to the terms of the Custodial
Agreement, dated as of August 23, 2002 (the "Custodial Agreement"), among
JPMorgan Chase Bank, as trustee (the "Trustee"), SouthTrust Bank, National
Association, as custodian (the "Custodian") and Vanderbilt Mortgage and
Finance, Inc. ("Vanderbilt") for each contract on the Schedule:
(1) with respect to each Land-and-Home Contract,
(a) the original of the Land-and-Home Contract, and, in the case of each
Bi-weekly Contract, the original of the bi-weekly rider for such Contract,
and, in the case of each Equity Builder Contract, the original of the
graduated payment rider for such Contract;
(b) the original related Mortgage with evidence of recording thereon and
any title document for the related Manufactured Home;
(c) with respect to any Land-and-Home Contract not originated by
Vanderbilt, the assignment of the Land-and-Home Contract from the originator
to Vanderbilt with evidence of recording thereon;
(d) with respect to any Land-and-Home Contract originated by Vanderbilt,
an endorsement of such Land-and-Home Contract by Vanderbilt without recourse;
(e) with respect to the Land-and-Home Contracts located in the ten states
listed on Exhibit D to the Custodial Agreement, the Opinion of Counsel
specified in Section 3(1)(e) of the Custodial Agreement; provided, however, if
Vanderbilt failed to deliver such an Opinion of Counsel for any of the states
listed on Exhibit D to the Custodial Agreement, with respect to the
Land-and-Home Contracts located in those states, the original executed
assignment of the Mortgage, with evidence of recording thereon, showing the
assignment from Vanderbilt to the Trustee or to the separate trustee, as
applicable; and
(f) any extension, waiver or modification agreement(s) for each
Land-and-Home Contract on the Schedule.
(2) with respect to each Mortgage Loan, if any,
(a) the original related Mortgage, with evidence of recording indicated
thereon or the original related mortgage note, if any;
(b) the original assignment and any intervening assignments of the
Mortgage, with evidence of recording thereon, showing a complete chain of
assignment of the Mortgage Loan from origination of the Mortgage Loan to
Vanderbilt;
A2-11
(c) the original assignment, with evidence of recording thereon, showing
the assignment from Vanderbilt to the Trustee or to the separate trustee, as
applicable; and
(d) any extension, modification or waiver agreement(s) for each Mortgage
Loan on the Schedule.
In lieu of the items to be recorded and delivered pursuant to Sections (1)(b),
(1)(c), (1)(e), (2)(a), (2)(b) and (2)(c) above (the "Recorded Documents"), if
the original Mortgage or assignment has not been returned by the applicable
recording office or is not otherwise available, Vanderbilt has provided the
Custodian with a copy thereof together with an Officer's Certificate (which
may be a blanket Officer's Certificate of Vanderbilt covering all such
Mortgages and assignments) certifying that the copy is a true and correct copy
of the original Mortgage or original assignment, as applicable, submitted for
recording, which will be (1) replaced by the original Mortgage or original
assignment when it is so returned or (2) if the recording office in the
applicable jurisdiction retains the original Mortgage or original assignment
or the original Mortgage or original assignment has been lost, a copy of such
item certified by the applicable recording office.
In accordance with Section 4 of the Custodial Agreement, Vanderbilt shall
deliver to the Custodian any additional items required pursuant to Custodial
Agreement within the time period specified therein.
Capitalized terms not otherwise defined herein shall have the meaning set
forth in the Custodial Agreement.
Dated: VANDERBILT MORTGAGE AND FINANCE, INC.,
as Servicer
By:__________________________________
Name:
Title:
▇▇-▇▇
▇▇▇▇▇▇▇ ▇-▇ TO THE CUSTODIAL AGREEMENT
INITIAL CERTIFICATE OF RECEIPT
JPMorgan Chase Bank,
as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Services (MBS)
Vanderbilt Mortgage and Finance, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Custodial Agreement, dated as of August 23, 2002, among
JPMorgan Chase Bank, SouthTrust Bank, National Association
and Vanderbilt Mortgage and Finance, Inc.
----------------------------------------------------------
Ladies and Gentlemen:
The undersigned hereby acknowledges receipt on this ___ day of __________
2002 of the Certificate of Delivery and the Delivered Land-and-Home Contract
Files and the Delivered Mortgage Loan Files, if any. Subject to the Custodial
Agreement, dated as of August 23, 2002, among JPMorgan Chase Bank, as trustee
(the "Trustee"), SouthTrust Bank, National Association, as custodian (the
"Custodian") and Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt" or in its
capacity as servicer, the " Servicer") (the "Custodial Agreement"), the
undersigned hereby certifies that it has reviewed each of the Files listed on
the Schedule and that it is holding, on behalf of the Trustee and for the
benefit of the Certificateholders, the following items (except as noted on the
list of exceptions attached hereto):
(1) with respect to each Land-and-Home Contract,
(a) the original of the Land-and-Home Contract, and, in the case of each
Bi-weekly Contract, the original of the bi-weekly rider for such
Contract, and, in the case of each Equity Builder Contract, the original
of the graduated payment rider for such Contract;
(b) the original related Mortgage with evidence of recording thereon and
any title document for the related Manufactured Home;
(c) with respect to any Land-and-Home Contract not originated by
Vanderbilt, the assignment of the Land-and-Home Contract from the
originator to Vanderbilt with evidence of recording thereon;
(d) with respect to any Land-and-Home Contract originated by Vanderbilt,
an endorsement of such Land-and-Home Contract by Vanderbilt without
recourse;
(e) (1) with respect to the Land-and-Home Contracts located in the ten
states with the highest concentration of Land-and-Home Contracts (listed
on Exhibit D to the
A2-13
Custodial Agreement), an Opinion of Counsel to the effect that Vanderbilt
need not cause to be recorded any assignment which relates to
Land-and-Home Contracts in such states to protect the Trustee's and the
Certificateholders' interest in such Land-and-Home Contracts; or
(2) if the above-referenced Opinion of Counsel is not delivered with
respect to any of the ten states listed on Exhibit D to the Custodial
Agreement, with respect to the Land-and-Home Contracts located in those
states, an original executed assignment of the Mortgage, with evidence of
recording thereon, showing the assignment from Vanderbilt to the Trustee
or to the Separate Trustee, as applicable; and
(f) any extension, waiver or modification agreement(s) of which the
Custodian is aware for each Land-and-Home Contract on the Schedule.
(2) with respect to each Mortgage Loan, if any,
(a) the original related Mortgage, with evidence of recording indicated
thereon, and the original related mortgage, if any;
(b) the original assignment and any intervening assignments of the
Mortgage, with evidence of recording thereon, showing a complete chain of
assignment of the Mortgage Loan from origination of the Mortgage Loan to
Vanderbilt;
(c) the original assignment, with evidence of recording thereon, showing
the assignment from Vanderbilt to the Trustee or to the Separate Trustee,
as applicable; and
(d) any extension, modification or waiver agreement(s) of which the
Custodian is aware for each Mortgage Loan on the Schedule.
In lieu of the items to be recorded and delivered pursuant to Sections
(1)(b), (1)(c), (1)(e), (2)(a), (2)(b) and (2)(c) above (the "Recorded
Documents"), if the original Mortgage or assignment has not been returned by
the applicable recording office or is not otherwise available, the Custodian
has received a copy thereof together with an Officer's Certificate certifying
that the copy is a true and correct copy of the original Mortgage or original
assignment, as applicable, submitted for recording, which will be (1) replaced
by the original Mortgage or original assignment when it is so returned or (2)
if the recording office in the applicable jurisdiction retains the original
Mortgage or original assignment or the original Mortgage or original
assignment has been lost, a copy of such item certified by the applicable
recording office.
Pursuant to Section 7(b) of the Custodial Agreement, the Custodian will
provide an updated certification to Vanderbilt and the Trustee, no less
frequently than quarterly, indicating the current status of exceptions until
all such exceptions have been eliminated.
A2-14
The undersigned agrees to hold the Files strictly in accordance with the
Custodial Agreement and shall perform its duties as explicitly set forth
thereunder, and shall have no other duties thereunder. Terms not otherwise
defined herein shall have the meaning set forth in the Custodial Agreement.
SOUTHTRUST BANK, NATIONAL ASSOCIATION
By:____________________________________
Name:
Title:
▇▇-▇▇
▇▇▇▇▇▇▇ ▇-▇ TO THE CUSTODIAL AGREEMENT
FORM OF UPDATED CERTIFICATION
JPMorgan Chase Bank,
as Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Services (MBS)
Vanderbilt Mortgage and Finance, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Custodial Agreement, dated as of August 23, 2002, among
JPMorgan Chase Bank, SouthTrust Bank, National
Association and Vanderbilt Mortgage and Finance, Inc.
-------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 7 of the above-referenced Custodial Agreement,
the undersigned, as Custodian, hereby sets forth an updated exception report
from the previous Custodian's Certificate issued [INSERT DATE].
The undersigned agrees to hold the Files strictly in accordance with the
Custodial Agreement and shall perform its duties as explicitly set forth
thereunder, and shall have no other duties thereunder. Terms not otherwise
defined herein shall have the meaning set forth in the Custodial Agreement.
SOUTHTRUST BANK, NATIONAL ASSOCIATION
By:________________________________________
Name:
Title:
A2-16
EXHIBIT C TO THE CUSTODIAL AGREEMENT
REQUEST FOR RELEASE OF DOCUMENTS
TO: SOUTHTRUST BANK, NATIONAL ASSOCIATION DATE:
------------------------------
------------------------------
------------------------------
------------------------------
FROM: ------------------------------
------------------------------
------------------------------
------------------------------
RE: Custodial Agreement, dated as of August 23, 2002 (the
"Custodial Agreement"), among JPMorgan Chase Bank, as
trustee, SouthTrust Bank, National Association, as
custodian and Vanderbilt Mortgage and Finance, Inc.,
individually and as Servicer.
-----------------------------------------------------
------------------------------------------------------------------------------
IN CONNECTION WITH THE ADMINISTRATION OF THE FILES HELD BY YOU IN CUSTODY FOR
JPMORGAN CHASE BANK AND PURSUANT TO THE CUSTODIAL AGREEMENT, THE UNDERSIGNED
REQUESTS THE RELEASE OF THE DOCUMENTS DESCRIBED BELOW FOR THE REASON
INDICATED.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
OBLIGOR'S NAME, ADDRESS AND ZIP CODE LOAN NO.
POOL ID
------------------------------------------------------------------------------
------------------------------------------------------------------------------
ORIGINAL CONTRACT AMOUNT............................ $___________
DATE OF ORIGINAL CONTRACT........................... ____________
---------------
PAID THROUGH DATE................................... ____________
------------------------------------------------------- ----------------------
REASON FOR REQUESTING DOCUMENTS AMOUNT SETTLEMENT DATE
[ ] CONTRACT PAID IN FULL $________ ____________________
[ ] FORECLOSURE $________ ____________________
[ ] EXHIBITS ATTACHED FOR SUBSTITUTION $________ ____________________
[ ] OTHER (explain) ___________________ $________ ____________________
WE CERTIFY THAT ALL AMOUNTS RECEIVED OR TO BE RECEIVED IN CONNECTION WITH SUCH
PAYMENT WHICH ARE REQUIRED TO BE CREDITED TO THE PROTECTED ACCOUNT OR
DEPOSITED TO THE CERTIFICATE ACCOUNT HAVE
A2-17
BEEN OR, WITHIN TWO BUSINESS DAYS, RECEIPT OF SUCH PAYMENT WILL BE CREDITED OR
DEPOSITED.
---------------------------------------- ---------------------------------
SIGNATURE DATE
------------------------------------------------------------------------------
PARTICIPANT AUTHORIZED SIGNATURE
------------------------------------------------------------------------------
[CUSTODIAN'S] RELEASE AUTHORIZATION
---------------------------- ------------------------------ ---------------
NAME AND TITLE SIGNATURE DATE
------------------------------------------------------------------------------
TO CUSTODIAN: PLEASE ACKNOWLEDGE BELOW BY YOUR SIGNATURE THE EXECUTION OF THE
ABOVE REQUEST. YOU MUST RETAIN THIS FORM FOR YOUR FILES.
DOCUMENT RETURNED TO CUSTODY:
----------------------------- ----------------------
SIGNATURE DATE
A2-18
EXHIBIT D TO THE CUSTODIAL AGREEMENT
LIST OF TEN STATES WITH HIGHEST CONCENTRATION
OF LAND-AND-HOME CONTRACT FILES
A2-19
EXHIBIT B-1
FORM OF FACE OF CLASS [A-1F][A-1V][A-2][A-3]
[A-4][A-5] 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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
[FOR CLASS A-5 ONLY: THIS CERTIFICATE IS
SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1
CERTIFICATES, CLASS A-2 CERTIFICATES, CLASS A-3
CERTIFICATES AND CLASS A-4 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.]
Number___________
Date of Pooling and Original Denomination
Servicing Agreement and $__________________
Cut-off Date:
July 25, 2002 Original Class [A-1-F][A-1V[A-2]
[A-3][A-4][A-5]
Principal Balance:
Class [A-1F][A-1V][A-2][A-3] $[__________]
[A-4][A-5] $[__________]
Remittance Rate: As specified $[__________]
in the Pooling and Servicing $[__________]
Agreement referred to herein $[__________]
$[__________]
B1-1
Remittance Date after
Latest Due Date: ____ __, ____
First Remittance Date: CUSIP _______________
September 9, 2002
B1-2
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
SERIES 2002-B, CLASS [A-1F][A-1V][A-2][A-3][A-4][A-5]
[(SENIOR)][(SUBORDINATE)]
evidencing a percentage interest in any distributions
allocable to the Class [A-1F] [A-1V] [A-2] [A-3] [A-4]
[A-5] Certificates with respect to a pool of fixed and
adjustable rate conventional manufactured housing
contracts formed and sold by
VANDERBILT MORTGAGE AND FINANCE, INC.
which manufactured housing contracts either were originated or acquired by
Vanderbilt Mortgage and Finance, Inc. (hereinafter called the "Company," which
term includes any successor entity under the Agreement referred to below) and
are initially serviced by Vanderbilt Mortgage and Finance, Inc. (in such
capacity, the "Servicer", which term includes any entity under the Agreement
referred to below).
This Certificate does not represent an obligation of or interest in
Vanderbilt, the Servicer or the Trustee referred to below or any of their
Affiliates. Neither this Certificate nor the underlying manufactured housing
contracts are guaranteed or insured by Vanderbilt Mortgage and Finance, Inc.,
the Servicer or by any governmental agency or instrumentality.
THE PORTION OF THE ORIGINAL CLASS [A-1F] [A-1V] [A-2] [A-3] [A-4] [A-5]
PRINCIPAL BALANCE EVIDENCED BY THIS CERTIFICATE ("CERTIFICATE BALANCE") WILL
BE REDUCED BY DISTRIBUTIONS ON THIS CERTIFICATE THAT ARE ALLOCABLE TO
PRINCIPAL. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
ORIGINAL DENOMINATION SHOWN ABOVE. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CURRENT CERTIFICATE BALANCE BY INQUIRY OF THE PAYING AGENT. On
the date of the initial issuance of the Certificates, the Paying Agent is the
Trustee.
This certifies that CEDE & CO. is the registered owner of an undivided
interest in certain monthly distributions with respect to a pool (the
"Contract Pool") of conventional manufactured housing installment sales
contracts, installment loan agreements and mortgage loans (collectively, the
"Contracts") formed and sold by Vanderbilt and certain other property
(collectively, the "Trust Fund"). The Contracts either were originated or
acquired by and are serviced by the Servicer and are secured by Manufactured
Homes or Mortgage Properties, as applicable. The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement"), by and among Vanderbilt, as seller and servicer, ▇▇▇▇▇▇▇ Homes,
Inc., as provider of the Limited Guarantee and JPMorgan Chase Bank, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement.
B1-3
This Certificate is one of a duly authorized issue of Certificates,
designated as Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2002-B (the "Certificates"), and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
On each Remittance Date, the Trustee will cause to be distributed from
funds in the Certificate Account to each Class [A-1F] [A-1V] [A-2] [A-3] [A-4]
[A-5] Certificateholder an amount equal to the product of the Percentage
Interest evidenced by such Class [A-1F] [A-1V] [A-2] [A-3] [A-4] [A-5]
Certificateholder's Certificate and the Class [A-1F] [A-1V] [A-2] [A-3] [A-4]
[A-5] Distribution Amount.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class [A-1F]
[A-1V] [A-2] [A-3] [A-4] [A-5] Certificates with original denominations
aggregating at least $5 million who have given the Trustee written
instructions at least five Business Days prior to the related Record Date.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose and specified in such notice
of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless this Certificate has been countersigned by or on behalf of the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
B1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
JPMORGAN CHASE BANK,
as Trustee
By____________________________________
Authorized Officer
[Form of Certificate of
Countersignature]
This is one of the Certificates
referred to in the within-
mentioned Agreement.
By___________________________________ By__________________________________,
OR
Authenticating Agent Trustee
------------------------------------- ------------------------------------
Authorized Signatory Authorized Signatory
[Signature page to Class [A-1F] [A-1V] [A-2] [A-3] [A-4] [A-5] Certificate,
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 2002-B]
B1-5
EXHIBIT B-2
FORM OF FACE OF CLASS M-1 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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF
PAYMENT TO THE CLASS A CERTIFICATES AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Number___________
Date of Pooling and Original Denomination
Servicing Agreement and $__________________
Cut-off Date:
July 25, 2002
Original Class M-1
Principal Balance:
Class M-1 $[__________]
Remittance Rate: As specified
in the Pooling and Servicing
Agreement referred to herein
Remittance Date after
Latest Due Date: ____ __, ____
First Remittance Date: CUSIP _______________
September 9, 2002
B2-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
SERIES 2002-B, CLASS M-1
(SUBORDINATE)
evidencing a percentage interest in any distributions allocable
to the Class M-1 Certificates with respect to a pool of fixed
and adjustable rate conventional manufactured housing contracts
formed and sold by
VANDERBILT MORTGAGE AND FINANCE, INC.
which manufactured housing contracts either were originated or acquired by
Vanderbilt Mortgage and Finance, Inc. (hereinafter called the "Company," which
term includes any successor entity under the Agreement referred to below) and
are initially serviced by Vanderbilt Mortgage and Finance, Inc. (in such
capacity, the "Servicer", which term includes any entity under the Agreement
referred to below).
This Certificate does not represent an obligation of or interest in
Vanderbilt, the Servicer or the Trustee referred to below or any of their
Affiliates. Neither this Certificate nor the underlying manufactured housing
contracts are guaranteed or insured by Vanderbilt Mortgage and Finance, Inc.,
the Servicer or by any governmental agency or instrumentality.
THE PORTION OF THE ORIGINAL CLASS M-1 PRINCIPAL BALANCE EVIDENCED BY THIS
CERTIFICATE ("CERTIFICATE BALANCE") WILL BE REDUCED BY DISTRIBUTIONS ON THIS
CERTIFICATE THAT ARE ALLOCABLE TO PRINCIPAL. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN ABOVE.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE
BALANCE BY INQUIRY OF THE PAYING AGENT. On the date of the initial issuance of
the Certificates, the Paying Agent is the Trustee.
This certifies that CEDE & CO. is the registered owner of an undivided
interest in certain monthly distributions with respect to a pool (the
"Contract Pool") of conventional manufactured housing installment sales
contracts, installment loan agreements and mortgage loans (collectively, the
"Contracts") formed and sold by Vanderbilt and certain other property
(collectively, the "Trust Fund"). The Contracts either were originated or
acquired by and are serviced by the Servicer and are secured by Manufactured
Homes. The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement"), by and among Vanderbilt,
as seller and servicer, ▇▇▇▇▇▇▇ Homes, Inc., as provider of the Limited
Guarantee and JPMorgan Chase Bank, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2002-B
B2-2
(the "Certificates"), and is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
On each Remittance Date, the Trustee will cause to be distributed from
funds in the Certificate Account to each Class M-1 Certificateholder an amount
equal to the product of (i) the Percentage Interest evidenced by such Class
M-1 Certificateholder's Certificate and (ii) subject to the prior rights of
Holders of Class A Certificates as specified in the Agreement, the Class M-1
Distribution Amount.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class M-1
Certificates with original denominations aggregating at least $5 million who
have given the Trustee written instructions at least five Business Days prior
to the related Record Date. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose
and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless this Certificate has been countersigned by or on behalf of the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK,
as Trustee
By____________________________________
Authorized Officer
[Form of Certificate of
Countersignature]
This is one of the Certificates
referred to in the within-
mentioned Agreement.
By___________________________________ By__________________________________,
OR
Authenticating Agent Trustee
B2-3
------------------------------------- ------------------------------------
Authorized Signatory Authorized Signatory
[Signature page to Class M-1 Certificate, Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 2002-B]
B2-4
EXHIBIT C
FORM OF FACE OF CLASS [B-1][B-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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
[FOR CLASS B-1 CERTIFICATES ONLY] THIS CERTIFICATE
IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
AND CLASS M-1 CERTIFICATES AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
[FOR CLASS B-2 CERTIFICATES ONLY] THIS CERTIFICATE
IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, CLASS M-1 CERTIFICATES AND CLASS B-1
CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
[FOR CLASS B-2 CERTIFICATES ONLY: TO THE LIMITED
EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT THIS CERTIFICATE IS ENTITLED TO THE
BENEFITS OF THE LIMITED GUARANTEE OF ▇▇▇▇▇▇▇
HOMES, INC. AS SET FORTH IN SECTION 6.05 THEREOF.]
C-1
Number___________
Date of Pooling and Original Denomination
Servicing Agreement and $__________________
Cut-off Date:
July 25, 2002
Original Class [B-1][B-2]
Principal Balance:
Class [B-1][B-2]
Remittance Rate: As specified $[__________] $[__________]
in the Pooling and Servicing
Agreement referred to herein
Remittance Date after
Latest Due Date: ____ __, ____
First Remittance Date: CUSIP _______________
September 9, 2002
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
Series 2002-B CLASS [B-1][B-2] (SUBORDINATE)
evidencing a percentage interest in any distributions allocable
to the Class [B-1][B-2] Certificates with respect to a pool of
fixed and adjustable rate conventional manufactured housing
contracts formed and sold by
VANDERBILT MORTGAGE AND FINANCE, INC.
which manufactured housing contracts either were originated or acquired by
Vanderbilt Mortgage and Finance, Inc. (hereinafter called the "Company," which
term includes any successor entity under the Agreement referred to below) and
are initially serviced by Vanderbilt Mortgage and Finance, Inc. (in such
capacity, the "Servicer", which term includes any entity under the Agreement
referred to below).
Except as set forth in the Pooling and Servicing Agreement, this
Certificate does not represent an obligation of or interest in Vanderbilt, the
Servicer or the Trustee referred to below or any of their Affiliates. Neither
this Certificate nor the underlying manufactured housing contracts are
guaranteed or insured by Vanderbilt Mortgage and Finance, Inc., the Servicer
or by any governmental agency or instrumentality.
THE PORTION OF THE ORIGINAL CLASS [B-1][B-2] PRINCIPAL BALANCE EVIDENCED
BY THIS CERTIFICATE ("CERTIFICATE BALANCE") WILL BE REDUCED BY DISTRIBUTIONS
ON THIS CERTIFICATE THAT ARE ALLOCABLE TO PRINCIPAL. ACCORDINGLY, FOLLOWING
THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN ABOVE.
ANYONE ACQUIRING THIS
C-2
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE BALANCE BY INQUIRY OF THE
PAYING AGENT. On the date of the initial issuance of the Certificates, the
Paying Agent is the Trustee.
This certifies that CEDE & CO. is the registered owner of an undivided
interest in certain monthly distributions with respect to a pool (the
"Contract Pool") of conventional manufactured housing installment sales
contracts, installment loan agreements and mortgage loans (collectively, the
"Contracts") formed and sold by Vanderbilt and certain other property
(collectively, the "Trust Fund"). The Contracts either were originated or
acquired by and are serviced by the Servicer and are secured by Manufactured
Homes. The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement"), by and among Vanderbilt,
as seller and servicer, ▇▇▇▇▇▇▇ Homes, Inc., as provider of the Limited
Guarantee, and JPMorgan Chase Bank, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2002-B (the "Certificates"), and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
On each Remittance Date, the Trustee will cause to be distributed to each
Class [B-1] [B-2] Certificateholder an amount equal to the product of (i) the
Percentage Interest evidenced by such Class [B-1][B-2] Certificateholder's
Certificate and (ii) subject to the prior rights of Holders of Class A, Class
M-1 [and Class B-1] Certificates as specified in the Agreement, the Class
[B-1][B-2] Distribution Amount.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer to Holders of Class [B-1]
[B-2] Certificates with original denominations aggregating at least $5 million
who have given the Trustee written instructions at least five Business Days
prior to the related Record Date. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Certificate at the office or agency appointed by the Trustee for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless this Certificate has been countersigned by or on behalf of the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
JPMORGAN CHASE BANK,
as Trustee
By____________________________________
Authorized Officer
[Form of Certificate of
Countersignature]
This is one of the Certificates
referred to in the within-
mentioned Agreement.
By___________________________________ By__________________________________,
OR
Authenticating Agent Trustee
------------------------------------- ------------------------------------
Authorized Signatory Authorized Signatory
[Signature page to Class [B-1][B-2]
Certificate, Manufactured Housing
Contract Senior/Subordinate
Pass-Through Certificates,
Series 2002-B]
C-4
EXHIBIT D
FORM OF FACE OF CLASS R CERTIFICATE
THIS CLASS R CERTIFICATE HAS NOT BEEN 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 OR LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE
STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 4.02 AND SECTION 4.08 OF
THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF
PAYMENT TO THE CLASS A, CLASS M-1 AND CLASS B
CERTIFICATES AS DESCRIBED IN 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.
NEITHER THIS CERTIFICATE NOR ANY BENEFICIAL
INTEREST HEREIN MAY BE, DIRECTLY OR INDIRECTLY,
TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE ASSIGNED WITHOUT THE EXPRESS WRITTEN
CONSENT OF THE SERVICER, ACTING ON BEHALF OF THE
TRUST FUND, AND ANY TRANSFER IN VIOLATION OF THIS
RESTRICTION SHALL BE ABSOLUTELY NULL AND VOID AND
SHALL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE,
AND SHALL SUBJECT THE HOLDER HEREOF TO LIABILITY
FOR ANY TAX IMPOSED (AND RELATED EXPENSES, IF ANY)
WITH RESPECT TO SUCH ATTEMPTED TRANSFER.
Number _______________ Percentage Interest: 100%
Date of Pooling and
Servicing Agreement and
Cut-off Date:
July 25, 2002
D-1
Remittance Date after
Latest Due Date: ____ __, ____
First Remittance Date:
September 9, 2002
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
Series 2002-B Class R (SUBORDINATE)
evidencing the entire percentage interest in any distributions
allocable to the Class R Certificate with respect to a pool of
fixed rate and a pool of adjustable rate conventional
manufactured housing contracts, in each case formed and sold by
VANDERBILT MORTGAGE AND FINANCE, INC.
which manufactured housing contracts either were originated or acquired by
Vanderbilt Mortgage and Finance, Inc. (hereinafter called the "Company," which
term includes any successor entity under the Agreement referred to below) and
are initially serviced by Vanderbilt Mortgage and Finance, Inc. (in such
capacity, the "Servicer", which term includes any entity under the Agreement
referred to below).
This Certificate does not represent an obligation of or interest in
Vanderbilt, the Servicer or the Trustee referred to below or any of their
Affiliates. Neither this Certificate nor the underlying manufactured housing
contracts are guaranteed or insured by Vanderbilt Mortgage and Finance, Inc.
or the Servicer or by any governmental agency or instrumentality.
This certifies that Vanderbilt SPC, Inc. is the registered owner of an
undivided interest in certain monthly distributions with respect to a pool
(the "Contract Pool") of conventional manufactured housing installment sales
contracts, installment loan agreements and mortgage loans (collectively, the
"Contracts") formed and sold by Vanderbilt and certain other property
(collectively, the "Trust Fund"). The Contracts either were originated or
acquired by and are serviced by Vanderbilt Mortgage and Finance, Inc. (the
"Servicer") and are secured by Manufactured Homes. The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement"), by and among Vanderbilt, as seller and servicer, ▇▇▇▇▇▇▇ Homes,
Inc., as provider of the Limited Guarantee, and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2002-B (the "Certificates"), and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
D-2
On each Remittance Date, the Trustee will cause to be distributed to the
Class R Certificateholder an amount equal to the Class R Distribution Amount.
Distributions on this Certificate will be made by check mailed to the
address of the Person entitled thereto, as such name and address shall appear
on the Certificate Register or by wire transfer if the Holder has given the
Trustee written instructions at least five Business Days prior to the related
Record Date. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose and
specified in such notice of final distribution.
No transfer of the Class R Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made pursuant to an
effective registration statement under said Act or laws. The Trustee or
Vanderbilt may require an Opinion of Counsel acceptable to and in form and
substance satisfactory to Vanderbilt that such transfer is exempt (describing
the applicable exemption and the basis therefor) from the registration
requirements of the Securities Act of 1933, as amended, and from any
applicable securities statute of any state, and the transferee shall execute
an investment letter in the form described by the Agreement.
Reference is hereby made to the further provisions of this Certificate
set forth hereafter, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless this Certificate has been countersigned by or on behalf of the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
JPMORGAN CHASE BANK,
as Trustee
By____________________________________
Authorized Officer
[Form of Certificate of
Countersignature]
This is one of the Certificates
referred to in the within-
mentioned Agreement.
By___________________________________ By__________________________________,
OR
Authenticating Agent Trustee
------------------------------------- ------------------------------------
Authorized Signatory Authorized Signatory
[Signature page to Class R Certificate,
Manufactured Housing Contract
Senior/Subordinate Pass-Through
Certificates, Series 2002-B]
D-4
EXHIBIT E
[FORM OF REVERSE OF CLASS A CERTIFICATES, CLASS M-1 CERTIFICATES,
CLASS B CERTIFICATES AND CLASS R CERTIFICATE]
As provided in the Agreement, deductions and withdrawals from the
Certificate Account will be made from time to time for purposes other than
distributions to Certificateholders, such purposes including payment of the
Monthly Servicing Fee, reimbursement to the Servicer for certain expenses
incurred by it, and reimbursement to the Servicer for previous advances with
respect to delinquent payments on the Contracts.
The duties and responsibilities of the Trustee are limited to those set
forth in the Agreement. The Agreement provides that the recitals contained in
the Agreement and this Certificate (other than the countersignature on the
face hereof) shall be taken as the statements of Vanderbilt or the Servicer,
as the case may be, and the Trustee assumes no responsibility for their
correctness. The Agreement also provides that the Trustee makes no
representations or warranties as to the validity or sufficiency of the
Agreement, of this Certificate (except that this Certificate has been duly and
validly countersigned by it), of any Contract or related document or the
conveyance of the Contracts and any related Mortgages or documents. The
Agreement further provides that the Trustee shall not be accountable for the
use or application by Vanderbilt of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to
Vanderbilt or the Servicer in respect of the Contracts or deposited in or
withdrawn from the Certificate Account by Vanderbilt or the Servicer.
The Trustee will cause to be kept at its Corporate Trust Office in New
York City, or at the office of its designated agent, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee maintained for such
purpose, the Trustee will, subject to the limitations set forth in the
Agreement, countersign and deliver, in the name of the designated transferee
or transferees, a Certificate dated the date of countersignature by the
Trustee.
No service charge will be made to the Holder for any registration of
transfer or exchange of this Certificate, but the Trustee may require payment
of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any registration of transfer or exchange of the
Certificate. Prior to due presentation of a Certificate for registration of
transfer, Vanderbilt, the Servicer and the Trustee may treat the Person in
whose name any Certificate is registered as the owner of such Certificate and
the Percentage Interest in the Trust Fund evidenced thereby for the purpose of
receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither Vanderbilt, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Agreement may be amended from time to time by Vanderbilt, the
Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, error or mistake or to correct
or supplement any provisions therein which may be inconsistent with any other
provisions therein, (ii) to add to the duties or obligations of the Servicer
under the
E-1
Agreement, (iii) to obtain a rating by a nationally recognized rating agency
or to maintain or improve the rating of the Certificates then given by a
rating agency (it being understood that, after obtaining the rating of any
Certificates at the Closing Date, none of the Trustee, Vanderbilt or the
Servicer is obligated to obtain, maintain or improve any rating of the
Certificates), (iv) to facilitate the operation of a guarantee of the Class
B-2 Certificates by any Person (it being understood that the creation of any
such guarantee is solely at the option of Vanderbilt and that such guarantee
will not benefit in any way or result in any payments on any other Class of
Certificates) or (v) to make any other provisions with respect to matters or
questions arising under the Agreement which are not materially inconsistent
with the provisions of the Agreement, including without limitation provisions
relating to the issuance of definitive Certificates to Certificate Owners
provided that book-entry registration of the Certificates is no longer
permitted, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder (including, without limitation, the maintenance of the
status of the Trust Fund as a REMIC under the Code). The Agreement may also be
amended from time to time by Vanderbilt, the Servicer and the Trustee, without
consent of the Certificateholders, to modify, eliminate or add to the
provisions of the Agreement to such extent as shall be necessary to maintain
the qualification of the Trust Fund as a REMIC under the Code or avoid, or
minimize the risk of, the imposition of any tax on the Trust Fund or to
prevent the Trust Fund from entering into certain prohibited transactions
under the Code, provided that such amendment shall not adversely affect in any
material respect the interests of any Certificateholder and there shall have
been delivered to the Trustee an Opinion of Counsel to the effect that such
action is necessary or appropriate for such purposes.
The Agreement may also be amended from time to time by Vanderbilt, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing not less than 51% of the Trust Fund, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment may (i) reduce in any
manner the amount of, or delay the timing of, distributions which are required
to be made on any Certificate without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentage of Certificates, the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all Certificates of such Class then outstanding or
(iii) adversely affect the status of the Trust Fund as a REMIC or cause a tax
to be imposed on the Trust Fund under the REMIC provisions.
The respective obligations and responsibilities of Vanderbilt, the
Servicer and the Trustee under the Agreement will terminate upon: (i) the
later of the final payment or other liquidation (or any advance with respect
thereto) of the last Contract or the disposition of all property acquired upon
repossession of any Contract and the remittance of all funds due thereunder;
or (ii) at the option of Vanderbilt or the Servicer, on any Remittance Date
after the first Remittance Date on which the sum of the Pool Scheduled
Principal Balances is less than 10% of the sum of the Pool Original Principal
Balances, so long as Vanderbilt or the Servicer, as the case may be, deposits
in the Certificate Accounts the repurchase price specified in the Agreement.
E-2
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE) (*This information, which is voluntary, is being requested to ensure
that the assignee will not be subject to backup withholding under Section 3406
of the Code.)
------------------
------------------
------------------------------------------------------------------------------
(Please Print or Typewrite Name and Address of Assignee)
------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
---------------------------------------------------------------- Attorney
to transfer the within Certificate on the books kept for the registration
thereof, with full power of substitution in the premises.
Dated:
------------------------------------
(Signature guaranty) NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the face
of the within Certificate in every
particular, without alteration or
enlargement or any change whatever.
E-3
EXHIBIT F
[SERVICER]
CERTIFICATE REGARDING SUBSTITUTION OF ELIGIBLE
SUBSTITUTE CONTRACT
The undersigned certify that they are [title] and [title], respectively,
of Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt"), and that as such they
are duly authorized to execute and deliver this certificate on behalf of
Vanderbilt pursuant to Section 3.05(b) of the Pooling and Servicing Agreement
(the "Agreement"), dated as of July 25, 2002, among Vanderbilt, as Seller and
Servicer, and JPMorgan Chase Bank, as Trustee (all capitalized terms used
herein without definition having the respective meanings specified in the
Agreement), and further certify that:
1. The Contracts on the attached schedule are to be substituted on the
date hereof pursuant to Section 3.05(b) of the Agreement and each such
Contract is an Eligible Substitute Contract [description, as to each Contract,
as to how it satisfies the definition of "Eligible Substitute Contract"].
2. The Contract File for each such Contract being substituted for a
Replaced Contract is in the custody of the Servicer and each such Contract has
been stamped in accordance with Section 3.02(y) of the Agreement.
3. The UCC-1 financing statement in respect of the Contracts to be
substituted, in the form required by Section 3.05(b)(ii) of the Agreement, has
been filed with the appropriate office in Tennessee.
4. There has been deposited in the appropriate 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.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day of
________, 20__.
[SERVICER]
By__________________________________
[Name]
[Title]
F-1
EXHIBIT G
[SERVICER]
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is a [title] of [Servicer], a [ ]
corporation (the "Servicer"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Servicer pursuant to
Section 7.02 of the Pooling and Servicing Agreement (the "Agreement"), dated
as of July 25, 2002, by and among Vanderbilt Mortgage and Finance, Inc., as
Seller and Servicer, ▇▇▇▇▇▇▇ Homes, Inc., as provider of the Limited
Guarantee, and JPMorgan Chase Bank, as trustee (all capitalized terms used
herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Monthly Report for the period from ____________ to
___________ attached to this certificate is complete and accurate in
accordance with the requirements of Sections 7.01 and 7.02 of the
Agreement; and
2. As of the date hereof, no Event of Default or event that with
notice or lapse of time or both would become an Event of Default has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this __ day of
_________, ____.
[SERVICER]
By______________________________
[Name]
[Title]
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ OF )
) ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ___________________ ________________,
a corporation duly organized and existing under the laws of the State of
_________, the proposed transferee (the "Transferee") of the Class R
Certificate from the Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 2002-B, issued pursuant to the Pooling and
Servicing Agreement, dated as of July 25, 2002 (the "Agreement"), by and among
Vanderbilt Mortgage and Finance, Inc., as seller and servicer, ▇▇▇▇▇▇▇ Homes,
Inc., as provider of the Limited Guarantee and JPMorgan Chase Bank, as
trustee. Capitalized terms used, but not defined herein or in Exhibit 1
hereto, shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring the Class
R Certificate for its own account.
3. The Transferee has been advised and understands that (i) a tax shall
be imposed on Transfers of the Class R Certificate to Persons that are not
Permitted Transferees; (ii) such tax is imposed on the transferor; and (iii)
the Person otherwise liable for the tax shall be relieved of liability for the
tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax shall
be imposed on a "pass-through entity" holding the Class R Certificate if at
any time during the taxable year of the pass-through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that no tax will be imposed for any period for
which the record holder furnishes to the pass-through entity an affidavit
stating that the record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a
real estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives and, except as may be provided in Treasury
Regulations, persons holding interests in pass-through entities as a nominee
for another Person.)
5. Transferee has reviewed the provisions of Section 4.08 of the
Agreement (attached hereto as Exhibit 1 and incorporated herein by reference)
and understands the legal consequences of the acquisition of the Class R
Certificate, including, without limitation, the restrictions on subsequent
Transfers and the provisions regarding voiding the Transfer and
H-1
mandatory sales. The Transferee expressly agrees to be bound by and to abide
by the provisions of Sections 4.02 and 4.08 of the Agreement. The Transferee
understands and agrees that any breach of any of the representations included
herein shall render the Transfer to the Transferee contemplated hereby null
and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer the Class R Certificate and the
Transferee will not Transfer the Class R Certificate or cause the Class R
Certificate to be Transferred to any Person that the Transferee knows is not a
Permitted Transferee.
7. The Transferee's taxpayer identification number is __________________.
8. The Purchaser (i) is not a Non-U.S. Person or (ii) is a Non-U.S.
Person that holds the Class R Certificate in connection with the conduct of a
trade or business in the United States and has furnished the transferor and
the Trustee with an effective Internal Revenue Service Form W-8EC1 or
successor form at the time and in the manner required by the Code or (iii) is
a Non-U.S. Person that has delivered to both the transferor and the Trustee an
opinion of a nationally recognized tax counsel to the effect that the transfer
of the Class R Certificate to it is in accordance with the requirements of the
Code and the regulations promulgated thereunder and that such transfer of the
Class R Certificate will not be disregarded for federal income tax purposes.
"Non-U.S. Person" means an individual, corporation, partnership or other
person which is not a U.S. Person. A "U.S. Person" means (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
treated as a corporation or partnership for United States federal income tax
purposes organized in or under the laws of the United States or any state
thereof or the District of Columbia (other than a partnership that is not
treated as a United States person under any applicable Treasury regulations)
or (iii) an estate the income of which is includible in gross income for
United States tax purposes, regardless of its source, or (iv) a trust if a
court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have
authority to control all substantial decisions of the trust. Notwithstanding
the preceding sentence, to the extent provided in regulations, certain trusts
in existence on August 20, 1996 and treated as United States persons prior to
such date that elect to continue to be treated as United States persons shall
be considered United States persons as well.
9. The Purchaser does not have the intention to impede the assessment or
collection of any federal, state or local taxes legally required to be paid
with respect to such Class R Certificate, and the Purchaser hereby
acknowledges that the Class R Certificate may generate tax liabilities in
excess of the cash flow associated with the Class R Certificate and intends to
pay such taxes associated with the Class R Certificate when they become due.
10. The Transferee has provided financial statements or other financial
information requested by the Seller of the Class R Certificates (the
"Transferor") in connection with the transfer of the Class R Certificates to
permit the Transferor to access the financial capacity of the Transferee to
pay such taxes.
12. Transferee is not a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of a U.S. taxpayer.
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13. The Transferee will not transfer the Class R Certificates, directly
or indirectly, to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
14. The Transferee will not cause income from the Class R Certificates to
be attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
H-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of __________, 200_.
[Name of transferee]
By:_________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
---------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________________, known
or proved to me to be the same person who executed the foregoing instrument
and to be the President of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ______, 2002.
----------------------------------
NOTARY PUBLIC
My commission expires the __
day of _______________, 20__.
H-4
EXHIBIT I
FORM OF INVESTMENT LETTER OF
CLASS R CERTIFICATEHOLDER
Representations of Purchaser.
----------------------------
1. The Purchaser is acquiring a Class R Certificate as principal for its
own account for the purpose of investment [neither the Underwriters nor any of
their Affiliates need represent that it is acquiring for purposes 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.
2. The Purchaser has knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of its investment in
a Class R Certificate and is able to bear the economic risk of such
investment. The Purchaser is an "accredited investor" within the meaning of
Rule 501(a) under the rules and regulations of the Securities and Exchange
Commission under the Securities Act of 1933, as amended. The Purchaser has
been given such information concerning the Class R Certificate, the underlying
Contracts and the Servicer as it has requested.
3. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale by the Purchaser of
the Class R Certificate.
4. The Purchaser understands that the Class R Certificate has not been
and will not be registered under the Securities Act of 1933, as amended, or
any state securities laws and may be resold (which resale is not currently
contemplated) only if an exemption from registration is available, that
neither Vanderbilt, the Servicer nor the Trustee is required to register the
Class R Certificate and that any transfer must comply with Sections 4.02 and
4.08 of the Pooling and Servicing Agreement. In connection with any resale of
the Class R Certificate, the Purchaser shall not make any general solicitation
or advertisement.
5. The Purchaser represents that it is not an employee benefit plan
subject to Section 406 of the Employee Retirement Income Security Act of 1974,
as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended,
or a person acting on behalf of such a plan or using the assets of such a plan
to acquire the Class R Certificate.
6. The Purchaser agrees that it will obtain from any purchaser of the
Class R Certificate from it the same representations, warranties and
agreements contained in the foregoing paragraphs 1 through 5 and in this
paragraph 6.
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7. The Purchaser hereby directs the Trustee to register the Class R
Certificate acquired by the Purchaser in the name of its nominee as follows:
_____________.
Very truly yours,
--------------------------------
NAME OF PURCHASER
By:_____________________________
Name:___________________________
Title:__________________________
I-2
EXHIBIT J
List of Sellers and Originators of Acquired Contracts
(On file with the Trustee and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP)
J-1
EXHIBIT K
FORM OF POWER OF ATTORNEY
Vanderbilt Mortgage and Finance, Inc. as Seller and Servicer (the
"Seller") under the Pooling and Servicing Agreement dated as of July 25, 2002
(the "Agreement"), between Vanderbilt Mortgage and Finance, Inc. and JPMorgan
Chase Bank, as Trustee (the "Trustee"), hereby irrevocably constitutes and
appoints the Trustee its true and lawful attorney-in-fact and agent, to
execute, acknowledge, verify, swear to, deliver, record and file, in its name,
place and stead, all instruments, documents and certificates which may from
time to time be required in connection with the Agreement, including, without
limitation, to execute any documents required to be executed or recorded by
the Trustee pursuant to Section 2.02(a) of the Agreement. If required, the
Seller shall execute and deliver to the Trustee upon request therefor, such
further designations, powers of attorney or other instruments as the Trustee
shall reasonably deem necessary for its purposes hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Agreement.
VANDERBILT MORTGAGE AND FINANCE, INC.
By:__________________________________
Name:
Title:
K-1
EXHIBIT L
FORM OF LIMITED POWER OF ATTORNEY
THIS LIMITED POWER OF ATTORNEY, dated as of this ____ day of _______,
_____, is granted, for the purposes set forth herein, to Vanderbilt Mortgage
and Finance, Inc., whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the
"Vanderbilt"), by JPMORGAN CHASE BANK, as principal (in such capacity, the
"Principal"), a bank organized and existing under the laws of the State of New
York, whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Structured Finance Services, acting in its capacity as
trustee (in such capacity, the "Trustee") under that certain Pooling and
Servicing Agreement dated as of July 25, 2002 between the Trustee and the
Attorney-in-Fact (the "Pooling and Servicing Agreement"). Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
In accordance with section 5.01 of the Pooling and Servicing Agreement,
the Trustee hereby appoints the Vanderbilt, acting by and through its officers
and employees, as attorney-in-fact for the Trustee (in such capacity, the
"Attorney-in-Fact"), with full authority and power to execute and deliver on
behalf of the Trustee, with respect to the Deeds of Trust, assignments of
mortgage or deed of trust from the Trustee to the Attorney-in-Fact for
recordation.
This Limited Power of Attorney shall not be deemed to be revoked as to
any particular deed of trust unless and until an instrument containing the
revocation is recorded in the office where the deed of trust is recorded.
IN WITNESS WHEREOF, the Principal has caused this Limited Power of
Attorney to be executed as of the date first written above.
JPMORGAN CHASE BANK,
as Trustee
By:___________________________
Name:
Title:
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF NEW YORK )
On _________ __, 2002, before me, ____________________, a Notary Public
in and for said County and State. ____________________, known to me to be the
person who executed the foregoing instrument, bearing the date of ___________,
2002, as a _______________ of JPMorgan Chase Bank, acknowledged this Limited
Power of Attorney to be the act and deed of JPMorgan Chase Bank and that she
delivered the same as such before me in my jurisdiction aforesaid.
WITNESS my hand and official seal.
-------------------------------
Notary Public
[SEAL]
My Commission Expires: ____________________
EXHIBIT M
FORM OF SUBSEQUENT TRANSFER AGREEMENT
Vanderbilt Mortgage and Finance, Inc., as seller (the "Seller") and
JPMorgan Chase Bank, as trustee (the "Trustee"), pursuant to the Pooling and
Servicing Agreement dated as of July 25, 2002 among Vanderbilt Mortgage and
Finance, Inc., ▇▇▇▇▇▇▇ Homes, Inc. and JPMorgan Chase Bank, as Trustee (the
"Pooling and Servicing Agreement"), hereby confirm their understanding with
respect to the sale by the Seller and the purchase by the Trustee of those
Contracts (the "Subsequent Contracts") listed on the attached Contract
Schedule.
Conveyance of Subsequent Contracts. As of _____________, 2002 (the
"Subsequent Cut-off Date"), the Seller does hereby irrevocably transfer,
assign, setover and otherwise convey to the Trustee, as trustee, without
recourse (except as otherwise explicitly provided for herein) all right, title
and interest in and to any and all benefits accruing from the Subsequent
Contracts (other than any principal and interest payments received thereon on
or prior to the Subsequent Cut-off Date) which are delivered to the Trustee
herewith, together with the related Subsequent Contracts and the interest in
any property which secured a Subsequent Contract, and all payments thereon and
proceeds of the conversion, voluntary or involuntary, of the foregoing; and
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any insurance policy relating to the Subsequent Contracts, cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables which at any time constitute all or
part of or are included in the proceeds of any of the foregoing). The Seller
shall deliver the original Contract or assignment with evidence of recording
thereon (except as otherwise provided by the Pooling and Servicing Agreement)
and other required documentation in accordance with the terms set forth in
Section 5.20 of the Pooling and Servicing Agreement.
The costs relating to the delivery of the documents specified in this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement shall be
borne by the Seller.
Additional terms of the sale are attached hereto as Attachment A.
The Seller hereby affirms the representations and warranties set forth in
the Pooling and Servicing Agreement that relate to the Seller and the
Subsequent Contracts as of the date hereof. The Seller hereby delivers notice
and confirms that each of the conditions set forth in Section 5.20(b) to the
Pooling and Servicing Agreement are satisfied as of the date hereof.
All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified, confirmed and incorporated herein.
M-1
Terms capitalized herein and not defined herein shall have their
respective meanings as set forth in the Pooling and Servicing Agreement.
VANDERBILT MORTGAGE AND FINANCE, INC.,
as Seller
By:____________________________________
Name:__________________________________
Title:_________________________________
JPMORGAN CHASE BANK,
as Trustee for Vanderbilt Mortgage and
Finance, Inc., Series 2001-B
By:____________________________________
Name:__________________________________
Title:_________________________________
M-2