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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 2000
CONSECO FINANCE SECURITIZATIONS CORP.
as seller of Manufactured Housing Contract
Senior/Subordinate
Pass-Through Certificates,
Series 2000-1
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(Exact name of registrant as specified in its charter)
Minnesota (333-85037/333-85037-01) 41-1807858
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(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639
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(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 293-3400
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 1. Changes in Control of Registrant.
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Not applicable.
ITEM 2. Acquisition or Disposition of Assets.
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Not applicable
ITEM 3. Bankruptcy or Receivership.
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Not applicable
ITEM 4. Changes in Registrant's Certifying Accounting.
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Not applicable
ITEM 5. Other Events.
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On February 8, 2000, the Registrant sold Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificates, Series 2000-1
evidencing beneficial ownership interests in a trust consisting of a
pool of Manufactured housing loan contracts issued by Conseco Finance
Securitizations Corp., as Seller, and Conseco Finance Corp., as
Servicer and Originator.
ITEM 6. Resignations of Registrant's Directors.
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Not applicable
ITEM 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
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(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
Exhibit No. Description
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4.1 Pooling and Servicing Agreement among Conseco
Finance Securitizations Corp., as Seller, Conseco
Finance Corp., as Originator, Servicer and
Guarantor, and U.S. Bank National Association, as
Trustee, dated as of February 1, 2000, relating
to Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates,
Series 2000-1
4.2 Transfer Agreement between Conseco Finance
Securitizations Corp., as Purchaser, and Conseco
Finance Corp., as Seller, dated as of February 1,
2000, relating to Manufactured Housing Contract
Senior/ Subordinate Pass-Through Certificates,
Series 2000-1
8.1 Tax opinion of Briggs and Morgan Professional
Association, dated February 8, 2000 relating to
REMIC matters
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREEN TREE FINANCIAL
CORPORATION
as Originator of Manufactured Housing
Contract Senior/Subordinate Pass-Through
Certificates, Series 1999-5
By: /s/ Phyllis A. Knight
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Phyllis A. Knight
Senior Vice President and Treasurer
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INDEX TO EXHIBITS
Exhibit
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Number
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4.1 Pooling and Servicing Agreement among Conseco Finance
Securitizations Corp., as Seller, Conseco Finance Corp.,
as Originator, Servicer and Guarantor, and U.S. Bank
National Association, as Trustee, dated as
of February 1, 2000, relating to Manufacturing
Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2000-1
4.2 Transfer Agreement between Conseco Finance Securitizations
Corp., as Purchaser, and Conseco Finance Corp., as Seller,
dated as of February 1, 2000, relating to Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificates,
Series 2000-1
8.1 Tax opinion of Briggs and Morgan, Professional
Association, dated February 8, 2000, relating to
REMIC matters
4
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EXHIBIT 4.1
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2000-1
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
CONSECO FINANCE CORP.
as Originator, Servicer and Guarantor
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
Dated as of February 1, 2000
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.....................................................1-1
SECTION 1.01. General....................................................1-1
SECTION 1.02. Specific Terms.............................................1-1
SECTION 1.03. Calculations..............................................1-34
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS...................2-1
SECTION 2.01. Closing....................................................2-1
SECTION 2.02. Conditions to the Closing..................................2-2
SECTION 2.03. Conveyance of the Subsequent Contracts.....................2-4
SECTION 2.04. Acceptance by Trustee......................................2-6
SECTION 2.05. REMIC Provisions...........................................2-6
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................3-1
SECTION 3.02. Representations and Warranties Regarding Each Contract.....3-2
SECTION 3.03. Additional Representations and Warranties..................3-6
SECTION 3.04. Representations and Warranties Regarding the Contracts
in the Aggregate.........................................3-7
SECTION 3.05. Representations and Warranties Regarding the Contract
Files....................................................3-9
SECTION 3.06. Repurchase of Contracts or Substitution of Contracts
for Breach of Representations and Warranties............3-10
SECTION 3.07. No Repurchase or Substitution Under Certain
Circumstances...........................................3-13
SECTION 3.08. Staged-Funding Contract Reserve Account...................3-14
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF
SECURITY INTERESTS .............................................4-1
SECTION 4.01. Custody of Contracts.......................................4-1
SECTION 4.02. Filings....................................................4-2
SECTION 4.03. Name Change or Relocation..................................4-2
SECTION 4.04. Chief Executive Office.....................................4-2
SECTION 4.05. Costs and Expenses.........................................4-3
ARTICLE V SERVICING OF CONTRACTS..........................................5-1
SECTION 5.01. Responsibility for Contract Administration.................5-1
SECTION 5.02. Standard of Care...........................................5-1
SECTION 5.03. Records....................................................5-1
SECTION 5.04. Inspection; Computer Tape..................................5-1
SECTION 5.05. Certificate Account........................................5-2
SECTION 5.06. Enforcement................................................5-4
SECTION 5.07. Trustee to Cooperate.......................................5-5
SECTION 5.08. Costs and Expenses.........................................5-6
SECTION 5.09. Maintenance of Insurance...................................5-6
SECTION 5.10. Repossession...............................................5-7
SECTION 5.11. Commingling of Funds.......................................5-8
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SECTION 5.12. Retitling; Security Interests..............................5-8
SECTION 5.13. Covenants, Representations and Warranties of Servicer......5-9
ARTICLE VI REPORTS AND TAX MATTERS.........................................6-1
SECTION 6.01. Monthly Reports............................................6-1
SECTION 6.02. Certificate of Servicing Officer...........................6-1
SECTION 6.03. Other Data.................................................6-1
SECTION 6.04. Annual Report of Accountants...............................6-1
SECTION 6.05. Statements to Certificateholders...........................6-2
SECTION 6.06. Payment of Taxes...........................................6-8
ARTICLE VII SERVICE TRANSFER................................................7-1
SECTION 7.01. Event of Termination.......................................7-1
SECTION 7.02. Transfer...................................................7-1
SECTION 7.03. Trustee to Act; Appointment of Successor...................7-2
SECTION 7.04. Notification to Certificateholders.........................7-3
SECTION 7.05. Effect of Transfer.........................................7-3
SECTION 7.06. Transfer of Certificate Account............................7-3
ARTICLE VIII PAYMENTS........................................................8-1
SECTION 8.01. Monthly Payments...........................................8-1
SECTION 8.02. Permitted Withdrawals from the Certificate Account.........8-2
SECTION 8.03. Payments...................................................8-2
SECTION 8.04. Limited Guarantee..........................................8-8
SECTION 8.05. Class C Subsidiary Certificateholder's Purchase
Option; Auction Sale; Additional Principal
Distribution Amount......................................8-9
SECTION 8.06. Capitalized Interest Account..............................8-11
SECTION 8.07. Pre-Funding Account.......................................8-12
ARTICLE IX THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY
INTERESTS.......................................................9-1
SECTION 9.01. The Certificates...........................................9-1
SECTION 9.02. Registration of Transfer and Exchange of Certificates......9-2
SECTION 9.03. No Charge; Disposition of Void Certificates................9-5
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates..........9-5
SECTION 9.05. Persons Deemed Owners......................................9-6
SECTION 9.06. Access to List of Certificateholders' Names and
Addresses................................................9-6
SECTION 9.07. Authenticating Agents......................................9-6
ARTICLE X INDEMNITIES...................................................10-1
SECTION 10.01. Company's Indemnities....................................10-1
SECTION 10.02. Liabilities to Obligors..................................10-1
SECTION 10.03. Tax Indemnification......................................10-1
SECTION 10.04. Servicer's Indemnities...................................10-2
SECTION 10.05. Operation of Indemnities.................................10-2
SECTION 10.06. REMIC Tax Matters........................................10-2
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ARTICLE XI THE TRUSTEE...................................................11-1
SECTION 11.01. Duties of Trustee........................................11-1
SECTION 11.02. Certain Matters Affecting the Trustee....................11-2
SECTION 11.03. Trustee Not Liable for Certificates or Contracts.........11-3
SECTION 11.04. Rights of Certificateholders to Direct Trustee and
to Waive Event of Termination..........................11-3
SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses..........11-4
SECTION 11.06. Eligibility Requirements for Trustee.....................11-5
SECTION 11.07. Resignation or Removal of Trustee........................11-5
SECTION 11.08. Successor Trustee........................................11-6
SECTION 11.09. Merger or Consolidation of Trustee.......................11-6
SECTION 11.10. Tax Returns..............................................11-7
SECTION 11.11. Obligor Claims...........................................11-7
SECTION 11.12. Appointment of Co-Trustee or Separate Trustee............11-8
SECTION 11.13. Agents of Trustee........................................11-9
ARTICLE XII MISCELLANEOUS.................................................12-1
SECTION 12.01. Servicer Not to Assign Duties or Resign;
Delegation of Servicing Functions......................12-1
SECTION 12.02. Maintenance of Office or Agency..........................12-1
SECTION 12.03. Termination..............................................12-2
SECTION 12.04. Acts of Certificateholders...............................12-3
SECTION 12.05. Calculations.............................................12-4
SECTION 12.06. Assignment or Delegation by Originator...................12-4
SECTION 12.07. Amendment................................................12-5
SECTION 12.08. Notices..................................................12-7
SECTION 12.09. Merger and Integration...................................12-8
SECTION 12.10. Headings.................................................12-8
SECTION 12.11. Governing Law............................................12-8
EXHIBIT A FORM OF CLASS A CERTIFICATE...............................A-1
EXHIBIT B FORM OF CLASS M-[1][2] CERTIFICATE.......................B-1
EXHIBIT C-1 FORM OF CLASS B-[1][2] CERTIFICATE......................C-1-1
EXHIBIT C-2 FORM OF CLASS B-3I CERTIFICATE..........................C-2-1
EXHIBIT D FORM OF ASSIGNMENT........................................D-1
EXHIBIT E FORM OF CERTIFICATE OF OFFICER............................E-1
EXHIBIT F FORM OF OPINION OF COUNSEL FOR THE ORIGINATOR.............F-1
EXHIBIT G FORM OF TRUSTEE'S ACKNOWLEDGMENT..........................G-1
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EXHIBIT H FORM OF CUSTODIAN'S ACKNOWLEDGMENT........................H-1
EXHIBIT I FORM OF CERTIFICATE OF SERVICING OFFICER..................I-1
EXHIBIT J FORM OF CLASS C SUBSIDIARY CERTIFICATE....................J-1
EXHIBIT K FORM OF CLASS C MASTER CERTIFICATE........................K-1
EXHIBIT L-1 FORM OF CERTIFICATE REGARDING REPURCHASED
CONTRACTS.............................................L-1-1
EXHIBIT L-2 FORM OF CERTIFICATE REGARDING SUBSTITUTED
CONTRACTS.............................................L-2-1
EXHIBIT M FORM OF REPRESENTATION LETTER.............................M-1
EXHIBIT N FORM OF MONTHLY REPORT....................................N-1
EXHIBIT O FORM OF ADDITION NOTICE...................................O-1
EXHIBIT P FORM OF SUBSEQUENT TRANSFER INSTRUMENT....................P-1
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AGREEMENT, dated as of February 1, 2000, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware, as
originator of the manufactured housing installment sales contracts and
installment loan agreements described herein (the "Originator"), as servicer
(the "Servicer") and as Limited Guarantor of the Class B-2 Certificates (the
"Guarantor"), and U.S. Bank National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
originates, purchases and services manufactured housing installment sales
contracts and installment loan agreements, which contracts provide for
installment payments by or on behalf of the owner of the manufactured home and
grant security interests in the related manufactured home (or, in certain cases,
mortgages or deeds of trust on the real estate to which such manufactured home
is deemed permanently affixed);
WHEREAS, the Seller, the Originator, the Servicer, the Guarantor and the
Trustee wish to set forth the terms and conditions pursuant to which the
"Trust," as hereinafter defined, will acquire the "Contracts," as hereinafter
defined, and the Servicer will manage and service the Contracts;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as provided herein:
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ARTICLE I
DEFINITIONS
SECTION 1.01. General.
For the purpose of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, the terms defined in this Article
include the plural as well as the singular, the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Section
references refer to Sections of the Agreement.
SECTION 1.02. Specific Terms.
"Addition Notice" means, with respect to each transfer of Subsequent
Contracts to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit O, which shall be given not less than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Contracts to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Contracts.
"Additional Contract" means a Contract identified in the List of Contracts
delivered pursuant to Section 2.02(a) that is not an Initial Contract.
"Additional Principal Distribution Amount" means, as to any Remittance
Date, the Amount Available remaining after payment of the amounts described in
clauses (1) through (11) of Section 8.03(a), subject to the limitations and
conditions specified in Section 8.03(a)(12).
"Adjusted Amount Available" means, as to any Remittance Date, the sum of
the Amount Available and any amount withdrawn from the Capitalized Interest
Account or Pre-Funding Account and deposited in the Certificate Account on such
Remittance Date.
"Adjusted Certificate Principal Balance" means, as of any Remittance Date,
the sum of the Class A Principal Balance, the Class M-1 Adjusted Principal
Balance, the Class M-2 Adjusted Principal Balance, the Class B-1 Adjusted
Principal Balance and the Class B-2 Principal Balance as of that Distribution
Date.
"Advance Payment" means any payment by an Obligor in advance of the related
Due Period in which it would be due under such Contract and which payment is not
a Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
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"Agreement" means this Pooling and Servicing Agreement, as the same may be
amended or supplemented from time to time.
"Amount Available" means, as to any Remittance Date, an amount equal to
(a) the sum of
(i) the amount on deposit in the Certificate Account as of the close
of business on the last day of the related Due Period,
(ii) any amounts required to be deposited in the Certificate Account
on the Business Day immediately preceding such Remittance Date
pursuant to Section 5.09, and
(iii) all collections in respect of principal on the Contracts
received after the last day of the related Due Period up to and
including the third Business Day prior to such Remittance Date
(but in no event later than the 25th day of the month prior to
such Remittance Date), minus
(b) the sum as of the close of business on the Business Day preceding such
Remittance Date of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from the
Certificate Account pursuant to clauses (b) - (e), inclusive, of
Section 8.02, and
(iii) with respect to all Remittance Dates other than the Remittance
Date in April 2000, all collections in respect of principal on the
Contracts received on or after the first day of the related Due
Period up to and including the third Business Day prior to the
preceding Remittance Date (but in no event later than the 25th day
of the month prior to the preceding Remittance Date).
"Amount Held for Future Distribution" means, as to any Remittance Date, the
total of the amounts held in the Certificate Account on the last day of the
related Due Period on account of Advance Payments in respect of such related Due
Period (not including any portion of Advance Payments received during such
related Due Period that was distributed on the prior Remittance Date pursuant to
clause (vi) of the definition of "Formula Principal Distribution Amount").
"Applicants" has the meaning assigned in Section 9.06.
"Appraised Value" means, with respect to any Manufactured Home, the value
of such Manufactured Home as determined by a professional appraiser (who may be
an employee of the Company).
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"Assumption Fee" means any assumption or other similar fee paid by the
Obligor on a Contract.
"Auction Date" has the meaning assigned in Section 8.05(e).
"Authenticating Agent" means any authenticating agent appointed pursuant to
Section 9.07.
"Average Sixty-Day Delinquency Ratio" means the arithmetic average of the
Sixty-Day Delinquency Ratios for such Remittance Date and for the two
immediately preceding Remittance Dates.
"Book-Entry Certificate" means any Certificate registered in the name of
the Depository or its nominee ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than (a) a Saturday or a Sunday, or (b)
another day on which banking institutions in the city in which a Person is
taking action hereunder are authorized or obligated by law, executive order or
governmental decree to be closed.
"Capitalized Interest Account" means the account established and maintained
pursuant to Section 8.06.
"Certificates" means the Class A, Class M, Class B, Class B-3I, and Class C
Certificates, collectively.
"Certificate Account" means the account established and maintained pursuant
to Section 5.05.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate.
"Certificate Register" means the register maintained pursuant to Section
9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.
"Certificateholder" or "Holder" means the person in whose name a
Certificate is registered on the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Regular Certificate registered in the name of the Originator or
the Seller or any of their Affiliates shall be deemed not to be outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite Percentage Interest necessary to effect any
such consent, request, waiver or demand has been obtained; provided, however,
that, solely for the purpose of determining whether the Trustee is entitled to
rely upon any such consent, waiver, request or
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demand, only Regular Certificates which the Trustee knows to be so owned shall
be so disregarded.
"Class," "Class A," "Class M," "Class B," "Class B-3I" or "Class C" means
pertaining to each Class of Class A Certificates, Class M Certificates, Class B
Certificates, Class B-3I Certificates and/or Class C Certificates, as the case
may be.
"Class A Certificate" means any one of the Class A-1, Class A-2, Class A-3,
Class A-4 and Class A-5 Certificates executed and delivered by the Trustee
substantially in the form set forth in Exhibit A and evidencing an interest
designated as a "regular interest" in the Master REMIC for purposes of the REMIC
Provisions.
"Class A Distribution Amount" means, as to any Remittance Date, the lesser
of (a) the Adjusted Amount Available for such Remittance Date (less any amounts
paid to the Servicer pursuant to Section 8.03(a)(1)) and (b) the Class A Formula
Distribution Amount for such Remittance Date; provided that after the A-5
Cross-Over Date the Class A Distribution Amount shall be zero.
"Class A-5 Cross-Over Date" means the Remittance Date on which the Class
A-5 Principal Balance (after giving effect to the distributions of principal on
the Class A-5 Certificates on such Remittance Date) is reduced to zero.
"Class A Formula Distribution Amount" means, as to any Remittance Date, an
amount equal to the sum of (a) interest (calculated in the manner specified in
Section 1.03) at (i) the Class A-1 Remittance Rate on the Class A-1 Principal
Balance, (ii) the Class A-2 Remittance Rate on the Class A-2 Principal Balance,
(iii) the Class A-3 Remittance Rate on the Class A-3 Principal Balance, (iv) the
Class A-4 Remittance Rate on the Class A-4 Principal Balance, and (v) the Class
A-5 Remittance Rate on the Class A-5 Principal Balance, in each case calculated
immediately prior to such Remittance Date, (b) the aggregate Unpaid Class A
Interest Shortfall, if any, (c) the Class A Percentage of the Formula Principal
Distribution Amount, (d) any Unpaid Class A Principal Shortfall and (e) any
Additional Principal Distribution Amount to be distributed to the Class A
Certificates pursuant to Section 8.03(a)(12); provided, however, that the
aggregate of all amounts distributed for all Remittance Dates pursuant to
clauses (c), (d) and (e) shall not exceed the sum of the Original Class A-l
Principal Balance, the Original Class A-2 Principal Balance, the Original Class
A-3 Principal Balance, the Original Class A-4 Principal Balance, and the
Original Class A-5 Principal Balance.
"Class A Interest Distribution Amount" means, as to each Class of Class A
Certificates and any Remittance Date, the sum of the amounts specified in clause
(a)(i), (a)(ii), (a)(iii), (a)(iv), and (a)(v), as applicable, of the definition
of the term "Class A Formula Distribution Amount" plus the Unpaid Class A
Interest Shortfall, if any, with respect to such Class.
"Class A Interest Shortfall" means, as to any Remittance Date and with
respect to each Class of Class A Certificates, the amount, if any, by which the
amount distributed to Holders of such Class of Class A Certificates on such
Remittance Date pursuant to Section 8.03(a)(2) is less than the Class A Interest
Distribution Amount for such Class.
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"Class A Percentage" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the Class A Principal
Balance and the denominator of which is the sum of (a) the Class A Principal
Balance, (b) if the Class M-1 Distribution Test is satisfied, the Class M-1
Principal Balance, otherwise zero, (c) if the Class M-2 Distribution Test is
satisfied, the Class M-2 Principal Balance, otherwise zero, and (d) if the Class
B Distribution Test is satisfied, the sum of the Class B Principal Balance and
the Overcollateralization Amount, otherwise zero.
"Class A Principal Balance" means, as to any Remittance Date, the sum of
the Class Principal Balances of the Class A Certificates.
"Class A Principal Deficiency Amount" means, as to any Remittance Date, the
amount, if any, by which the Pool Scheduled Principal Balance plus any
Pre-Funded Amount is less than the Class A Principal Balance.
"Class A Principal Shortfall" means, as to any Remittance Date, the amount,
if any, by which the amount distributed to Holders of Class A Certificates on
such Remittance Date pursuant to Sections 8.03(a)(6)(i) and (iii) is less than
the Class A Percentage of the Formula Principal Distribution Amount for such
Remittance Date.
"Class A-1 Remittance Rate" means 6.84% per annum.
"Class A-2 Remittance Rate" means 7.19% per annum.
"Class A-3 Remittance Rate" means 7.30% per annum.
"Class A-4 Remittance Rate" means 7.62% per annum.
"Class A-5 Remittance Rate" means 8.06% per annum.
"Class A-1-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S3 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S4 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
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"Class A-S5 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class B-1 Adjusted Principal Balance" means, as of any Remittance Date,
the Class B-1 Principal Balance as of that Remittance Date minus the Class B-1
Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class B Certificate" means any one of the Class B-1 or Class B-2
Certificates.
"Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-1 Cross-Over Date" means the Remittance Date on which the Class
B-1 Principal Balance (after giving effect to the distributions of principal on
the Class B-1 Certificates on such Remittance Date) is reduced to zero.
"Class B-1 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, (iii) the Class M-1 Distribution Amount, and (iv) the Class M-2
Distribution Amount and (b) the Class B-1 Formula Distribution Amount for such
Remittance Date; provided that after the Class B-1 Cross-Over Date the Class B-1
Distribution Amount shall be zero.
"Class B-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Remaining Amount Available and (b) the Class B-2 Formula
Distribution Amount for such Remittance Date.
"Class B Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that (i) such Remittance Date occurs in or after April 2004;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is less
than or equal to 5.00%; (iii) the Cumulative Realized Losses Test for such
Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for such
Remittance Date is less than or equal to 2.75%; (v) the fraction, expressed as a
percentage, the numerator of which is the sum of the Class B Principal Balance
and the Overcollateralization Amount as of such Remittance Date and the
denominator of which is the Pool Scheduled Principal Balance as of the
immediately preceding Remittance Date, is equal to or greater than 12.75%; and
(vi) the Class B Principal Balance as of such Remittance Date is greater than or
equal to $18,000,000.
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<PAGE>
"Class B-1 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) interest (calculated in the manner specified
in Section 1.03) at the Class B-1 Remittance Rate on the Class B-1 Adjusted
Principal Balance as of such Remittance Date, (b) any Unpaid Class B-1 Interest
Shortfall, (c) the Class B Percentage of the Formula Principal Distribution
Amount, (d) any Unpaid Class B-1 Principal Shortfall, (e) any Additional
Principal Distribution Amount to be distributed to the Class B-1 Certificates
pursuant to Section 8.03(a)(12), (f) any Class B-1 Liquidation Loss Interest
Amount, and (g) any Unpaid Class B-1 Liquidation Loss Interest Shortfall;
provided, however, that on the Class M-2 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses (c),
(d) and (e) of the term "Class M-2 Formula Distribution Amount" (assuming a
sufficient Amount Available) but for the operation of the second proviso to such
term shall instead be included in clause (c) or (e) of this definition, as
applicable; provided, further, that the aggregate of all amounts distributed
pursuant to clauses (c), (d) and (e) of this definition shall not exceed the
Original Class B-1 Principal Balance.
"Class B-2 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) interest (calculated in the manner specified
in Section 1.03) at the Class B-2 Remittance Rate on the Class B-2 Principal
Balance as calculated immediately prior to such Remittance Date, (b) any Unpaid
Class B-2 Interest Shortfall, (c) (i) if such Remittance Date is prior to or on
the Class B-1 Cross-Over Date, zero or (ii) if such Remittance Date is after the
Class B-1 Cross-Over Date, the Class B Percentage of the Formula Principal
Distribution Amount, (d) the Class B-2 Liquidation Loss Amount, (e) any Unpaid
Class B-2 Principal Shortfall, and (f) any Additional Principal Distribution
Amount to be distributed to the Class B-2 Certificates pursuant to Section
8.03(a)(12); provided, however, that on the Class B-1 Cross- Over Date, the
balance of any amounts that would have been distributable on such date pursuant
to clauses (c), (d) and (e) of the term "Class B-1 Formula Distribution Amount"
(assuming a sufficient Remaining Amount Available) but for the operation of the
second proviso to such term shall instead be included in clause (c) or (f) of
this definition, as applicable; provided, further, that the aggregate of all
amounts distributed pursuant to clauses (c), (d), (e) and (f) of this definition
shall not exceed the Original Class B-2 Principal Balance.
"Class B-1 Interest Deficiency Amount" means, as to the Class B-1
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class B-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class B-1 Certificateholders pursuant to
Section 8.03(a)(5)(i) and (ii) and Section 8.03(a)(9)(iii) and (iv) on such
Remittance Date.
"Class B-1 Interest Distribution Amount" means, as to any Remittance Date,
the amount specified in clause (a) of the definition of "Class B-1 Formula
Distribution Amount" plus the Unpaid Class B-1 Interest Shortfall, if any.
"Class B-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class B-1 Certificates on such Remittance Date pursuant to Sections
8.03(a)(5)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class B-1 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class B-1 Interest Distribution Amount for such Remittance Date.
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<PAGE>
"Class B-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(10)(i) and
(ii), together with any Guarantee Payment, is less than the sum of the amounts
specified in clauses (a) and (b) of the definition of the term "Class B-2
Formula Distribution Amount."
"Class B-1 Liquidation Loss Amount" means, as of any Remittance Date, the
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance and
the Class B-1 Principal Balance for such Remittance Date exceeds the sum of the
Pre-Funded Amount plus the Pool Scheduled Principal Balance for such Remittance
Date (after giving effect to all distributions of principal on the Class A,
Class M-1, Class M-2 and Class B-1 Certificates on such Remittance Date) and (y)
the Class B-1 Principal Balance (after giving effect to all distributions of
principal on the Class B-1 Certificates on such Remittance Date).
"Class B-2 Liquidation Loss Amount" means, as to any Remittance Date, the
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance, the
Class B-1 Principal Balance and the Class B-2 Principal Balance for such
Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool Scheduled
Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1, Class M-2 and Class B-1
Certificates on such Remittance Date, and all distributions of principal on the
Class B-2 Certificates on such Remittance Date other than pursuant to the
Limited Guarantee) and (y) the Class B-2 Principal Balance.
"Class B-1 Liquidation Loss Interest Amount" means, as to any Remittance
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class B-1 Remittance Rate on the Class B-1 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, as to any Remittance
Date, the amount, if any, by which the amount distributed to Holders of the
Class B-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(9)(iii) is less than the Class B-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class B Percentage" means:
(i) as to any Remittance Date on which the Class B Distribution Test is
not satisfied and the Class A Principal Balance, the Class M-1
Principal Balance and the Class M-2 Principal Balance have not been
reduced to zero, 0%, and
(ii) as to any other Remittance Date, a fraction, expressed as a
percentage, the numerator of which is the Class B Principal Balance
and the denominator of which is the sum of (a) the Class A Principal
Balance, (b) the Class M-1 Principal Balance, (c) the Class M-2
Principal Balance and (d) the sum of the Class B Principal Balance and
the Overcollateralization Amount.
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<PAGE>
"Class B Principal Balance" means, as to any Remittance Date, the sum of
the Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B-1 Principal Balance" means, as to any Remittance Date, the
Original Class B-1 Principal Balance less all amounts previously distributed to
Holders of Class B-1 Certificates on account of principal.
"Class B-2 Principal Balance" means, as to any Remittance Date, the
Original Class B-2 Principal Balance less all amounts previously distributed to
Holders of Class B-2 Certificates on account of principal (including any
Guarantee Payments).
"Class B-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(9)(ii) is less
than the amount described in clause (c) of the definition of the term "Class B-1
Formula Distribution Amount."
"Class B-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(10)(iv),
together with any Guarantee Payment, is less than the sum of the amounts
described in clauses (c) and (d) of the definition of the term "Class B-2
Formula Distribution Amount."
"Class B-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 10.05% per annum.
"Class B-2 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 10.05% per annum.
"Class B-3I Certificate" means any one of the Class B-3I Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-2 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-3I Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Amount Available less all amounts distributed pursuant to
Sections 8.03(a)(1)-(12), and (b) the Class B-3I Formula Distribution Amount for
such Remittance Date.
"Class B-3I Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) the Excess Interest for such Remittance Date,
and (b) any Unpaid Class B-3I Shortfall as of such Remittance Date.
"Class B-3I Shortfall" means, as to any Remittance Date, the amount, if
any, by which (a) the Class B-3I Formula Distribution Amount for such Remittance
Date exceeds (b) the Class B-3I Distribution Amount for such Remittance Date.
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<PAGE>
"Class B-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class B-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class C Certificate" means any one of the Class C Subsidiary or Class C
Master Certificates.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Master Certificate" means a Class C Master Certificate executed
and delivered by the Trustee substantially in the form of Exhibit K, and
evidencing an interest designated as the "residual interest" in the Master REMIC
for purposes of the REMIC Provisions.
"Class C Master Distribution Amount" means, as to any Remittance Date, the
amount, if any, distributable pursuant to Section 8.03(a)(15).
"Class C Subsidiary Certificate" means a Class C Subsidiary Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Subsidiary REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, as to any Remittance Date,
the amounts, if any, distributable pursuant to Section 8.03(b)(6).
"Class M Certificate" means any one of the Class M-1 or M-2 Certificates
executed and delivered by the Trustee.
"Class M-1 Adjusted Principal Balance" means, as to any Remittance Date,
the Class M-1 Principal Balance as of that Remittance Date minus the Class M-1
Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-2 Adjusted Principal Balance" means, as to any Remittance Date,
the Class M-2 Principal Balance as of that Remittance Date minus the Class M-2
Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
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<PAGE>
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
"Class M-1 Cross-Over Date" means the Remittance Date on which the Class
M-1 Principal Balance (after giving effect to the distributions of principal on
the Class M-1 Certificates on such Remittance Date) is reduced to zero.
"Class M-2 Cross-Over Date" means the Remittance Date on which the Class
M-2 Principal Balance (after giving effect to the distributions of principal on
the Class M-2 Certificates on such Remittance Date) is reduced to zero.
"Class M-1 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1) and (ii) the Class A Distribution
Amount and (b) the Class M-1 Formula Distribution Amount for such Remittance
Date; provided that after the Class M-1 Cross-Over Date the Class M-1
Distribution Amount shall be zero.
"Class M-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, and (iii) the Class M-1 Distribution Amount and (b) the Class M-2
Formula Distribution Amount for such Remittance Date; provided that after the
Class M-2 Cross-Over Date the Class M-2 Distribution Amount shall be zero.
"Class M-1 Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that (i) such Remittance Date occurs in or after April 2004;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is less
than or equal to 5.00%; (iii) the Cumulative Realized Losses Test for such
Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for such
Remittance Date is less than or equal to 2.75%; and (v) the fraction, expressed
as a percentage, the numerator of which is the sum of the Class M-1 Principal
Balance, the Class M-2 Principal Balance, the Class B Principal Balance and the
Overcollateralization Amount as of such Remittance Date and the denominator of
which is the Pool Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 26.25%.
"Class M-2 Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that (i) such Remittance Date occurs in or after April 2004;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is less
than or equal to 5.00%; (iii) the Cumulative Realized Losses Test for such
Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for such
Remittance Date is less than or equal to 2.75%; and (v) the fraction, expressed
as a percentage, the numerator of which is the sum of the Class M-2 Principal
Balance, the Class B Principal Balance and the Overcollateralization Amount as
of such Remittance Date and the denominator of which is the Pool Scheduled
Principal Balance as of the immediately preceding Remittance Date, is equal to
or greater than 18.75%.
"Class M-1 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) interest (calculated in the manner specified
in Section 1.03) at the Class
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<PAGE>
M-1 Remittance Rate on the Class M-1 Adjusted Principal Balance as of such
Remittance Date, (b) the aggregate Unpaid Class M-1 Interest Shortfall, if any,
(c) the Class M-1 Percentage of the Formula Principal Distribution Amount, (d)
any Unpaid Class M-1 Principal Shortfall, (e) any Additional Principal
Distribution Amount to be distributed to the Class M-1 Certificates pursuant to
Section 8.03(a)(12), (f) any Class M-1 Liquidation Loss Interest Amount, and (g)
any Class M-1 Liquidation Loss Interest Amount, and (g) any Unpaid Class M-1
Liquidation Loss Interest Shortfall; provided, however, that on the Class A-5
Cross-Over Date, the balance of any amounts that would have been distributable
on such date pursuant to clauses (c), (d) and (e) of the term "Class A Formula
Distribution Amount" (assuming a sufficient Amount Available) but for the
operation of the proviso to such term shall instead be included in clause (c) or
(e) of this definition, as applicable; provided, further, that the aggregate of
all amounts distributed for all Remittance Dates pursuant to clauses (c), (d)
and (e) shall not exceed the Original Class M-1 Principal Balance.
"Class M-2 Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) interest (calculated in the manner specified
in Section 1.03) at the Class M-2 Remittance Rate on the Class M-2 Adjusted
Principal Balance as of such Remittance Date, (b) the aggregate Unpaid Class M-2
Interest Shortfall, if any, (c) the Class M-2 Percentage of the Formula
Principal Distribution Amount, (d) any Unpaid Class M-2 Principal Shortfall, (e)
any Additional Principal Distribution Amount to be distributed to the Class M-2
Certificates pursuant to Section 8.03(a)(12), (f) any Class M-2 Liquidation Loss
Interest Amount, and (g) any Unpaid Class M-2 Liquidation Loss Interest
Shortfall; provided, however, that on the Class M-1 Cross- Over Date, the
balance of any amounts that would have been distributable on such date pursuant
to clauses (c), (d) and (e) of the term "Class M-1 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the proviso to
such term shall instead be included in clause (c) or (e) of this definition, as
applicable; provided, further, that the aggregate of all amounts distributed for
all Remittance Dates pursuant to clauses (c), (d) and (e) shall not exceed the
Original Class M-2 Principal Balance.
"Class M-1 Interest Deficiency Amount" means, as to the Class M-1
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class M-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-1 Certificateholders pursuant to
Section 8.03(a)(3)(i) and (ii) and Section 8.03(a)(7)(iii) and (iv) on such
Remittance Date.
"Class M-2 Interest Deficiency Amount" means, as to the Class M-2
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class M-2 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-2 Certificateholders pursuant to
Section 8.03(a)(4)(i) and (ii) and Section 8.03(a)(8)(iii) and (iv) on such
Remittance Date.
"Class M-1 Interest Distribution Amount" means, as to any Remittance Date,
the amount specified in clause (a) of the definition of the term "Class M-1
Formula Distribution Amount" plus the Unpaid Class M-1 Interest Shortfall, if
any.
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<PAGE>
"Class M-2 Interest Distribution Amount" means, as to any Remittance Date,
the amount specified in clause (a) of the definition of the term "Class M-2
Formula Distribution Amount" plus the Unpaid Class M-2 Interest Shortfall, if
any.
"Class M-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(3)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-1 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class M-1 Interest Distribution Amount for such Remittance Date.
"Class M-2 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(4)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-2 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class M-2 Interest Distribution Amount for such Remittance Date.
"Class M-1 Liquidation Loss Amount" means, as to any Remittance Date, the
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance and the Class M-1 Principal Balance for such Remittance Date exceeds the
sum of the Pre-Funded Amount plus the Pool Scheduled Principal Balance for such
Remittance Date (after giving effect to all distributions of principal on the
Class A and Class M-1 Certificates on such Remittance Date) and (y) the Class
M-1 Principal Balance (after giving effect to all distributions of principal on
the Class M-1 Certificates on such Remittance Date).
"Class M-2 Liquidation Loss Amount" means, as to any Remittance Date, the
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance and the Class M-2 Principal Balance for
such Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool
Scheduled Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1 and Class M-2 Certificates
on such Remittance Date) and (y) the Class M-2 Principal Balance (after giving
effect to all distributions of principal on the Class M-2 Certificates on such
Remittance Date).
"Class M-1 Liquidation Loss Interest Amount" means, as to any Remittance
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class M-1 Remittance Rate on the Class M-1 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class M-2 Liquidation Loss Interest Amount" means, as to any Remittance
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class M-2 Remittance Rate on the Class M-2 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class M-1 Liquidation Loss Interest Shortfall" means, as to any Remittance
Date, the amount, if any, by which the amount distributed to Holders of the
Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(7)(iii) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.
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<PAGE>
"Class M-2 Liquidation Loss Interest Shortfall" means, as to any Remittance
Date, the amount, if any, by which the amount distributed to Holders of the
Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(8)(iii) is less than the Class M-2 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-1 Percentage" means:
(i) as to any Remittance Date prior to the Class A-5 Cross-Over Date and
on which the Class M-1 Distribution Test is not satisfied, 0%, and
(ii) as to any Remittance Date after the Class A-5 Cross-Over Date or on
which the Class M-1 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-1
Principal Balance and the denominator of which is the sum of (a) the
Class A Principal Balance, (b) the Class M-1 Principal Balance, (c) if
the Class M-2 Distribution Test is satisfied, the Class M-2 Principal
Balance, otherwise zero, and (d) if the Class B Distribution Test is
satisfied, the sum of the Class B Principal Balance and the
Overcollateralization Amount, otherwise zero.
"Class M-2 Percentage" means:
(i) as to any Remittance Date prior to the Class M-1 Cross-Over Date and
on which the Class M-2 Distribution Test is not satisfied, 0%, and
(ii) as to any Remittance Date after the Class M-1 Cross-Over Date or on
which the Class M-2 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-2
Principal Balance and the denominator of which is the sum of (a) the
Class A Principal Balance, (b) the Class M-1 Principal Balance, (c)
the Class M-2 Principal Balance, and (d) if the Class B Distribution
Test is satisfied, the sum of the Class B Principal Balance and the
Overcollateralization Amount, otherwise zero.
"Class M-1 Principal Balance" means, as to any Remittance Date, the
Original Class M-1 Principal Balance less all amounts previously distributed to
Holders of Class M-1 Certificates on account of principal.
"Class M-2 Principal Balance" means, as to any Remittance Date, the
Original Class M-2 Principal Balance less all amounts previously distributed to
Holders of Class M-2 Certificates on account of principal.
"Class M-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-1
Certificates on such Remittance Date pursuant to Sections 8.03(a)(7)(ii) is less
than the Class M-1 Percentage of the Formula Principal Distribution Amount for
such Remittance Date.
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<PAGE>
"Class M-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(8)(ii) is less
than the Class M-2 Percentage of the Formula Principal Distribution Amount for
such Remittance Date.
"Class M-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 8.30% per annum.
"Class M-2 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 9.08% per annum.
"Class M-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class M-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class Principal Balance" means, as to any Remittance Date and each Class
of Certificates, the Original Principal Balance of such Class less all amounts
previously distributed to Holders of such Class of Certificates on account of
principal.
"Closing Date" means February 8, 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" means, with respect to any Contract, (i) the security
interests granted by or on behalf of the related Obligor with respect thereto,
including a first priority perfected security interest in the related
Manufactured Home, (ii) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such Contract,
whether pursuant to the agreement giving rise to such Contract or otherwise,
together with all financing statements signed by the Obligor describing any
collateral securing such Contract, (iii) all guarantees, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Contract whether pursuant to the agreement giving rise
to such Contract or otherwise, and (iv) all records in respect of such Contract.
"Computer Tape" means the computer tape generated by the Originator which
provides information relating to the Contracts and which was used by the
Originator in selecting the Contracts, and includes the master file and the
history file.
"Contracts" means the manufactured housing installment sales contracts and
installment loan agreements, including any Land-and-Home Contracts, described in
the List of Contracts and constituting part of the corpus of the Trust, which
Contracts are to be assigned and conveyed by
1-15
<PAGE>
the Seller to the Trust, and includes, without limitation, all related security
interests and any and all rights to receive payments which are due pursuant
thereto after the applicable Cut-off Date, but excluding any rights to receive
payments which are due pursuant thereto on or before the applicable Cut-off
Date.
"Contract File" means, as to each Contract, other than a Land-and-Home
Contract, (a) the original copy of the Contract, (b) either (i) the original
title document for the related Manufactured Home or a duplicate certified by the
appropriate governmental authority which issued the original thereof or the
application for such title document or (ii) if the laws of the jurisdiction in
which the related Manufactured Home is located do not provide for the issuance
of title documents for manufactured housing, other evidence of ownership of the
related Manufactured Home which is customarily relied upon in such jurisdiction
as evidence of title to a manufactured housing unit, (c) evidence of one or more
of the following types of perfection of the security interest in the related
Manufactured Home granted by such Contract, as appropriate: (i) notation of such
security interest on the title document, (ii) a financing statement meeting the
requirements of the UCC, with evidence of recording indicated thereon, or (iii)
such other evidence of perfection of a security interest in a manufactured
housing unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located, (d) the assignment of the Contract from
the originator (if other than Conseco Finance Corp.) to the Originator, (e)
evidence of any other Collateral Security, including with respect to a
Land-in-Lieu Contract, the mortgage or deed of trust, and (f) any extension,
modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the rate of
interest specified in that Contract and computed on a precomputed basis with an
actuarial rebate of unearned interest upon prepayment, provided that the rebate
upon prepayment of Contracts originated in California or Oklahoma may be
computed on the simple interest method if so required by applicable law or
regulations.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Agreement is located at the
address set forth in Section 12.08.
"Corresponding Certificate Class" means, with respect to each Class of
Uncertificated Subsidiary Interests, as follows:
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Uncertificated Subsidiary Interest Corresponding Certificate Class
- --------------------------------------- -----------------------------------
Class A-S1 Class A-1
Class A-S2 Class A-2
Class A-S3 Class A-3
Class A-S4 Class A-4
Class A-S5 Class A-5
Class M-S1 Class M-1
Class M-S2 Class M-2
Class B-S1 Class B-1
Class B-S2 Class B-2
"Counsel for the Originator and Seller" means Briggs and Morgan, P.A., or
other legal counsel for the Originator and the Seller.
"Cumulative Realized Losses" means, as to any Remittance Date, the sum of
the Realized Losses for that Remittance Date and each preceding Remittance Date
since the Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied" for
any Remittance Date:
(i) if such Remittance Date occurs between April 1, 2004 and March 31,
2005 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 5.5% of the Cut-off Date
Pool Principal Balance;
(ii) if such Remittance Date occurs between April 1, 2005 and March 31,
2006 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 7.0% of the Cut-off Date
Pool Principal Balance;
(iii) if such Remittance Date occurs between April 1, 2006 and March 31,
2007 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 9.0% of the Cut-off Date
Pool Principal Balance; and
(iv) if such Remittance Date occurs on or after April 1, 2007, that the
Cumulative Realized Losses as of such Remittance Date are less than or
equal to 10.5% of the Cut-off Date Pool Principal Balance.
"Current Realized Loss Ratio" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate Realized
Losses for such Remittance Date and each of the two immediately preceding
Remittance Dates, multiplied by four, and the denominator of which is the
arithmetic average of the Pool Scheduled Principal Balance as of the third
preceding Remittance Date and the Pool Scheduled Principal Balance as of such
Remittance Date.
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"Custodian" means at any time the Trustee or a financial institution
organized under the laws of the United States or any State, which is subject to
supervision and examination by Federal or State authorities and which is not the
Originator or an Affiliate of the Originator, that is acting at such time as
Custodian of the Land-and-Home Contract Files pursuant to Section 4.01.
"Cut-off Date" means with respect to a portion of the Initial and
Additional Contracts, January 31, 2000, and for the remainder of the Initial
Contracts and the Additional Contracts, February 28, 2000.
"Cut-off Date Pool Principal Balance" means the aggregate of the Cut-off
Date Principal Balances of the Contracts. With respect to any Staged-Funding
Contract, the Cut-off Date Principal Balance means the principal amount stated
on such Contract.
"Cut-off Date Principal Balance" means, as to any Contract, the unpaid
principal balance thereof at the Cut-off Date, or Subsequent Cut-off Date if a
Subsequent Contract, after giving effect to all installments of principal due on
or prior thereto.
"Defaulted Contract" means a Contract with respect to which the Servicer
commenced repossession or foreclosure procedures, made a sale of such Contract
to a third party for repossession, foreclosure or other enforcement, or as to
which there was a payment delinquent 180 or more days (excluding any Contract
deemed delinquent solely because the Obligor's required monthly payment was
reduced as a result of bankruptcy or similar proceedings).
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is CEDE & CO., as the registered Holder of:
(i) one Certificate evidencing $138,500,000 in initial aggregate principal
balance of the Class A-1 Certificates,
(ii) one Certificate evidencing $40,000,000 in initial aggregate principal
balance of the Class A-2 Certificates,
(iii) one Certificate evidencing $130,500,000 in initial aggregate
principal balance of the Class A-3 Certificates,
(iv) one Certificate evidencing $125,000,000 in initial aggregate principal
balance of the Class A-4 Certificates,
(v) two Certificates evidencing $313,000,000 in initial aggregate
principal balance of the Class A-5 Certificates,
(vi) one Certificate evidencing $45,000,000 in initial aggregate principal
balance of the Class M-1 Certificates,
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(vii) one Certificate evidencing $36,000,000 in initial aggregate principal
balance of the Class M-2 Certificates,
(viii) one Certificate evidencing $27,000,000 in initial aggregate
principal balance of the Class B-1 Certificates, and
(ix) one Certificate evidencing $31,500,000 in initial aggregate principal
balance of the Class B-2 Certificates,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in the Uniform Commercial Code of the State of
New York.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the third Business Day preceding each Remittance
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
"Due Date" means, as to any Contract, the date of the month on which the
scheduled monthly payment for such Contract is due.
"Due Period" means with respect to any Remittance Date other than the
Remittance Date in April 2000, the period from and including the 16th day of the
second month preceding such Remittance Date, to and including the 15th day of
the month immediately preceding such Remittance Date, and with respect to the
Remittance Date in April 2000, the period from and including the Cut-off Date
for the related Contract to and including March 15, 2000.
"Electronic Ledger" means the electronic master record of installment sale
contracts of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following: (i) an account maintained with an Eligible Institution; (ii) a trust
account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Trustee hereunder, which depository institution
or trust company shall have capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the bank holding company shall have capital and surplus) of not less than
$50,000,000 and the securities of such depository institution or trust company
(or, if such depository institution or trust company is a subsidiary of a bank
holding company system and such depository institution's or trust company's
securities are not rated, the securities of the bank holding company) shall have
a credit rating from each of Moody's (if rated by Moody's), Standard & Poor's
(if rated by Standard & Poor's) and Fitch (if rated by Fitch) in one of its
generic credit rating categories which signifies investment grade; or (iii) an
account that will not
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cause Fitch and Moody's to downgrade or withdraw their then-current ratings
assigned to the Certificates, as confirmed in writing by Fitch and Moody's.
"Eligible Institution" means any depository institution (which may be the
Trustee or an Affiliate of the Trustee) organized under the laws of the United
States or any State, the deposits of which are insured to the full extent
permitted by law by the Bank Insurance Fund (currently administered by the
Federal Deposit Insurance Corporation), which is subject to supervision and
examination by federal or state authorities and whose short-term deposits have
been rated P-1 by Moody's (if rated by Moody's), A-1+ by Standard & Poor's (if
rated by Standard & Poor's) and F-1+ by Fitch (if rated by Fitch), or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by Moody's, Standard & Poor's (not lower than AA) and Fitch (if rated
by Fitch) in the case of unsecured long-term debt.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Originator or any Person qualified to act as
Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than an aggregate of $100,000,000 in
outstanding principal amount of manufactured housing conditional sales contracts
and installment loan agreements and, so long as any FHA/VA Contract is
outstanding, which Person is qualified under FHA/VA Regulations to act as a
servicer of all such FHA/VA Contracts.
"Eligible Substitute Contract" means, as to any Replaced Contract for which
such Eligible Substitute Contract is being substituted pursuant to Section
3.06(b), a Contract that (a) as of the date of its substitution, satisfies all
of the representations and warranties (which, except when expressly stated to be
as of origination, shall be deemed to be determined as of the date of its
substitution rather than as of the Cut-off Date or the Closing Date) in Sections
3.02 and 3.03 and does not cause any of the representations and warranties in
Section 3.04, after giving effect to such substitution, to be incorrect, (b)
after giving effect to the scheduled payment due in the month of such
substitution, has a Scheduled Principal Balance that is not greater than the
Scheduled Principal Balance of such Replaced Contract, (c) has a Contract Rate
that is at least equal to the Contract Rate 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, and (e) is a Land-and-Home
Contract if the Replaced Contract is a Land-and-Home Contract and is otherwise
secured by a Manufactured Home that is similar in type and value to the
collateral serving the Replaced Contract. If more than one Contract is being
substituted pursuant to Section 3.06(b) for more than one Replaced Contract on a
particular date, then the conditions specified above shall be applied to the
Contracts being substituted, in the aggregate, and the Replaced Contracts, in
the aggregate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Contracts comprising
a portion of the corpus of the Trust.
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"Event of Termination" has the meaning assigned in Section 7.01.
"Excess Interest" means, as to any Remittance Date, the sum of (a) interest
accrued on the Class A-S1 Subsidiary Interest Principal Balance as of such
Remittance Date at a rate per annum equal to the difference between the Weighted
Average Contract Rate as of such Remittance Date and the Class A-1 Remittance
Rate, (b) interest accrued on the Class A-S2 Subsidiary Interest Principal
Balance at a rate per annum equal to the difference between the Weighted Average
Contract Rate as of such Remittance Date and the Class A-2 Remittance Rate, (c)
interest accrued on the Class A-S3 Subsidiary Interest Principal Balance at a
rate per annum equal to the difference between the Weighted Average Contract
Rate as of such Remittance Date and the Class A-3 Remittance Rate, (d) interest
accrued on the Class A-S4 Subsidiary Interest Principal Balance at a rate per
annum equal to the difference between the Weighted Average Contract Rate as of
such Remittance Date and the Class A-4 Remittance Rate, (e) interest accrued on
the Class A-S5 Subsidiary Interest Principal Balance at a rate per annum equal
to the difference between the Weighted Average Contract Rate as of such
Remittance Date and the Class A-5 Remittance Rate, (f) interest accrued on the
Class M-S1 Subsidiary Interest Principal Balance at a rate per annum equal to
the difference between the Weighted Average Contract Rate as of such Remittance
Date and the Class M-1 Remittance Rate, (g) interest accrued on the Class M-S2
Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class M-2 Remittance Rate, (h) interest accrued on the Class B-S1
Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class B-1 Remittance Rate, and (i) interest accrued on the Class B-S2
Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class B-2 Remittance Rate.
"FHA/VA Contract" means a Contract that, at its origination, was insured by
the Federal Housing Administration or partially guaranteed by the Veterans
Administration.
"FHA/VA Regulations" means, as to any FHA/VA Contract, the contractual
agreements and regulations of the Federal Housing Administration or the Veterans
Administration, as the case may be, providing or governing the terms of the
insurance for such Contract by the Federal Housing Administration or the partial
guarantee for such Contract by the Veterans Administration, as the case may be.
"Fidelity Bond" means the fidelity bond maintained by the Servicer or any
similar replacement bond, meeting the requirements of Section 5.09, as such bond
relates to Contracts comprising a portion of the corpus of the Trust.
"Final Remittance Date" means the Remittance Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
12.03.
"Fitch" means Fitch IBCA, Inc., or any successor thereto; provided that if
Fitch does not then have a rating outstanding on any of the Class A, Class M-1,
Class M-2 or Class B Certificates, then references herein to "Fitch" shall be
deemed to refer to the NRSRO then rating any Class of the Certificates (or, if
more than one such NRSRO is then rating any Class of the
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Certificates, to such NRSRO as may be designated by the Servicer), and
references herein to ratings by or requirements of Fitch shall be deemed to have
the equivalent meanings with respect to ratings by or requirements of such
NRSRO.
"Formula Principal Distribution Amount" means, as of any Remittance Date,
the sum of:
(i) all scheduled payments of principal due on each outstanding Contract
during the related Due Period as specified in the amortization
schedule at the time applicable thereto (after adjustments for
previous Partial Principal Prepayments and any adjustment to such
amortization schedule by reason of any bankruptcy of an Obligor or
similar proceeding or any moratorium or similar waiver or grace
period, or by reason of any other waiver modification or extension
granted by the Servicer in accordance with Section 5.06); plus
(ii) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the related Due Period; plus
(iii) the aggregate Scheduled Principal Balance of all Contracts that
became Liquidated Contracts during the related Due Period plus the
amount of any reduction in principal balance of any Contract during
the related Due Period pursuant to bankruptcy proceedings involving
the related Obligor; plus
(iv) the aggregate Scheduled Principal Balance of all Contracts repurchased
during the month preceding the related Due Period pursuant to Section
3.06; plus
(v) with respect to the Remittance Date in May 2000 the Unfunded Contract
Shortfall, if any; plus
(vi) without duplication of the foregoing, all collections in respect of
principal on the Contracts received after the last day of the related
Due Period up to and including the third Business Day prior to such
Remittance Date (but in no event later than the 25th day of the month
in which such Remittance Date occurs); minus
(vii) with respect to all Remittance Dates other than the Remittance Date
in April 2000, the amount, if any, included in the Formula Principal
Distribution Amount for the preceding Remittance Date by virtue of
clause (vi) of the definition of Formula Principal Distribution
Amount; plus
(viii) on the Post Funding Remittance Date, the Pre-Funded Amount; minus
(ix) any amount paid by the Guarantor on the previous Remittance Date
pursuant to Section 8.04 in respect of a Class B-2 Liquidation Loss
Amount.
"Funding Termination Date" means the Business Day immediately preceding the
Remittance Date occurring in the calendar month that is the third calendar month
following the calendar month of the Closing Date, or April 28, 2000.
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"Guarantee Payment" means, the amount, if any, by which (A) the Class B-2
Formula Distribution Amount for such Remittance Date exceeds (B) the Remaining
Amount Available.
"Hazard Insurance Policy" means, with respect to each Contract, the policy
of fire and extended coverage insurance (and federal flood insurance, if the
Manufactured Home is secured by an FHA/VA Contract and such Manufactured Home is
located in a federally designated special flood area) required to be maintained
for the related Manufactured Home, as provided in Section 5.09, and which, as
provided in said Section 5.09, may be a blanket mortgage impairment policy
maintained by the Servicer in accordance with the terms and conditions of said
Section 5.09.
"Independent" means, when used with respect to any specified Person, Briggs
and Morgan, P.A. or any Person who (i) is in fact independent of the Originator,
the Servicer and the Seller, (ii) does not have any direct financial interest or
any material indirect financial interest in the Originator, the Servicer, the
Seller or in an Affiliate of either and (iii) is not connected with the
Originator, the Servicer, or the Seller as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is provided herein that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such opinion or certificate shall
state that the signatory has read this definition and is Independent within the
meaning set forth herein.
"Initial Contracts" means certain Contracts identified in the List of
Contracts delivered pursuant to Section 2.02(a), all of which were originated on
or before January 4, 2000, and which have an aggregate principal balance as of
the Cut-off Date of approximately $472,151,596.42.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract or any FHA/VA Contract.
"Land-and-Home Contract" means a Contract that is secured by a Mortgage on
real estate on which the related Manufactured Home is situated, and which
Manufactured Home is considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.
"Land-and-Home Contract File" means, as to each Land-and-Home Contract, (a)
the original executed copy of the Land-and-Home Contract; (b) the original
related Mortgage with evidence of recording thereon (or, if the original
Mortgage has not yet been returned by the applicable recording office, a copy
thereof, certified by such recording office, which will be replaced by the
original Mortgage when it is so returned) and any title document for the related
Manufactured Home; (c) the assignment of the Land-and-Home Contract and the
related Mortgage from the originator (if other than Conseco Finance Corp.) to
the Originator; (d) an endorsement of such Land-and-Home Contract by the Seller
to the Trustee or in blank; (e) an assignment of the related Mortgage to the
Trustee or in blank; and (f) any extension, modification or waiver agreement(s).
"Land-in-Lieu Contract" means a Contract that is secured by (i) a security
interest in a Manufactured Home and (ii) a mortgage or deed of trust on real
estate on which such
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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.
"Limited Guarantee" means the obligation of the Guarantor to make Guarantee
Payments pursuant to Section 8.04.
"Liquidated Contract" means any defaulted Contract as to which the Servicer
has determined that all amounts which it expects to recover from or on account
of such Contract have been recovered; provided that any defaulted Contract in
respect of which the related Manufactured Home 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" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any defaulted Contract, on or prior to the date on which the
related Manufactured Home and, in the case of Land-and-Home Contracts, Mortgaged
Property, are disposed of, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.
"Liquidation Proceeds" means cash (including Insurance Proceeds) received
in connection with the liquidation of defaulted Contracts, whether through
repossession, foreclosure sale or otherwise, including any rental income
realized from the repossessed Manufactured Home.
"List of Contracts" means the lists identifying each Contract constituting
part of the corpus of the Trust, and which lists are either delivered pursuant
to Section 2.02(a) of this Agreement or attached to a Subsequent Transfer
Instrument as Exhibit A, as such lists may be amended from time to time pursuant
to Section 3.06(b) to add Eligible Substitute Contracts and delete Replaced
Contracts. Each List of Contracts shall set forth as to each Contract identified
on it (i) the Cut-off Date Principal Balance, (ii) the amount of monthly
payments due from the Obligor, (iii) the Contract Rate and (iv) the maturity
date.
"Loan-to-Value Ratio" means, (a) with respect to any Contract other than a
Land-in-Lieu Contract, one minus a fraction, the numerator of which is the total
amount down (which may include both cash (plus, in certain cases, fees and
insurance premiums financed, but not buydown points) and, for certain Contracts,
the amount of any equity in land on which a lien has been granted) and the
denominator of which is the sum of the original principal amount and such amount
down, and (b) with respect to Land-in-Lieu Contracts, one minus a fraction, the
numerator of which is the appraised value of land and the denominator of which
is the original principal amount.
"Manufactured Home" means a unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.
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"Master Certificates" means all of the Certificates other than the Class C
Subsidiary Certificates.
"Master REMIC" means one of the two separate REMICs comprising the corpus
of the Trust created by this Agreement, the assets of which shall consist of the
Uncertificated Subsidiary Interests and the Limited Guarantee.
"Maturity Date" means, as to any Certificate, other than a Class C
Certificate, and as to any Uncertificated Subsidiary Interest, the latest
possible maturity date for purposes of complying with the REMIC Provisions
governing "regular interests." The Maturity Dates for such Certificates and
Uncertificated Subsidiary Interests are set forth in Sections 2.05 (b) and (c).
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Remittance Date, one-twelfth of
the product of 0.50% and the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date (or, with respect to the first Remittance
Date, the Cut-off Date Pool Principal Balance as of the Closing Date).
"Moody's" means Moody's Investors Service, Inc., or any successor thereto;
provided that, if Moody's provided a rating on any of the Certificates, as
required by Section 2.02, and does not as of any subsequent date have a rating
outstanding on any of the Class A, Class M-1, Class M-2 or Class B Certificates,
then references herein to "Moody's" shall be deemed to refer to the NRSRO then
rating any Class of the Certificates (or, if more than one such NRSRO is then
rating any Class of the Certificates, to such NRSRO as may be designated by the
Servicer), and references herein to ratings by or requirements of Moody's shall
be deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
"Mortgage" means the mortgage, deed of trust, security deed or similar
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.
"Mortgaged Property" means the property subject to the lien of a Mortgage.
"Net Liquidation Loss" means, as to a Liquidated Contract, the amount, if
any, by which (a) the outstanding principal balance of such Liquidated Contract
plus accrued and unpaid interest thereon to the date on which such Liquidated
Contract became a Liquidated Contract exceeds (b) the Net Liquidation Proceeds
for such Liquidated Contract.
"Net Liquidation Proceeds" means, as to a Liquidated Contract, all
Liquidation Proceeds received on or prior to the last day of the month in which
such Contract became a Liquidated Contract, net of Liquidation Expenses.
"NRSRO" means any nationally recognized statistical rating organization.
"Obligor" means each Person who is indebted under a Contract.
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"Officer's Certificate" means a certificate signed by the Chairman of the
Board, President or any Vice President of the Originator or the Seller and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may, except as
expressly provided herein, be salaried counsel for the Originator or the Seller,
acceptable to the Trustee and the Originator or the Seller, provided that any
opinion of counsel relating to the qualification of the Subsidiary REMIC or the
Master REMIC as a REMIC or compliance with the REMIC Provisions must be an
opinion of Independent counsel.
"Original Class A Principal Balance" means the Original Principal Balance
of the Class A Certificates.
"Original Principal Balance" means as to each Class of Master Certificates,
the amount set forth with respect to such Class in Section 2.05(b).
"Overcollateralization Amount" means, as of any Remittance Date, the amount
by which the aggregate Class Principal Balance of the Certificates for such
Remittance Date is less than the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date.
"Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Certificate Account pursuant to the provision in Section 3.06(a) or pursuant to
Section 3.06(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Percentage Interest" means, as to any Certificate, the percentage interest
evidenced thereby in distributions made on the related Class, such percentage
interest being equal to, in the case of the Class A, Class M-1, Class M-2, and
Class B Certificates, the percentage (carried to eight places) obtained from
dividing the denomination of such Certificate by the Original Principal Balance
of the related Class; and in the case of the Class B-3I and Class C
Certificates, the percentage specified on the face of such Certificate. The
aggregate Percentage Interests for each Class of Certificates shall equal 100%,
respectively.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Pool Factor" means, at any time, the percentage derived from a fraction,
the numerator of which is the aggregate Principal Balance of each Class of
Certificates at such time and the denominator of which is the Cut-off Date Pool
Principal Balance.
"Pool Scheduled Principal Balance" means, as of any Remittance Date, the
aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Due Period.
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"Post-Funding Remittance Date" means the first Remittance Date after the
last day of the Pre-Funding Period.
"Pre-Funded Amount" means with respect to any date of determination, the
amount then on deposit in the Pre-Funding Account, after giving effect to any
sale of Subsequent Contracts to the Trust on such date, excluding any investment
earnings.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.07.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000, (b) the Funding Termination Date or
(c) the date on which an Event of Termination occurs.
"Pre-Funding Subaccount" means the subaccount, if any, so designated,
established and maintained pursuant to Section 8.07.
"Principal Prepayment" means a payment or other recovery of principal on a
Contract (exclusive of Liquidation Proceeds) which is received in advance of its
scheduled due date and applied upon receipt (or, in the case of a Partial
Principal Prepayment, upon the next scheduled payment date on such Contract) to
reduce the outstanding principal amount due on such Contract prior to the date
or dates on which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the entire
principal balance of a Contract.
"Ratings Adjustment Date" has the meaning assigned in Section 3.08
"Rating Agencies" means Moody's and Fitch.
"Realized Losses" means, as to any Remittance Date, the aggregate Net
Liquidation Losses of all Contracts that became Liquidated Contracts during the
immediately preceding month.
"Record Date" means the Business Day immediately preceding the related
Remittance Date.
"Regular Certificate" means a Class A, Class M, Class B or Class B-3I
Certificate.
"Remaining Amount Available" means, as to any Remittance Date, the Adjusted
Amount Available less all amounts distributed pursuant to Sections
8.03(a)(1)-(9).
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
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"REMIC Provisions" means the provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and any temporary, proposed or final regulations promulgated
thereunder, as the foregoing may be in effect from time to time.
"Remittance Date" means the first day of each month during the term of this
Agreement, or if such day is not a Business Day, the next succeeding Business
Day, commencing on April 3, 2000.
"Remittance Rate" means with respect to each Class of Certificates, the
rate set forth for such Class in Section 2.05(b).
"Replaced Contract" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Contract to be repurchased
pursuant to Section 3.06, an amount equal to (a) the remaining principal amount
outstanding on such Contract (or, with respect to an Unfunded Contract being
repurchased pursuant to Section 3.06(c), the Cut-off Date Principal Balance of
such Unfunded Contract), plus (b) interest at the Contract Rate on such Contract
from the end of the Due Period with respect to which the Obligor last made a
payment through the end of the immediately preceding Due Period.
"Responsible Officer" means, with respect to the Trustee, the chairman and
any vice chairman of the board of directors, the president, the chairman and
vice chairman of any executive committee of the board of directors, every vice
president, assistant vice president, the secretary, every assistant secretary,
cashier or any assistant cashier, controller or assistant controller, the
treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"Scheduled Principal Balance" means, as to any Contract and any Remittance
Date, or the Cut-off Date or the Subsequent Cut-off Date, as applicable, the
principal balance of such Contract as of the Due Date in the related Due Period
or as of the Due Date immediately preceding the Cut-off Date or the Subsequent
Cut-off Date, as applicable, as the case may be, as specified in the
amortization schedule at the time relating thereto (after any adjustment to such
amortization schedule by reason of any bankruptcy of an Obligor or similar
proceeding or any moratorium or similar waiver or grace period) after giving
effect to any previous Partial Principal Prepayments and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by, or extension granted to, the related Obligor.
"Servicer" means the Originator until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Service Transfer" has the meaning assigned in Section 7.02.
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"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Originator, as the same may be amended from time
to time.
"Sixty-Day Delinquency Ratio" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Contracts that were delinquent 60 days or more as of
the end of the related Due Period (including Contracts in respect of which the
related Manufactured Homes have been repossessed but are still in inventory),
and the denominator of which is the Pool Scheduled Principal Balance as of such
Remittance Date.
"Staged-Funding Contract" means an Initial or Additional Contract with
respect to which the Company has agreed to make multiple disbursements (up to
the related Cut-off Date Principal Balance) with respect to the purchase of the
related Manufactured Home and improvement of the related real estate, but not
all such disbursements have been made as of the Closing Date.
"Staged-Funding Contract Reserve Account" means the account established and
maintained pursuant to Section 3.08.
"Standard & Poor's" means Standard & Poor's Rating Services, a division of
The McGraw-Hill Companies, Inc., or any successor thereto.
"Step-up Rate Contract" means any Contract bearing interest during an
initial period or periods at a fixed rate or fixed rates that are lower than the
fixed rate borne thereafter.
"Subsequent Contract" means a Contract sold by the Company to the Trust
pursuant to Section 2.03, such Contract being identified on Exhibit A attached
to a Subsequent Transfer Instrument.
"Subsequent Cut-off Date" means, with respect to a Subsequent Contract, the
last day of the calendar month in which the related Subsequent Transfer Date
occurs.
"Subsequent Transfer Date" means, with respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Contracts are sold to the
Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer Instrument
dated as of a Subsequent Transfer Date executed by the Seller substantially in
the form of Exhibit P, by which the Seller sells Subsequent Contracts to the
Trust.
"Subsidiary Interest Principal Balance" means, with respect to each Class
of Uncertificated Subsidiary Interests, the Principal Balance of the
Corresponding Certificate Class.
"Subsidiary Interest Shortfall" means, with respect to each Class of
Uncertificated Subsidiary Interests and any Remittance Date, the amount, if any,
by which the amount
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distributed on such Class on such Remittance Date pursuant to Section 8.03(b)(5)
is less than the amount specified in Section 8.03(b)(5).
"Subsidiary REMIC" means one of the two separate REMICs comprising the
corpus of the Trust created by this Agreement, the assets of which shall consist
of (a) all the rights, benefits, and obligations arising from and in connection
with each Contract and any related Mortgage, (b) all rights under any Hazard
Insurance Policy relating to a Manufactured Home securing a Contract for the
benefit of the creditor of such Contract and proceeds from the Errors and
Omissions Protection Policy and any blanket hazard policy to the extent such
proceeds relate to any Manufactured Home, (c) all rights under any FHA/VA
Regulation pertaining to any FHA/VA Contract, (d) all remittances, deposits and
payments made into the Certificate Account and amounts in the Certificate
Account (other than payments on the Subsidiary Interests and any Guarantee
Payments), (e) all proceeds in any way derived from any of the foregoing items,
and (f) all documents contained in the Contract Files or the Land-and-Home
Contract Files.
"Transfer Agreement" means that certain Transfer Agreement between Conseco
Finance Securitizations Corp., as Purchaser, and Conseco Finance Corp., as
Seller, dated as of February 1, 1999.
"Trust" means the trust created by this Agreement, known as Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2000-1, the
corpus of which consists of (a) all the rights, benefits, and obligations
arising from and in connection with each Contract and any related Mortgage, (b)
all rights under any Hazard Insurance Policy relating to a Manufactured Home
securing a Contract for the benefit of the creditor of such Contract and
proceeds from the Errors and Omissions Protection Policy and any blanket hazard
policy to the extent such proceeds relate to any Manufactured Home, (c) all
rights under any FHA/VA Regulation pertaining to any FHA/VA Contract, (d) all
rights of the Seller under the Transfer Agreement, (e) all remittances, deposits
and payments made into the Certificate Account and amounts in the Certificate
Account, (f) all proceeds in any way derived from any of the foregoing items,
(g) all documents contained in the Contract Files or the Land-and-Home Contract
Files, (h) the Limited Guarantee for the benefit of the Class B-2
Certificateholders, if any, (i) the obligations and related demand note of the
Company delivered pursuant to Section 3.06(c) and the related Staged-Funding
Contract Reserve Account, if any, (j) the Capitalized Interest Account and (k)
the Pre-Funding Account.
"Uncertificated Subsidiary Interests" means the Class A-S1, A-S2, A-S3,
A-S4, A-S5, M-S1, M-S2, B-S1 and B-S2 Interests, collectively.
"Undelivered Contract" means as of any date of determination an Initial or
Additional Contract identified, on the exception report attached to the
Acknowledgment delivered by the Trustee under Section 2.04, as a Land-and-Home
Contract as to which the Trustee did not receive the related Land-and-Home
Contract File as of the Closing Date and has not received the related
Land-and-Home Contract File and remitted payment to the Seller pursuant to
Section 8.07(d).
"Undelivered Contract Subaccount" means the subaccount so designated and
established and maintained pursuant to Section 8.07.
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"Underwriters" means Lehman Brothers, Inc., J.P. Morgan Securities, Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Prudential Securities
Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related Terms
Agreement, each dated as of January 19, 2000, among the Originator, the Seller
and the Underwriters.
"Unfunded Contract" has the meaning specified in Section 3.06(c).
"Unfunded Contract Shortfall" has the meaning specified in Section 3.06(c).
"Unpaid Class A Interest Shortfall" means, as to each class of Class A
Certificates and any Remittance Date, the amount, if any, of the Class A
Interest Shortfall applicable to such Class for the prior Remittance Date, plus
accrued interest (to the extent payment thereof is legally permissible) at the
related Remittance Rate on the amount thereof from such prior Remittance Date to
such current Remittance Date (calculated in the manner specified in Section
1.03).
"Unpaid Class A Principal Shortfall" means, as to each Class of Class A
Certificates and any Remittance Date, the amount, if any, by which the aggregate
of the Class A Principal Shortfalls for prior Remittance Dates is in excess of
the amounts distributed on prior Remittance Dates to Holders of Class A
Certificates pursuant to Section 8.03(a)(6)(ii).
"Unpaid Class B-1 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class B-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class B-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class B-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class B-1 Certificates on account of
any Unpaid Class B-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(9)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class B-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
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"Unpaid Class B-1 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class B-1 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class B-1 Certificates pursuant to Section
8.03(a)(9)(i).
"Unpaid Class B-2 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class B-2 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class B-2 Certificates pursuant to Section
8.03(a)(10)(iii), together with any Guarantee Payments allocable to principal.
"Unpaid Class B-3I Shortfall" means, as to any Remittance Date, the amount,
if any, by which the aggregate of the Class B-3I Shortfalls for prior Remittance
Dates is in excess of the amounts distributed on prior Remittance Dates to
Holders of Class B-3I Certificates pursuant to Section 8.03(a)(13) in respect of
any Unpaid Class B-3I Shortfall.
"Unpaid Class M-1 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class M-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, of the Class M-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-1 Certificates on account of
any Unpaid Class M-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(7)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-2 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-2 Certificates on account of
any Unpaid Class M-2 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(8)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-2
Remittance Rate on the amount specified in clause (i)
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from such prior Remittance Date to such current Remittance Date (calculated in
the manner specified in Section 1.03).
"Unpaid Class M-1 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class M-1 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class M-1 Certificates pursuant to Section
8.03(a)(7)(i).
"Unpaid Class M-2 Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class M-2 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class M-2 Certificates pursuant to Section
8.03(a)(8)(i).
"Unpaid Subsidiary Interest Shortfall" means, as to any Remittance Date and
any Class of Uncertificated Subsidiary Interests, the amount, if any, of the
Subsidiary Interest Shortfall for the prior Remittance Date with respect to such
Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Weighted Average Contract Rate on the amount
thereof from such prior Remittance Date to such current Remittance Date.
"Weighted Average Contract Rate" means, as to any Remittance Date, the
weighted average (determined by Scheduled Principal Balance) of the Contract
Rates of all Contracts that were outstanding during the prior related Due
Period.
SECTION 1.03. Calculations.
All calculations of the amount of interest accrued on the Certificates with
respect to any Remittance Date shall be calculated on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
SECTION 2.01. Closing.
a. There is hereby created, by the Seller as settlor, a separate trust
which shall be known as Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-1. By the execution and delivery of this
Agreement, the Seller has agreed that it will elect or will cause an election to
be made to treat the pool of assets comprising each of the Subsidiary REMIC and
the Master REMIC, excluding the Staged-Funding Contract Reserve Account, the
obligation and related demand note of the Originator pursuant to Section
3.06(c), the Capitalized Interest Account and the Pre-Funding Account, as a
REMIC. The Trust shall be administered pursuant to the provisions of this
Agreement for the benefit of the Certificateholders.
b. The Seller hereby transfers, assigns, delivers, sells, sets over and
otherwise conveys to the Trustee on behalf of the Trust, by execution of an
assignment substantially in the form of Exhibit D hereto, (1) all the right,
title and interest of the Seller in and to the Contracts, including, without
limitation, all right, title and interest in and to the Collateral Security, all
rights to receive payments on or with respect to the Contracts (other than the
principal and interest due on the Contracts on or before the applicable Cut-off
Date or Subsequent Cut-off Date) and all rights of the Seller under the Transfer
Agreement, (2) all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the creditor of such
Contract, (3) all rights under all FHA/VA Regulations pertaining to any Contract
that is an FHA/VA Contract, (4) the proceeds from the Errors and Omissions
Protection Policy and all rights under any blanket hazard insurance policy to
the extent they relate to the Manufactured Homes, (5) all documents contained in
the Contract Files and the Land-and-Home Contract Files, (6) $8,308,281.36 paid
by the underwriters of the Certificates to the Trustee by order of the Seller
out of the proceeds of the sale of the Certificates (which such underwriters
shall, by order of the Trust, remit directly to the Seller pursuant to Section
2.01(c)), (7) amounts on deposit in the Capitalized Interest Account, (8)
amounts on deposit in the Pre-Funding Account and (9) all proceeds and products
in any way derived from any of the foregoing.
c. The Seller hereby acknowledges receipt from the Trust of $8,308,281.36
paid to the Seller by the underwriters of the Certificates by order of the
Trust, equal to the difference between the aggregate Cut-off Date Principal
Balances of the Staged-Funding Contracts and the principal balance of the
Staged-Funding Contracts as of the Closing Date. The Seller agrees, in
consideration for such funds, that it will use its best efforts (consistent with
prudent lending practices) to cause each Staged-Funding Contract to be fully
disbursed on or before the Funding Termination Date. The additional payment
obligations of any Obligor attributable to any further disbursements on any
Staged-Funding Contract made on or before the Funding Termination Date shall
automatically become the property of the Trust, without further action by the
Seller or the Trust. The payment to the Seller by the Trust and the transfer of
additional obligations to the Trust pursuant to this Section 2.01(c) shall be a
purchase by the Trust of qualified mortgages pursuant to a fixed price contract
within the meaning of Section 860G(a)(3) of the Code.
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d. Although the parties intend that the conveyance of the Seller's right,
title and interest in and to the Contracts and the Collateral Security pursuant
to this Agreement and each Subsequent Transfer Instrument shall constitute a
purchase and sale and not a pledge of security for loans from the
Certificateholders, it is the intent of this Agreement that if such conveyances
are deemed to be a pledge of security for loans from the Certificateholders or
any other Persons (the "Secured Obligations"), the parties intend that the
rights and obligations of the parties to the Secured Obligations shall be
established pursuant to the terms of this Agreement. The parties also intend and
agree that the Seller shall be deemed to have granted to the Trustee, and the
Seller does hereby grant to the Trustee, a perfected first-priority security
interest in the items designated in Section 2.01(b)(1) through 2.01(b)(9) above
and in each Subsequent Transfer Instrument, and all proceeds thereof, to secure
the Secured Obligations, and that this Agreement shall constitute a security
agreement under applicable law. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person under any
Certificates or the Secured Obligations, the security interest created hereby
shall continue in full force and effect and the Trustee shall be deemed to be
the collateral agent for the benefit of such Person.
SECTION 2.02. Conditions to the Closing.
On or before the Closing Date, the Seller shall deliver or cause to be
delivered the following documents to the Trustee:
a. The List of Contracts identifying all Initial and Additional
Contracts, certified by the Chairman of the Board, President or any Vice
President of the Seller.
b. A certificate of an officer of each of the Originator and Seller
substantially in the form of Exhibit E hereto.
c. An Opinion of Counsel for each of the Originator and Seller
substantially in the form of Exhibit F hereto.
d. The Trustee's acknowledgment in the form of Exhibit G hereto.
e. A letter acceptable to the Underwriters from PricewaterhouseCoopers
LLP or another nationally recognized accounting firm, stating that such
firm has reviewed the Initial Contracts on a statistical sampling basis and
setting forth the results of such review.
f. Copies of resolutions of the board of directors of the Seller or of
the executive committee of the board of directors of the Seller approving
the execution, delivery and performance of this Agreement, the creation of
the Trust and the transactions contemplated hereunder, certified in each
case by the secretary or an assistant secretary of the Seller.
g. Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota.
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h. Evidence of filing with the Secretary of State of Minnesota of
UCC-1 financing statements, (i) executed by the Originator as debtor,
naming the Seller as secured party and listing the Contracts as collateral,
and (ii) executed by the Seller as debtor, naming the Trustee as secured
party and listing the Contracts as collateral.
i. The Land-and-Home Contract File for each Initial and Additional
Contract that is a Land-and-Home Contract.
j. An executed copy of the Assignment of the Seller substantially in
the form of Exhibit D hereto.
k. An Officer's Certificate listing the Servicer's Servicing Officers.
l. Evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy.
m. Evidence of deposit in the Certificate Account of all funds
received with respect to the Initial and Additional Contracts after the
Cut-off Date to the Closing Date, other than amounts due on or before the
Cut-off Date, together with an Officer's Certificate to the effect that
such amount is correct.
n. An Officer's Certificate confirming that the Originator's internal
audit department has reviewed the original or a copy of each Initial and
Additional Contract and each related Contract File or Land-and-Home
Contract File, as applicable, that each Initial and Additional Contract and
related Contract File or Land-and-Home Contract File, as applicable,
conforms in all material respects with the List of Contracts and that each
such Contract File or Land-and-Home Contract File, as applicable, is
complete in all material respects and that each Manufactured Home securing
a Contract is covered by a Hazard Insurance Policy as required by Section
3.02(f).
o. A letter from Moody's confirming that it has assigned the Class A
Certificates a rating of Aaa, the Class M-1 Certificates a rating of "Aa2",
the Class M-2 Certificates a rating of "A2," the Class B-1 Certificates a
rating of "Baa2" and the Class B-2 Certificates a rating of "Baa3."
p. A letter from Fitch confirming that it has assigned the Class A
Certificates a rating of AAA, the Class M-1 Certificates a rating of "AA,"
the Class M-2 Certificates a rating of "A", the Class B-1 Certificates a
rating of "BBB" and the Class B-2 Certificates a rating of "BBB+".
q. The demand note described in Section 3.06(c)(v).
r. An executed copy of the Transfer Agreement.
s. Evidence of the deposit of $2,100,000 in the Capitalized Interest
Account.
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t. Evidence of the deposit of $170,136,493.24 in the Pre-Funding
Account.
u. Evidence of the deposit in the Undelivered Contract Subaccount of
an amount equal to the difference between the aggregate Cut-off Date
Principal Balances of the Initial and Additional Contracts and the
aggregate Cut-off Date Principal Balances of the Undelivered Contracts.
v. Any other documents or certificates that the Trustee may reasonably
request.
SECTION 2.03. Conveyance of the Subsequent Contracts.
a. Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Contracts identified on the List of
Contracts attached to the Subsequent Transfer Instrument, including all rights
to receive payments on or with respect to the Subsequent Contracts due after the
related Subsequent Cut-off Date, and all items with respect to such Subsequent
Contracts in the related Contract Files and Land-and-Home Contract Files. The
transfer to the Trustee by the Seller of the Subsequent Contracts shall be
absolute and is intended by the Seller, the Trustee and the Certificateholders
to constitute and to be treated as a sale of the Subsequent Contracts by the
Seller to the Trust.
The purchase price paid by the Trustee shall be one hundred percent (100%)
of the aggregate Cut-off Date Principal Balances of such Subsequent Contracts.
The purchase price of Subsequent Contracts shall be paid solely with amounts in
the Pre-Funding Account. This Agreement shall constitute a fixed price contract
in accordance with Section 860G(a)(3)(A)(ii) of the Code.
b. The Seller shall transfer the Subsequent Contracts to the Trustee, and
the Trustee shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee with an Addition Notice
at least five Business Days prior to the Subsequent Transfer Date and shall
have provided any information reasonably requested by the Trustee with
respect to the Subsequent Contracts;
(ii) the Seller shall have delivered the related Land-and-Home
Contract File for each Subsequent Land-and-Home Contract to the Custodian
at least two Business Days prior to the Subsequent Transfer Date;
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(iii) the Seller shall have delivered to the Trustee a duly executed
Subsequent Transfer Instrument substantially in the form of Exhibit P,
which shall include a List of Contracts identifying the related Subsequent
Contracts;
(iv) as of each Subsequent Transfer Date, as evidenced by delivery of
the Subsequent Transfer Instrument, the Seller shall not be insolvent nor
shall it have been made insolvent by such transfer nor shall it be aware of
any pending insolvency;
(v) such sale and transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC and the Subsidiary
REMIC) or the Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an Officer's
Certificate, substantially in the form attached hereto as Exhibit Q,
confirming the satisfaction of each condition precedent and the
representations specified in this Section 2.03 and in Sections 3.01 and
3.03; and
(viii) the Seller and the Originator shall have delivered to the
Trustee Opinions of Counsel addressed to Fitch, Moody's and the Trustee
with respect to the transfer of the Subsequent Contracts substantially in
the form of the Opinions of Counsel delivered to the Trustee on the Closing
Date regarding certain bankruptcy, corporate and tax matters.
(ix) the Seller shall have delivered to the Trustee a copy of the
executed Subsequent Transfer Agreement between the Originator and the
Seller, substantially in the form of Exhibit A to the Transfer Agreement
and dated as of the Subsequent Transfer Date.
c. Before the last day of the Pre-Funding Period, the Seller shall deliver
to the Trustee:
(i) A letter from PricewaterhouseCoopers LLP or another nationally
recognized accounting firm retained by the Seller (with copies provided to
the Rating Agencies, the Underwriters and the Trustee) that is in form,
substance and methodology the same as that delivered under Section 2.02(e)
of this Agreement, except that it shall address the Subsequent Contracts
and their conformity in all material respects to the characteristics
described in Section 3.04(c) of this Agreement.
(ii) Evidence that as a result of the purchase by the Trust of the
Subsequent Contracts, the Class A Certificates shall not receive from
either of the Rating Agencies a lower credit rating than the rating
assigned to such Certificates as of the Closing Date.
(iii) Evidence that the aggregate Cut-off Date Principal Balance of
the Subsequent Contracts, not specifically identified as Subsequent
Contracts as of the Closing Date, does not exceed 25% of the Original
Principal Balance.
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SECTION 2.04. Acceptance by Trustee.
a. On the Closing Date and each Subsequent Transfer Date, if the conditions
set forth in Section 2.02 and 2.03, respectively, have been satisfied, the
Trustee shall deliver a certificate to the Seller substantially in the form of
Exhibit G hereto acknowledging conveyance of the Contracts, identified on the
applicable List of Contracts and the related Contract Files and Land-and-Home
Contract Files to the Trustee and declaring that the Trustee, directly or
through a custodian, will hold all Contracts that have been delivered in trust,
upon the terms herein set forth, for the use and benefit of all
Certificateholders and on the Closing Date the Trustee shall issue to or upon
the order of the Seller Certificates representing ownership of a beneficial
interest in 100% of the Trust.
b. If, in its review of the Land-and-Home Contract Files as described in
Exhibit G, the Trustee or its Custodian discovers a breach of the
representations or warranties set forth in Sections 2.02(n), 3.02, 3.03, 3.04 or
3.05, the Seller and the Originator shall cure such breach or repurchase or
replace such Contract pursuant to Section 3.06.
SECTION 2.05. REMIC Provisions.
a. The Originator, as Servicer, and the Class C Subsidiary
Certificateholder and the Class C Master Certificateholder, by acceptance
thereof, each agrees that, in accordance with the requirements of Section
860D(b)(1) of the Code, the federal tax return of each of the Subsidiary REMIC
and the Master REMIC for its first taxable year shall provide that the
Subsidiary REMIC or the Master REMIC, as the case may be (excluding the
Capitalized Interest Account, the obligation and related demand note of the
Originator pursuant to Section 3.06(c), the Staged- Funding Contract Reserve
Account and the Pre-Funding Account) elects to be treated as a REMIC for such
taxable year and all subsequent taxable years. In furtherance of the foregoing,
the Trustee (at the direction of the Originator, the Seller or the Servicer) and
the Originator, the Seller and the Servicer shall take, or refrain from taking,
all such action as is necessary to maintain the status of each of the Subsidiary
REMIC or the Master REMIC as a REMIC under the REMIC provisions of the Code,
including, but not limited to, the taking of such action as is necessary to cure
any inadvertent termination of REMIC status.
b. The Regular Certificates are being issued in ten classes and are hereby
designated by the Originator as constituting the "regular interests" in the
Master REMIC for the purposes of Section 860G(a)(1) of the Code. The following
terms of the Regular Certificates are irrevocably established as of the Closing
Date:
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Original Class
Pass-Through Principal
Class Rate Per Annum Balance Maturity Date
- ---------- -------------------- -------------- -------------------
Class A-1 6.84% $138,500,000 March 1, 2031
Class A-2 7.19% $ 40,000,000 March 1, 2031
Class A-3 7.30% $130,500,000 March 1, 2031
Class A-4 7.62% $125,000,000 March 1, 2031
Class A-5 8.06% $313,000,000 March 1, 2031
Class M-1 *8.30% $ 45,000,000 March 1, 2031
Class M-2 *9.08% $ 36,000,000 March 1, 2031
Class B-1 *8.80% $ 27,000,000 March 1, 2031
Class B-2 *8.80% $ 31,500,000 March 1, 2031
Class B-3I **
- ----------
* A floating rate (determined monthly on each Remittance Date) equal to the
Weighted Average Contract Rate, but in no event greater than the related
Remittance Rate specified above.
** The Class B-3I Certificates are interest-only Certificates entitled to the
payment of Excess Interest.
The Seller does not represent that any Class of Regular Certificates will, in
fact, mature on any given date. The Class C Master Certificates are being issued
in a single Class and are hereby designated by the Seller as constituting the
sole class of "residual interests" in the Master REMIC for purposes of Section
860G(a)(2) of the Code.
c. The Uncertificated Subsidiary Interests are being issued in nine classes
and are hereby designated by the Seller as constituting the "regular interests"
in the Subsidiary REMIC for the purposes of Section 860G(a)(1) of the Code. The
following terms of the Uncertificated Subsidiary Interests are irrevocably
established as of the Closing Date:
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Original
Subsidiary
Interest
Principal
Class Pass-Through Rate Per Annum Balance Maturity Date
- ----------- ----------------------------- ------------ --------------
Class A-S1 Weighted Average Contract Rate $138,500,000 March 1, 2031
Class A-S2 Weighted Average Contract Rate $ 40,000,000 March 1, 2031
Class A-S3 Weighted Average Contract Rate $130,500,000 March 1, 2031
Class A-S4 Weighted Average Contract Rate $125,000,000 March 1, 2031
Class A-S5 Weighted Average Contract Rate $313,000,000 March 1, 2031
Class M-S1 Weighted Average Contract Rate $ 45,000,000 March 1, 2031
Class M-S2 Weighted Average Contract Rate $ 36,000,000 March 1, 2031
Class B-S1 Weighted Average Contract Rate $ 27,000,000 March 1, 2031
Class B-S2 Weighted Average Contract Rate $ 31,500,000 March 1, 2031
The Seller does not represent that any Class of Uncertificated Subsidiary
Interests will, in fact, mature on any given date. The Class C Subsidiary
Certificates are being issued in a single Class and are hereby designated by the
Seller as constituting the sole class of "residual interests" in the Subsidiary
REMIC for purposes of Section 860G(a)(2) of the Code.
d. The Closing Date, which is the day on which each of the Subsidiary REMIC
and the Master REMIC will issue all of its regular and residual interests, is
hereby designated as the "startup day" of both the Subsidiary REMIC and the
Master REMIC within the meaning of Section 860G(a)(9) of the Code.
e. After the Closing Date, neither the Trustee, the Originator, the Seller
nor any Servicer shall (i) accept any contribution of assets to the Subsidiary
REMIC or the Master REMIC, (ii) dispose of any portion of the Subsidiary REMIC
or the Master REMIC, other than as provided in Sections 3.06, 3.07 and 8.05,
(iii) engage in any "prohibited transaction," as defined in Sections 860F(a)(2)
and (5) of the Code, except as may be contemplated by Section 3.06(c), (iv)
accept any contribution after the Closing Date that is subject to the tax
imposed by Section 860G(d) of the Code or (v) engage in any activity or enter
into any agreement that would result in the receipt by the Subsidiary REMIC or
the Master REMIC of any "net income from foreclosure property" as defined in
Section 860G(c)(2) of the Code, unless, prior to any such action set forth in
clauses (i), (ii), (iii), (iv) or (v) the Trustee shall have received an
unqualified Opinion of Counsel, which opinion shall not be an expense of the
Trust, stating that such action will not, directly or indirectly, (A) adversely
affect the status of the Subsidiary REMIC or the Master REMIC as a REMIC or the
status of the Uncertificated Subsidiary Interests as "regular interests" in the
Subsidiary REMIC, the status of the Class C Subsidiary Certificates as the sole
class of "residual interests" in the Subsidiary REMIC, the status of the Regular
Certificates as "regular interests" in the Master REMIC, or the status of the
Class C Master Certificates as the
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sole class of "residual interests" in the Master REMIC, (B) affect the
distributions payable hereunder to the Certificateholders or (C) result in the
imposition of any lien, charge or encumbrance upon the Subsidiary REMIC or the
Master REMIC.
f. Upon the acquisition of any real property (including interests in real
property), or any personal property incident thereto, in connection with the
default of a Contract, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Subsidiary REMIC or the Master REMIC of such property subsequent to the period
then permitted by the Code will not result in the imposition of any taxes on
"prohibited transactions" of the Subsidiary REMIC or the Master REMIC, as
defined in Section 860F of the Code, or cause the Subsidiary REMIC or the Master
REMIC to fail to qualify as a REMIC at any time that the Uncertificated
Subsidiary Interests, Class C Subsidiary Certificates, Regular Certificates or
Class C Master Certificates are outstanding. The Servicer shall manage,
conserve, protect and operate such real property, or any personal property
incident thereto, so that such property will not fail to qualify as "foreclosure
property," as defined in Section 860G(a)(8) of the Code, and that the
management, conservation, protection and operation of such property will not
result in the receipt by the Subsidiary REMIC or the Master REMIC of any "income
from nonpermitted assets," within the meaning of Section 860F(a)(2)(B) of the
Code.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Seller and Originator makes the following representations and
warranties on which the Trustee will rely in accepting the Contracts in trust
and issuing the Certificates on behalf of the Trust. The repurchase or
substitution obligation of the Originator set forth in Section 3.06 constitutes
the sole remedy available to the Trust or the Certificateholders for a breach of
a representation or warranty set forth in Section 2.02(n), 3.02, 3.03, 3.04 or
3.05 of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Seller.
The Seller represents and warrants to the Trustee and the
Certificateholders, effective on the Closing Date and each Subsequent Transfer
Date, that:
a. Organization and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Seller is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Seller.
b. Authorization; Binding Obligations. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and to create the Trust
and cause it to make, execute, deliver and perform its obligations under
this Agreement and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and to cause the
Trust to be created. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Seller
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
c. No Consent Required. The Seller is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
d. No Violations. The execution, delivery and performance of this
Agreement by the Seller will not violate any provision of any existing law
or regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of the Seller, or constitute a material breach of
any mortgage, indenture, contract or other agreement to which the Seller or
Originator is a party or by which the Seller may be bound.
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e. Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Seller have a material
adverse effect on the transactions contemplated by this Agreement.
f. Licensing. The Seller is duly registered as a finance company in
each state in which Contracts were originated, to the extent such
registration is required by applicable law.
SECTION 3.02. Representations and Warranties Regarding Each Contract.
The Originator has made the following representations and warranties to the
Seller in the Transfer Agreement, which representations and warranties the
Seller has assigned to the Trustee for the benefit of the Certificateholders, as
of the Closing Date with respect to each Initial and Additional Contract, and as
of the applicable Subsequent Transfer Date with respect to each Subsequent
Contract identified on the List of Contracts attached to the related Subsequent
Transfer Agreement:
a. List of Contracts. The information set forth in the applicable List
of Contracts is true and correct as of its date.
b. Payments. As of the Cut-off Date, the most recent scheduled payment
was made by or on behalf of the Obligor (without any advance from the
Originator or any Person acting at the request of the Originator) or was
not past due for more than 59 days (in the case of an Initial or Additional
Contract) or 30 days (in the case of a Subsequent Contract).
c. No Waivers. The terms of the Contract have not been waived, altered
or modified in any respect, except by instruments or documents identified
in the Contract File or Land-and-Home Contract File, as applicable.
d. Binding Obligation. The Contract is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with
its terms, except as such enforceability may be limited by laws affecting
the enforcement of creditors' rights generally.
e. No Defenses. The Contract is not subject to any right of
rescission, setoff, counterclaim or defense, including the defense of
usury, and the operation of any of the terms of the Contract or the
exercise of any right thereunder will not render the Contract unenforceable
in whole or in part or subject to any right of rescission, setoff,
counterclaim or defense, including the defense of usury, and no such right
of rescission, setoff, counterclaim or defense has been asserted with
respect thereto.
f. Insurance Coverage. The Manufactured Home securing the Contract is
covered by a Hazard Insurance Policy in the amount required by Section
5.09. Each
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Manufactured Home secured by an FHA/VA Contract which was, at the time of
origination of the related Contract, located within a federally designated
special flood hazard area is covered by insurance coverage at least equal
to that required by Section 5.09 or such lesser coverage as may be
available under the federal flood insurance program. With respect to any
other Contract that is not an FHA/VA Contract, the Company has obtained:
(a) a statement from the Obligor's insurance agent that the Manufactured
Home was, at the time of origination of the Contract, not in a federally
designated special flood hazard area; or (b) evidence that, at the time of
origination, flood insurance was in effect, which coverage is at least
equal to that required by Section 5.09 or such lesser coverage as may be
available under the federal flood insurance program. All premiums due as of
the Closing Date on such insurance have been paid in full.
g. Origination. The Contract was originated by a manufactured housing
dealer and purchased by the Originator, or originated by Conseco Finance
Corp. directly, in the regular course of its business.
h. Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Contract pursuant to this Agreement or pursuant to transfers of
Certificates, or the ownership of the Contract by the Trust, unlawful or
render the Contract unenforceable.
i. Compliance with Law. At the date of origination of the Contract,
all requirements of any federal and state laws, rules and regulations
applicable to the Contract, including, without limitation, usury, truth in
lending and equal credit opportunity laws, have been complied with, and the
Originator shall for at least the period of this Agreement, maintain in its
possession, available for the Trustee's inspection, and shall deliver to
the Trustee upon demand, evidence of compliance with all such requirements.
Such compliance is not affected by the Trust's ownership of the Contract.
j. Contract in Force. The Contract has not been satisfied or
subordinated in whole or in part or rescinded, and the Manufactured Home
securing the Contract has not been released from the lien of the Contract
in whole or in part.
k. Valid Security Interest. Each Contract (other than the
Land-and-Home Contracts) creates a valid and enforceable perfected first
priority security interest in favor of the Originator in the Manufactured
Home covered thereby as security for payment of the Cut-off Date Principal
Balance of such Contract. The Originator has assigned all of its right,
title and interest in such Contract, including the security interest in the
Manufactured Home covered thereby, to the Seller, and the Seller has
assigned all of its right, title and interest in such Contract, including
the security interest in the Manufactured Home covered thereby, to the
Trustee. The Trustee has and will have a valid and perfected and
enforceable first priority security interest in such Contract and
Manufactured Home.
Each Mortgage is a valid first lien in favor of the Seller on real
property securing the amount owed by the Obligor under the related
Land-and-Home Contract subject only
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to (a) the lien of current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the appraisal obtained in
connection with the origination of the related Land-and-Home Contract
obtained by the Seller and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by such Mortgage. The Seller has assigned
all of its right, title and interest in such Land-and-Home Contract and
related Mortgage, including the security interest in the Manufactured Home
covered thereby, to the Trustee. The Trustee has and will have a valid and
perfected and enforceable first priority security interest in such
Land-and-Home Contract.
l. Capacity of Parties. The signature(s) of the Obligor(s) on the
Contract are genuine and all parties to the Contract had full legal
capacity to execute the Contract.
m. Good Title. In the case of a Contract purchased from a manufactured
housing dealer, the Originator purchased the Contract for fair value and
took possession thereof in the ordinary course of its business, without
knowledge that the Contract was subject to a security interest. The
Originator has not sold, assigned or pledged the Contract to any person and
prior to the transfer of the Contract by the Originator to the Seller under
the terms of the Transfer Agreement, the Originator had good and marketable
title thereto free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest and was the sole owner thereof with full
right to transfer the Contract to the Seller. With respect to any Contract
bearing a stamp indicating that such Contract has been sold to another
party, such other party's interest in such Contract has been released.
n. No Defaults. As of the Cut-off Date or Subsequent Cut-off Date, as
applicable, there was no default, breach, violation or event permitting
acceleration existing under the Contract and no event which, with notice
and the expiration of any grace or cure period, would constitute such a
default, breach, violation or event permitting acceleration under such
Contract (except payment delinquencies permitted by clause (b) above). The
Company has not waived any such default, breach, violation or event
permitting acceleration except payment delinquencies permitted by clause
(b) above. As of the Closing Date or the Subsequent Transfer Date, as
applicable, the related Manufactured Home is, to the best of the Company's
knowledge, free of damage and in good repair. To the best of the
Originator's knowledge, no Manufactured Home has suffered damage that is
not covered by a Hazard Insurance Policy, including, but not limited to,
hurricanes, earthquakes, floods, tornadoes, straight-line winds, sinkholes,
mudslides, volcanic eruptions and other natural disasters.
o. No Liens. As of the Closing Date or the Subsequent Transfer Date,
as applicable, there are, to the best of the Originator's knowledge, no
liens or claims which have been filed for work, labor or materials
affecting the Manufactured Home or any
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related Mortgaged Property securing the Contract which are or may be liens
prior to, or equal or coordinate with, the lien of the Contract.
p. Equal Installments. Except for 360 Step-up Rate Contracts included
among the Initial Contracts and 241 Step-up Rate Contracts included among
the Additional Contracts, each Contract has a fixed Contract Rate and
provides for level monthly payments which fully amortize the loan over its
term. Of the Step-up Rate Contracts which are still bearing interest at
their initial Contract Rates, 588 provide for two rate increases and the
remainder provide for a single rate increase.
q. Enforceability. The Contract contains customary and enforceable
provisions so as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security provided thereby.
r. One Original. There is only one original executed Contract (other
than the original executed copy retained by the Obligor), which Contract
has been delivered to the Trustee or its custodian on or before the Closing
Date or the Subsequent Transfer Date, as applicable. Each Contract (other
than the Land-and-Home Contracts) has been stamped to reflect the
assignment of such Contract to the Trustee.
s. Loan-to-Value Ratio. At the time of their origination all of the
Contracts had Loan-to-Value Ratios not greater than 100%; if the related
Manufactured Home was new at the time such Contract was originated, the
original principal balance of such Contract did not exceed 130% of the
manufacturer's invoice price, plus 100% of the taxes and license fees, 130%
of the freight charges, 100% of the dealer's cost of additional
dealer-installed equipment (not to exceed 25% of the original principal
balance of such Contract in all states except California; not to exceed 70%
of the manufacturer's invoice price in California if required to meet park
requirements) and up to $1,500 of set-up costs per module.
t. Primary Resident. At the time of origination of the Contract the
Obligor was the primary resident of the related Manufactured Home.
u. Not Real Estate. With respect to each Contract other than a
Land-and- Home Contract, the related Manufactured Home is not considered or
classified as part of the real estate on which it is located under the laws
of the jurisdiction in which it is located.
v. Notation of Security Interest. With respect to each Contract other
than a Land-and-Home Contract, if the related Manufactured Home is located
in a state in which notation of a security interest on the title document
is required or permitted to perfect such security interest, the title
document shows, or if a new or replacement title document with respect to
such Manufactured Home is being applied for such title document will be
issued within 180 days and will show, the Originator or its assignee as the
holder of a first priority security interest in such Manufactured Home; if
the related Manufactured Home is located in a state in which the filing of
a financing statement under the UCC is required
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to perfect a security interest in manufactured housing, such filings or
recordings have been duly made and show the Originator or its assignee as
secured party. If the related Manufactured Home secures a Land-and-Home
Contract, such Manufactured Home is subject to a Mortgage properly filed in
the appropriate public recording office or such Mortgage will be properly
filed in the appropriate public recording office within 180 days, naming
the Seller as mortgagee. In either case, the Trustee has the same rights as
the secured party of record would have (if such secured party were still
the owner of the Contract) against all Persons (including the Seller and
the Originator and any trustee in bankruptcy of the Seller or the
Originator) claiming an interest in such Manufactured Home.
w. Secondary Mortgage Market Enhancement Act. The related Manufactured
Home is a "manufactured home" within the meaning of 42 United States Code,
Section 5402(6). Each manufactured housing dealer from whom the Originator
purchased such Contract, if any, was then approved by the Originator in
accordance with the requirements of the Secretary of Housing and Urban
Development set forth in 24 CFR ss. 201.27. At the origination of each
Contract, the Originator was approved for insurance by the Secretary of
Housing and Urban Development pursuant to Section 2 of the National Housing
Act.
x. Qualified Mortgage. The Contract represents a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code. The Originator
represents and warrants that, either as of the date of origination or the
Closing Date, the fair market value of the property securing each Contract
was not less than 80% of the "adjusted issue price" (within the meaning of
the REMIC Provisions) of such Contract.
SECTION 3.03. Additional Representations and Warranties. The Seller hereby
represents and warrants to the Trustee for the benefit of the
Certificateholders, as of the Closing Date with respect to each Initial and
Additional Contract and as of each Subsequent Transfer Date with respect to each
Subsequent Contract identified on the List of Contracts attached to the related
Subsequent Transfer Instrument:
a. Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Contract under this Agreement or pursuant to transfers of the
Certificates unlawful or render the Contract unenforceable. The Seller has
duly executed a valid blanket assignment of the Contracts transferred to
the Trust, and has transferred all its right, title and interest in such
Contracts. The blanket assignment, any and all documents executed and
delivered by the Seller pursuant to Sections 2.01(b) and 2.03(b), and this
Agreement each constitutes the legal, valid and binding obligation of the
Seller enforceable in accordance with its respective terms.
b. Good Title. The Seller is the sole owner of the Contract and has
the authority to sell, transfer and assign such Contract to the Trust under
the terms of this Agreement. There has been no assignment, sale or
hypothecation of the Contract by the Seller, which hypothecation terminates
upon sale of the Contract to the Trust. The Seller has good and marketable
title to the Contract, free and clear of any encumbrance, equity,
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loan, pledge, charge, claim, lien or encumbrance of any type and has full
right to transfer the Contract to the Trust.
SECTION 3.04. Representations and Warranties Regarding the Contracts in the
Aggregate.
The Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders, as of the Closing Date with
respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts, that:
a. Amounts. The aggregate principal amounts payable by Obligors under
the Contracts (assuming all Staged-Funding Contracts were fully disbursed)
as of the Cut-off Date equal the Cut-off Date Pool Principal Balance. The
aggregate principal amounts payable by Obligors under the Initial Contracts
(assuming all Staged-Funding Contracts included among the Initial Contracts
were fully disbursed) as of the Cut-off Date equal $472,151,596.42. The
aggregate principal amounts payable by Obligors under the Initial and
Additional Contracts (assuming all Staged-Funding Contracts included among
the Additional Contracts were fully disbursed) as of the Cut-off Date equal
$729,863,506.76.
b. Characteristics of Initial and Additional Contracts. The Initial
and Additional Contracts have the following characteristics as of the
Cut-off Date:
(i) the Obligors on not more than 10% of the Initial and
Additional Contracts by Cut-off Date Pool Principal Balance are
located in any one state, the Obligors on not more than 5% of the
Contracts by Cut-off Date Pool Principal Balance are located in an
area with the same zip code and the Obligors on not more than 1% of
the Contracts by Cut-off Date Pool Principal Balance are located in
California in an area with the same zip code;
(ii) no Initial or Additional Contract has a remaining maturity
of fewer than 4 months or more than 360 months;
(iii) the final scheduled payment date on the Initial or
Additional Contract with the latest maturity is in March 2030;
(iv) approximately 74% of the Initial and Additional Contracts by
Cut- off Date Pool Principal Balance is attributable to loans for
purchases of new Manufactured Homes and approximately 26% is
attributable to loans for purchases of used Manufactured Homes;
(v) no less than 40% of the Initial and Additional Contracts by
Cut-off Date Pool Principal Balance is attributable to Land-and-Home
Contracts;
(vi) the Weighted Average Contract Rate of the Initial and
Additional Contracts as of the Cut-off Date is at least 10.83% per
annum;
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(vii) at least 73% of the Initial and Additional Contracts by
Cut-off Date Pool Principal Balance is attributable to loans for the
purchase of multi-section Manufactured Homes;
(viii) the weighted average (by Cut-off Date Pool Principal
Balance) loan to value ratio of the Initial and Additional Contracts
is not more than 88%;
(ix) no Initial or Additional Contract was originated before
August 31, 1986; and
(x) not more than 26% of the Initial and Additional Contracts by
Cut- off Date Pool Principal Balance are secured by Manufactured Homes
located in a mobile home park.
c. Characteristics of All Contracts. The Contracts have the following
characteristics as of the end of the Pre-Funding Period:
(i) the Weighted Average Contract Rate is not less than 10.80%,
and not more than 54.31% of the Cut-off Date Pool Principal Balance is
attributable to Contracts with a Contract Rate of less than 10.80%;
(ii) the weighted average (by Cut-off Date Pool Principal
Balance) Loan-to-Value Ratio of the Contracts is not more than 89%;
(iii) not less than 72% of the Cut-off Date Pool Principal
Balance is attributable to loans for purchases of new Manufactured
Homes;
(iv) not more than 35% of the Cut-off Date Pool Principal Balance
is attributable to loans for the purchase of single-section
Manufactured Homes, and not less than 65% of the Cut-off Date Pool
Principal Balance is attributable to loans for the purchase of
double-section Manufactured Homes;
(v) not less than 29% of the Cut-off Date Pool Principal Balance
is attributable to Land-and-Home Contracts;
(vi) not more than 32% of the Cut-off Date Pool Principal Balance
is attributable to loans secured by Manufactured Homes located in
parks; and
(vii) the final scheduled payment date on the Contract with the
latest maturity is in not later than June 2030.
d. Staged-Funding Contracts. Approximately $ 220,042,341 of the
Initial and Additional Contracts, by Cut-off Date Principal Balance, are
Staged-Funding Contracts that had not been fully disbursed by the Cut-off
Date. Approximately $211,734,059.77 of such amount has been disbursed by
the Closing Date, and
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approximately $8,308,281.36 remains to be disbursed on or before the
Funding Termination Date.
e. Computer Tape. The Computer Tape made available by the Originator
was complete and accurate as of its date and includes a description of the
same Contracts that are described in the List of Contracts.
f. Marking Records. By the Closing Date or Subsequent Transfer Date,
as applicable, the Originator has caused the portions of the Electronic
Ledger relating to the Contracts to be clearly and unambiguously marked to
indicate that such Contracts constitute part of the Trust and are owned by
the Trust in accordance with the terms of the trust created hereunder.
g. No Adverse Selection. Except for the effect of the representations
and warranties made in Sections 3.02 and 3.03 hereof, no adverse selection
procedures have been employed in selecting the Contracts.
SECTION 3.05. Representations and Warranties Regarding the Contract Files.
The Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders, as of the Closing Date with
respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts, that:
a. Possession. Immediately prior to the Closing Date or the Subsequent
Transfer Date, as applicable, the Originator will have possession of each
original Contract and the related Contract File or Land-and-Home Contract
File and there are and there will be no custodial agreements in effect
materially and adversely affecting the rights of the Originator to make, or
cause to be made, any delivery required hereunder.
b. Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts and the Contract Files and Land-and-Home Contract Files by the
Originator pursuant to the Transfer Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.
SECTION 3.06. Repurchase of Contracts or Substitution of Contracts for
Breach of Representations and Warranties.
a. The Originator shall repurchase a Contract, at its Repurchase Price, not
later than the last day of the month prior to the month that is 90 days after
the day on which the Originator, the Servicer, the Seller or the Trustee first
discovers or should have discovered a breach of a representation or warranty of
the Originator set forth in Sections 2.02(n), 3.02, 3.03 or 3.05 of this
Agreement that materially adversely affects the Trust's or the
Certificateholders' interest in such Contract and which breach has not been
cured; provided, however, that (i) in the event that a party other than the
Originator first becomes aware of such breach, such discovering party shall
notify the Originator in writing within five Business Days of the date of such
discovery and
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(ii) with respect to any Contract incorrectly described on the List of Contracts
with respect to unpaid principal balance, which the Originator would otherwise
be required to repurchase pursuant to this Section, the Originator may, in lieu
of repurchasing such Contract, deliver to the Seller for deposit in the
Certificate Account no later than the first Determination Date that is 90 or
more days from the date of such discovery cash in an amount sufficient to cure
such deficiency or discrepancy. Any such cash so deposited shall be distributed
to Certificateholders on the immediately following Remittance Date as a
collection of principal or interest on such Contract, according to the nature of
the deficiency or discrepancy. Notwithstanding any other provision of this
Agreement, the obligation of the Originator under this Section shall not
terminate upon a Service Transfer pursuant to Article VII. Notwithstanding the
foregoing, the Originator shall repurchase any Land-and-Home Contract, at such
Contract's Repurchase Price, or substitute for it an Eligible Substitute
Contract as described in Section 3.06(b), if the Seller has failed to deliver
the related Land-and-Home Contract File to the Trustee within 30 days of the
Closing Date.
b. On or prior to the date that is the second anniversary of the Closing
Date, the Originator, at its election, may substitute one or more Eligible
Substitute Contracts for any Contracts that it is obligated to repurchase
pursuant to Section 3.06(a) (such Contracts being referred to as the "Replaced
Contracts") upon satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the Contracts to
be substituted for the Replaced Contracts and the Contract Files related to
such Contracts and the Originator shall have marked the Electronic Ledger
indicating that such Contracts constitute part of the Trust;
(ii) the Contracts to be substituted for the Replaced Contracts are
Eligible Substitute Contracts and the Originator delivers an Officers'
Certificate, substantially in the form of Exhibit L-2 hereto, to the
Trustee certifying that such Contracts are Eligible Substitute Contracts;
(iii) the Originator shall have delivered to the Seller evidence of
filing of a UCC-1 financing statement executed by the Originator as debtor,
naming the Seller as secured party and the Seller shall have delivered to
the Trustee evidence of filing of a UCC-1 financing statement executed by
the Seller as debtor, naming the Trustee as secured party and filed in
Minnesota, listing such Contracts as collateral, or shall have delivered to
the Seller or the Trustee, as the case may be, an amended List of
Contracts;
(iv) in respect of Eligible Substitute Contracts that are
Land-and-Home Contracts:
(x) the Originator shall have delivered to the Seller, or its
Custodian, the related Land-and-Home Contract Files; and
(y) if the sum of the aggregate principal balances of all
Land-and-Home Contracts then held by the Trustee (but excluding
those Land-and-Home Contracts, if any, that are to become
Replaced Contracts as a consequence of the substitution) and the
aggregate principal balances of all Land-and-
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Home Contracts that are included in the Eligible Substitute
Contracts equals or exceeds 10% of the Pool Scheduled Principal
Balance as of the Remittance Date immediately preceding the
substitution, the Originator shall have delivered to the Trustee
an opinion of counsel satisfactory to the Trustee to the effect
that the Trustee holds a perfected first priority lien in the
real estate securing such Eligible Substitute Contracts, or
evidence of recordation of the assignment to the Trustee on
behalf of the Trust of (A) each Mortgage securing such Eligible
Contracts or, if less (B) of the number of Mortgages securing
such Eligible Substitute Contracts needed to reduce the aggregate
principal balances of all Land-and-Home Contracts with respect to
which such assignments are not so recorded to less than 10% of
the Pool Scheduled Principal Balance as of the Remittance Date
immediately preceding the substitution;
(v) the Originator shall have delivered to the Trustee an Opinion of
Counsel (a) to the effect that the substitution of such Contracts for such
Replaced Contracts will not cause the Trust to fail to qualify as a REMIC
at any time under then applicable REMIC Provisions or cause any "prohibited
transaction" that will result in the imposition of a tax under such REMIC
Provisions and (b) to the effect of paragraph 9 of Exhibit F hereto; and
(vi) if the aggregate Scheduled Principal Balance of such Replaced
Contracts is greater than the aggregate Scheduled Principal Balance of the
Contracts being substituted, the Originator shall have delivered to the
Seller for deposit in the Certificate Account the amount of such excess and
shall have included in the Officers' Certificate required by clause (ii)
above a certification that such deposit has been made.
Upon satisfaction of such conditions, the Trustee shall add such Contracts
to, and delete such Replaced Contracts from, the List of Contracts. Such
substitution shall be effected prior to the first Determination Date that occurs
more than 90 days after the Originator becomes aware, or should have become
aware, or receives written notice from the Trustee, of the breach referred to in
Section 3.06(a). Promptly after any substitution of a Contract, the Originator
shall give written notice of such substitution to Fitch and Moody's.
c.(i) On or before the Funding Termination Date, the Originator or the
Seller shall deliver an Officer's Certificate to the Trustee, stating that
each Staged-Funding Contract was fully disbursed in accordance with the
terms of such Contract on or before the Funding Termination Date, or
specifying any Staged-Funding Contracts which were not fully disbursed by
the Funding Termination Date (each Staged-Funding Contract that was not so
fully disbursed being hereinafter referred to as an "Unfunded Contract"),
and the Cut-off Date Principal Balance of each Unfunded Contract.
(ii) On or before the Funding Termination Date, the Originator shall
either repurchase any Unfunded Contract in accordance with Section 3.06(a)
(or the unfunded portion thereof, by depositing in the Certificate Account
any undisbursed amount with respect to such Unfunded Contract), or shall
substitute an Eligible Substitute Contract for
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such Unfunded Contract in accordance with Section 3.06(b). With respect to
the repurchase of an Unfunded Contract pursuant to this Section 3.06(c), an
amount of the Repurchase Price equal to the Unfunded Contract Shortfall
attributable to such Unfunded Contract shall be treated as a refund to the
Trust of the purchase price paid by the Trust for additional obligations of
the Obligor on such Contract under Section 2.01(c), and the remainder of
the Repurchase Price shall be treated as paid to the Trust for such
Unfunded Contract.
(iii) If the Originator shall have failed to repurchase an Unfunded
Contract (or the unfunded portion thereof, by depositing in the Certificate
Account any undisbursed amount with respect to such Unfunded Contract) or
to substitute an Eligible Substitute Contract therefor in accordance with
subsection (ii) above, then the disbursed principal balance of such
Unfunded Contract as owned by the Trust shall not be increased after the
Funding Termination Date, notwithstanding any further disbursements that
may be made to the related Obligor by the Originator after the Funding
Termination Date. The Servicer shall thereafter allocate principal and
interest collected on the Contract between the Trust and the Originator on
a pro rata basis in accordance with the disbursed principal balance as of
the Funding Termination Date, with the result that payments of interest and
principal collected with respect to such disbursed principal balance as of
the Funding Termination Date shall be deemed collected by the Trust. The
aggregate differential between the Cut-off Date Principal Balance of all
such Unfunded Contracts as specified in the List of Contracts and the
disbursed principal balance of such Unfunded Contracts as of the Funding
Termination Date (the "Unfunded Contract Shortfall") shall be added to the
Formula Principal Distribution Amount with respect to the Remittance Date
in May 2000.
(iv) On the Business Day prior to each Remittance Date until and
including the Remittance Date immediately following the funding Termination
Date, the Originator shall pay any Class A Interest Shortfall, Class M-1
Interest Shortfall, Class M-2 Interest Shortfall or Class B-1 Interest
Shortfall occurring on such Remittance Date, if and to the extent such
shortfall is caused by the difference between (A) the interest that would
have been payable on all Staged-Funding Contracts in the related month had
such Contracts been fully disbursed on the Closing Date and (B) the
interest actually payable on such Contracts in the related month according
to the terms of such Contracts.
(v) To further evidence its obligation to repurchase Unfunded
Contracts pursuant to subsection (ii) above and to deposit any Class A
Interest Shortfall, Class M-1 Interest Shortfall, Class M-2 Interest
Shortfall and Class B-1 Interest Shortfall pursuant to subsection (iv)
above, the Originator shall deliver to the Trustee, on the Closing Date, a
demand note in an amount no less than the aggregate Cut-off Date Principal
Balances of the Staged-Funding Contracts. After the Funding Termination
Date or such earlier date on which the Originator either has fully
disbursed or repurchased each Staged-Funding Contract as required herein,
the Trustee shall return such demand note to the Originator for
cancellation and/or destruction.
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d. Upon receipt by the Trust by deposit in the Certificate Account of the
Repurchase Price under subsection (a) or (c) above, or the delivery of an
Eligible Substitute Contract pursuant to subsection (b) or (c) above, and upon
receipt of a certificate of a Servicing Officer in the form attached hereto as
Exhibit L-1 or L-2, the Trustee shall convey and assign to the Originator all of
the Trust's right, title and interest in the repurchased Contract or Replaced
Contract without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of the Trustee.
e. The Originator shall defend and indemnify the Trustee and the
Certificateholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out of
any claims which may be asserted against or incurred by any of them as a result
of any third-party action arising out of any breach of any such representation
and warranty.
SECTION 3.07. No Repurchase or Substitution Under Certain Circumstances.
Notwithstanding any provision of this Agreement to the contrary, no
repurchase or substitution pursuant to Section 3.06 (other than a repurchase or
substitution pursuant to Section 3.06(c)) shall be made unless the Originator
obtains for the Trustee an Opinion of Counsel addressed to the Trustee that any
such repurchase or substitution would not, under the REMIC Provisions, (i) cause
the Subsidiary REMIC or the Master REMIC to fail to qualify as a REMIC while any
regular interest in the Subsidiary REMIC or the Master REMIC, respectively, is
outstanding, (ii) result in a tax on prohibited transactions within the meaning
of Section 860F(a)(2) of the Code or (iii) constitute a contribution after the
startup day subject to tax under Section 860G(d) of the Code. The Servicer shall
attempt to obtain such Opinion of Counsel. In the case of a repurchase or
deposit pursuant to Section 3.06(a) or 3.06(c), the Originator shall,
notwithstanding the absence of such opinion as to the imposition of any tax as
the result of such purchase or deposit, repurchase such Contract or make such
deposit and shall guarantee the payment of such tax by paying to the Trustee the
amount of such tax not later than five Business Days before such tax shall be
due and payable to the extent that amounts previously paid over to and then held
by the Trustee pursuant to Section 6.06 hereof are insufficient to pay such tax
and all other taxes chargeable under Section 6.06. Pursuant to Section 6.06, the
Servicer is hereby directed to withhold, and shall withhold and pay over to the
Trustee, an amount sufficient to pay such tax and any other taxes imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or imposed on
"contributions after start up date" under Section 860G(d) of the Code from
amounts otherwise distributable to Class C Subsidiary Certificateholders. The
Servicer shall give notice to the Trustee at the time of such repurchase of the
amounts due from the Originator pursuant to the guarantee of the Originator
described above and notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
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In the event any tax that is guaranteed by the Originator pursuant to this
Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
SECTION 3.08. Staged-Funding Contract Reserve Account.
a. Within one Business Day after any date prior to the Funding Termination
Date on which the Originator's long-term debt securities are rated BB+ or lower
by Fitch and Ba1 or lower by Moody's (the "Ratings Adjustment Date"), the
Originator shall give written and telephonic notice thereof to the Trustee and
shall deposit with the Trustee an amount equal to the unfunded portion of the
Contracts that were Unfunded Contracts on the Ratings Adjustment Date. Upon
receipt of such notice the Trustee shall establish the Staged-Funding Contract
Reserve Account on behalf of the Trust, which must be an Eligible Account, and
shall deposit therein the amount received from the Originator pursuant to the
previous sentence. The Account shall be entitled "U.S. Bank National
Association, as Trustee for the benefit of holders of Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificates, Series 2000-1."
b. If the Originator fails to satisfy its obligations under Section
3.06(c)(ii) hereof the Trustee shall withdraw from the Staged-Funding Contract
Reserve Account that amount necessary to satisfy the Originator's obligations
under Section 3.06(c)(ii), and shall apply said funds in the fashion provided in
the second sentence in Section 3.06(c)(ii). Any amount so applied shall be
treated for all purposes under this Agreement as an amount paid by the
Originator to repurchase Contracts under Section 3.06(c).
c. The Staged-Funding Contract Reserve Account shall be part of the Trust
but not part of the Subsidiary REMIC or Master REMIC. The Trustee on behalf of
the Trust shall be the legal owner of the Staged-Funding Contract Reserve
Account. The Originator shall be the beneficial owner of the Staged-Funding
Contract Reserve Account, subject to the foregoing power of the Trustee to apply
amounts in the Staged-Funding Contract Reserve Account to satisfy the
obligations of the Originator under Section 3.06(c)(ii). Funds in the
Staged-Funding Contract Reserve Account shall, at the direction of the
Originator, be invested in Eligible Investments that mature no later than the
Funding Termination Date. All net income and gain from such investments shall be
distributed to the Originator on the Funding Termination Date. Any losses on
such investments shall be deposited in the Staged-Funding Contract Reserve
Account by the Originator out of its own funds immediately as realized. All
amounts earned on amounts on deposit in the Staged-Funding Contract Reserve
Account shall be taxable to the Originator.
d. Any funds remaining in the Staged-Funding Contract Reserve Account after
the Funding Termination Date shall be distributed to the Originator.
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ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01. Custody of Contracts.
a. Subject to the terms and conditions of this Section the Trustee appoints
the Servicer to maintain custody of the Contract Files for the benefit of the
Certificateholders and the Trustee. The Custodian shall maintain custody of the
Land-and-Home Contract Files. In the event that the Trustee is no longer acting
as Custodian of the Land-and-Home Contract Files, upon execution and delivery of
an agreement between the Trustee and the Person assuming the duties of the
Trustee hereunder as Custodian with respect to the Land-and-Home Contract Files,
the replacement Custodian shall concurrently execute an acknowledgment of
receipt of the Land- and-Home Contract Files substantially in the form of
Exhibit H hereto.
b. The Servicer agrees to maintain the related Contract Files at its office
where they are currently maintained, or at such other offices of the Servicer in
the State of Minnesota as shall from time to time be identified to the Trustee
by written notice. The 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, conduct annual physical inspections
of Contract Files held by it under this Agreement and certify to the
Trustee annually that it continues to maintain possession of such Contract
Files;
(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
(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. 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
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liabilities, obligations, losses, damages, payments, costs or expenses of any
kind whatsoever which may be imposed on, incurred or asserted against the
Certificateholders and the Trustee as the result of any act or omission by the
Servicer relating to the maintenance and custody of the Contract Files;
provided, however, that the Servicer will not be liable for any portion of any
such amount resulting from the negligence or willful misconduct of any
Certificateholder or the Trustee.
SECTION 4.02. Filings.
On or prior to the Closing Date, the Originator shall cause the UCC-1
financing statement referred to in Section 2.02(h) to be filed. Trustee shall
cause to be filed all necessary continuation statements of the UCC-1 financing
statement. From time to time the Servicer shall take and cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Certificateholders' interest in the Contracts and their proceeds and the
Manufactured Homes against all other persons, including, without limitation, the
filing of financing statements, amendments thereto and continuation statements,
the execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title. The Servicer will maintain the
Trustee's first priority perfected security interest in each Manufactured Home
and a first lien on each Mortgaged Property so long as the related Contract is
property of the Trust.
SECTION 4.03. Name Change or Relocation.
a. During the term of this Agreement, the Originator shall not change its
name, identity or structure or relocate its chief executive office without first
giving notice thereof to the Seller, the Trustee and the Servicer. In addition,
following any such change in the name, identity, structure or location of the
chief executive office of the Originator, the Originator shall give written
notice of any such change to Fitch and Moody's.
b. If any change in the Originator's name, identity or structure or the
relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute or would cause any such financing or continuation statement or notice of
lien to become unperfected (whether immediately or with lapse of time), the
Originator, no later than five days after the effective date of such change,
shall file, or cause to be filed, such amendments or financing statements as may
be required to preserve, perfect and protect the Certificateholders' interest in
the Contracts and proceeds thereof and in the Manufactured Homes.
SECTION 4.04. Chief Executive Office.
During the term of this Agreement, the Originator will maintain its chief
executive office in one of the States of the United States, except Tennessee.
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SECTION 4.05. Costs and Expenses.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Certificateholders' right, title and interest in and to
the Contracts (including, without limitation, the security interests in the
Manufactured Homes granted thereby).
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ARTICLE V
SERVICING OF CONTRACTS
SECTION 5.01. Responsibility for Contract Administration.
The Servicer will have the sole obligation to manage, administer, service
and make collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor. Conseco Finance Corp., if it is the Servicer, may delegate some or all
of its servicing duties to a wholly owned subsidiary of Conseco Finance Corp.,
for so long as such subsidiary remains, directly or indirectly, a wholly owned
subsidiary of Conseco Finance Corp. Notwithstanding any such delegation Conseco
Finance Corp. shall retain all of the rights and obligations of the Servicer
hereunder. The Trustee, at the request of a Servicing Officer, shall furnish the
Servicer with any powers of attorney or other documents necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder. Conseco Finance Corp. is hereby appointed the Servicer until such
time as any Service Transfer shall be effected under Article VII.
SECTION 5.02. Standard of Care.
In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise that degree of
skill and care consistent with the highest degree of skill and care that the
Servicer exercises with respect to similar contracts serviced by the Servicer;
provided, however, that (i) such degree of skill and care shall be at least as
favorable as the degree of skill and care generally applied by servicers of
manufactured housing installment sales contracts for institutional investors and
(ii) notwithstanding the foregoing, the Servicer shall not release or waive the
right to collect the unpaid balance on any Contract. The Servicer shall comply
with FHA/VA Regulations in servicing any FHA/VA Contracts (and will pay any
required premiums) so that the related insurance of the Federal Housing
Administration or partial guarantee of the Veterans Administration remains in
full force and effect, except for good faith disputes relating to FHA/VA
Regulations that will not cause the termination or reduction of such insurance
or guarantee.
SECTION 5.03. Records.
The Servicer shall, during the period it is servicer hereunder, maintain
such books of account and other records as will enable the Trustee to determine
the status of each Contract.
SECTION 5.04. Inspection; Computer Tape.
a. At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records, which have not previously been provided to the Trust,
relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Trustee or its authorized agents. The
examination referred to in this Section will be conducted in a manner which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations.
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Without otherwise limiting the scope of the examination the Trustee may make,
the Trustee may, using generally accepted audit procedures, verify the status of
each Contract and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article VI and compliance
with the standards represented to exist as to each Contract in this Agreement.
b. At all times during the term hereof, the Servicer shall keep available a
copy of the List of Contracts at its principal executive office for inspection
by Certificateholders.
c. On or before the ninth Business Day of each related Due Period, the
Servicer will provide to the Trustee a Computer Tape setting forth a list of all
the outstanding Contracts and the outstanding principal balance of each such
Contract as of the end of the next related Due Period.
SECTION 5.05. Certificate Account.
a. On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which must be an Eligible Account.
The Certificate Account shall be entitled "U.S. Bank National Association as
Trustee for the benefit of holders of Manufactured Housing Contract Pass-Through
Certificates, Series 2000-1 (Conseco Finance Corp., Servicer)." The Servicer
shall pay into the Certificate Account as promptly as practicable (not later
than the next Business Day) following receipt thereof all payments from Obligors
and Net Liquidation Proceeds, other than late payment penalty fees, extension
fees and assumption fees, which shall be retained by the Servicer as additional
compensation for servicing the Contracts. All amounts paid into the Certificate
Account under this Agreement shall be held in trust for the Trustee and the
Certificateholders until payment of any such amounts is authorized under this
Agreement. Only the Trustee may withdraw funds from the Certificate Account.
b. If the Servicer so directs, the institution maintaining the Certificate
Account shall, in the name of the Trustee in its capacity as such, invest the
amounts in the Certificate Account in Eligible Investments that mature not later
than one Business Day prior to the next succeeding Remittance Date. Once such
funds are invested, such institution shall not change the investment of such
funds. All income and gain from such investments shall be added to the
Certificate Account and distributed on such Remittance Date pursuant to Section
8.03(a). An amount equal to any net loss on such investments shall be deposited
in the Certificate Account by the Class C Subsidiary Certificateholder out of
its own funds immediately as realized. The Servicer and the Trustee shall in no
way be liable for losses on amounts invested in accordance with the provisions
hereof. Funds in the Certificate Account not so invested must be insured to the
extent permitted by law by the Federal Deposit Insurance Corporation. "Eligible
Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America and which are
noncallable;
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(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustee or any Affiliate of the
Trustee, acting in its commercial capacity) incorporated under the laws of
the United States of America or any State thereof and subject to
supervision and examination by federal and/or state authorities, so long
as, at the time of such investment or contractual commitment providing for
such investment, the commercial paper or other short-term deposits of such
depository institution or trust company (or, in the case of a depository
institution which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt obligations of such holding
company) are rated at least P-1 by Moody's, at least A-1 by Standard &
Poor's and at least F-1 by Fitch (if rated by Fitch) and (B) any other
demand or time deposit or certificate of deposit which is fully insured by
the Federal Deposit Insurance Corporation;
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act
of 1933 and have the highest credit rating then available from Moody's and
Fitch (if rated by Fitch) and are rated AAAm or AAAm-G by Standard & Poor's
and whose only investments are in securities described in clauses (i), (ii)
above and (iv) below;
(iv) repurchase obligations with respect to (A) any security described
in clause (i) above or (B) any other security issued or guaranteed by an
agency or instrumentality of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a credit rating of at least Aa2 from Moody's,
at least AAA by Standard & Poor's and in one of the two highest rating
categories from Fitch (if rated by Fitch) at the time of such investment;
provided, however, that securities issued by any particular corporation
will not be Eligible Investments to the extent that investment therein will
cause the then outstanding principal amount of securities issued by such
corporation and held as part of the corpus of the Trust to exceed 10% of
amounts held in the Certificate Account;
(vi) commercial paper having a rating of at least A-1+ from Standard &
Poor's and at least P-1 from Moody's (if rated by Moody's) at the time of
such investment or pledge as a security; and
(vii) other obligations or securities that are acceptable to both
Moody's and Standard & Poor's as an Eligible Investment hereunder and will
not reduce the rating assigned to any Class of Certificates by either
Moody's or Fitch below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by either Moody's or
Fitch, as evidenced in writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
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Notwithstanding the foregoing, securities that represent the right to receive
payments only of interest due on underlying obligations shall not be included as
Eligible Investments, whether or not such securities otherwise fall within (i)
through (vii) above.
The Trustee may trade with itself or an Affiliate in the purchase or sale of
such Eligible Investments.
The Originator, the Servicer and the Seller acknowledge that to the extent
regulations of the Comptroller of the Currency or other applicable regulatory
agency grant the Originator, Seller or Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Originator, the Seller
and the Servicer specifically waive receipt of such confirmations.
c. If at any time the Trustee receives notice (from Fitch, Moody's or the
Servicer or otherwise) that the Certificate Account has ceased to be an Eligible
Account, the Trustee must, as soon as practicable but in no event later than 5
Business Days of the Trustee's receipt of such notice, transfer the Certificate
Account and all funds and Eligible Investments therein to an Eligible Account.
Following any such transfer, the Trustee must notify each of Fitch, Moody's and
the Servicer of the location of the Certificate Account.
SECTION 5.06. Enforcement.
a. The Servicer shall, consistent with customary servicing procedures and
the terms of this Agreement, act with respect to the Contracts in such manner as
will maximize the receipt of principal and interest on such Contracts and
Liquidation Proceeds with respect to Liquidated Contracts.
b. The Servicer may sue to enforce or collect upon Contracts, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to commence
a legal proceeding to enforce a Contract, the act of commencement shall be
deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Trustee on behalf of the Trust shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Contract,
including bringing suit in its name or the names of the Certificateholders.
c. The Servicer shall exercise any rights of recourse against third persons
that exist with respect to any Contract in accordance with the Servicer's usual
practice. In exercising recourse rights, the Servicer is authorized on the
Trustee's behalf to reassign the Contract or to resell the related Manufactured
Home to the person against whom recourse exists at the price set forth in the
document creating the recourse.
d. So long as Conseco Finance Corp. is the Servicer, the Servicer may grant
to the Obligor on any Contract any rebate, refund or adjustment out of the
Certificate Account that the Servicer in good faith believes is required because
of prepayment in full of the Contract. The Servicer will not permit any
rescission or cancellation of any Contract.
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e. So long as Conseco Finance Corp. is the Servicer, the Servicer may,
consistent with its customary servicing procedures and consistent with Section
5.02, grant to the Obligor on any Contract an extension of payments due under
such Contract, provided that Obligors may not be solicited for extensions, no
such extension may extend beyond the final scheduled payment date of the
Contract with the latest maturity, as specified in Section 3.04(c), and no more
than one extension of payments under a Contract may be granted in any
twelve-month period.
f. The Servicer may enforce any due-on-sale clause in a Contract if such
enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Contract is permitted by the Servicer
upon conveyance of the related Manufactured Home, the Servicer shall use its
best efforts to obtain an assumption agreement in connection therewith and add
such assumption agreement to the related Contract File or Land-and-Home Contract
File.
g. Any provision of this Agreement to the contrary notwithstanding, the
Servicer shall not agree to the modification or waiver of any provision of a
Contract if such modification or waiver would be treated as a taxable exchange
under the REMIC Provisions.
SECTION 5.07. Trustee to Cooperate.
a. Upon payment in full on any Contract, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the Servicer)
on the next succeeding Remittance Date by certification of a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received in connection with such payments which are required to be deposited in
the Certificate Account pursuant to Section 5.05 have been so deposited). The
Servicer is authorized to execute an instrument in satisfaction of such Contract
and to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the lien on the
related real estate. The Servicer shall determine when a Contract has been paid
in full; to the extent that insufficient payments are received on a Contract
credited by the Servicer as prepaid or paid in full and satisfied, the shortfall
shall be paid by the Servicer out of its own funds.
b. From time to time as appropriate for servicing and foreclosure in
connection with any Land-and-Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt signed
by such Servicing Officer, cause the original Land-and- Home Contract and the
related Land-and-Home Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such
Land-and-Home Contract to be released to the Servicer with a notation that the
Land-and-Home Contract has been assigned to the Trustee. Upon request of a
Servicing Officer, the Trustee shall perform such other acts as reasonably
requested by the Servicer and otherwise cooperate with the Servicer in
enforcement of the Certificateholders' and Class C Certificateholders' rights
and remedies with respect to Contracts.
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c. The Servicer's receipt of a Land-and-Home Contract and/or Land-and-Home
Contract File shall obligate the Servicer to return the original Land-and-Home
Contract and the related Land-and-Home Contract File to the Trustee when its
need by the Servicer has ceased unless the Contract shall be liquidated or
repurchased or replaced as described in Section 3.06.
SECTION 5.08. Costs and Expenses.
All costs and expenses incurred by the Servicer in carrying out its duties
hereunder, including all fees and expenses incurred in connection with the
enforcement of Contracts (including enforcement of defaulted Contracts and
repossessions of Manufactured Homes securing such Contracts) shall be paid by
the Servicer and the Servicer shall not be entitled to reimbursement hereunder,
except that the Servicer shall be reimbursed out of the Liquidation Proceeds of
a Liquidated Contract for Liquidation Expenses incurred by it. The Servicer
shall not incur such Liquidation Expenses unless it determines in its good faith
business judgment that incurring such expenses will increase the Net Liquidation
Proceeds on the related Contract.
SECTION 5.09. Maintenance of Insurance.
a. Except as otherwise provided in subsection (b) of this Section 5.09, the
Servicer shall cause to be maintained with respect to each Contract one or more
Hazard Insurance Policies which provide, at a minimum, the same coverage as a
standard form fire and extended coverage insurance policy that is customary for
manufactured housing, issued by a company authorized to issue such policies in
the state in which the related Manufactured Home is located and in an amount
which is not less than the maximum insurable value of such Manufactured Home or
the principal balance due from the Obligor on the related Contract, whichever is
less; provided, however, that the amount of coverage provided by each Hazard
Insurance Policy shall be sufficient to avoid the application of any
co-insurance clause contained therein; and provided, further, that such Hazard
Insurance Policies may provide for customary deductible amounts. With respect
to: (a) a Manufactured Home securing an FHA/VA Contract, if such Manufactured
Home's location was, at the time of origination of the related FHA/VA Contract,
within a federally designated special flood hazard area, the Servicer shall also
cause such flood insurance to be maintained, which coverage shall be at least
equal to the minimum amount specified in the preceding sentence or such lesser
amount as may be available under the federal flood insurance program; and (b)
any Contract that is not an FHA/VA Contract, the Originator shall obtain (i) a
statement from the Obligor's insurance agent that the Manufactured Home was, at
the time of origination of the Contract, not in a federally designated special
flood hazard area, or (ii) evidence that, at the time of origination, flood
insurance was in effect, which coverage was at least equal to the minimum amount
specified in the preceding sentence or such lesser amount as may be available
under the federal flood insurance program. Each Hazard Insurance Policy caused
to be maintained by the Servicer shall contain a standard loss payee clause in
favor of the Servicer and its successors and assigns. If any Obligor is in
default in the payment of premiums on its Hazard Insurance Policy or Policies,
the Servicer shall pay such premiums out of its own funds and may separately add
such premium to the Obligor's obligation as provided by the Contract, but shall
not add such premium to the remaining principal balance of the Contract.
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b. The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 5.09, and shall, to the extent that the related
Contract does not require the Obligor to maintain a Hazard Insurance Policy with
respect to the related Manufactured Home, maintain one or more blanket insurance
policies covering losses on the Obligor's interest in the Contracts resulting
from the absence or insufficiency of individual Hazard Insurance Policies. Any
such blanket policy shall be substantially in the form and in the amount carried
by the Servicer as of the date of this Agreement. The Servicer shall pay the
premium for such policy on the basis described therein and shall deposit into
the Certificate Account from its own funds any deductible amount with respect to
claims under such blanket insurance policy relating to the Contracts. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to claims under individual Hazard Insurance Policies maintained pursuant
to subsection (a) of this Section. If the insurer under such blanket insurance
policy shall cease to be acceptable to the Servicer, the Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy.
c. With respect to each Manufactured Home that has been repossessed in
connection with a defaulted Contract, the Servicer shall either (i) maintain one
or more Hazard Insurance Policies thereon or (ii) self-insure such Manufactured
Homes and deposit into the Certificate Account from its own funds any losses
caused by damage to such Manufactured Home that would have been covered by a
Hazard Insurance Policy.
d. The Servicer shall keep in force throughout the term of this Agreement
(i) a policy or policies of insurance covering errors and omissions for failure
to maintain insurance as required by this Agreement and (ii) a fidelity bond.
Such policy or policies and such fidelity bond shall be in such form and amount
as is generally customary among Persons which service a portfolio of
manufactured housing installment sales contracts and installment loan agreements
having an aggregate principal amount of $100,000,000 or more and which are
generally regarded as servicers acceptable to institutional investors.
SECTION 5.10. Repossession.
Notwithstanding the standard of care specified in Section 5.02, the
Servicer shall commence procedures for the repossession of any Manufactured Home
or the foreclosure upon any Mortgaged Property or take such other steps that in
the Servicer's reasonable judgment will maximize the receipt of principal and
interest or Net Liquidation Proceeds with respect to the Contract secured by
such Manufactured Home or Mortgaged Property (which may include retitling or
filing a recorded assignment of the Mortgage) subject to the requirements of the
applicable state and federal law, no later than five Business Days after the
time when such Contract becomes a Defaulted Contract; provided that if the
Servicer has actual knowledge that a Mortgaged Property is affected by hazardous
waste, then the Servicer shall not cause the Trustee to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. For purposes of the
proviso in the preceding sentence, the Servicer shall not be deemed to have
actual knowledge that a Mortgaged Property is affected by hazardous waste unless
it shall have received written notice that hazardous waste is present on such
property and such written notice has been made a part of the Land-and-Home
Contract File with respect to the related Contract. In
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connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be consistent with Section 5.02. In the event that title to any Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed
or certificate of sale shall be issued to the Trustee, as Trustee, or, at its
election, to its nominee on behalf of the Trustee, as Trustee.
SECTION 5.11. Commingling of Funds.
So long as Conseco Finance Corp. is the Servicer, any collections in
respect of Contracts collected by Conseco Finance Corp. shall, prior to the
deposit thereof in the Certificate Account, be held in bank accounts entitled
substantially as follows: "[name of depository], as agent for U.S. Bank National
Association as Trustee, other trustees, and Conseco Finance Corp., as their
interests may appear."
SECTION 5.12. Retitling; Security Interests.
a. If, at any time, a Service Transfer has occurred and Conseco Finance
Corp. is no longer the Servicer and the new Servicer is unable to foreclose upon
a Manufactured Home because the title document for such Manufactured Home does
not show such Servicer or the Trustee as the holder of the first priority
security interest in the Manufactured Home, such Servicer shall take all
necessary steps to apply for a replacement title document showing it or the
Trustee as the secured party.
b. In order to facilitate the Servicer's actions, as described in
subsection (a) of this section, Conseco Finance Corp. will provide the Servicer
with any necessary power of attorney permitting it to retitle the Manufactured
Home.
c. If the Servicer is still unable to retitle the Manufactured Home,
Conseco Finance Corp. will take all actions necessary to act with the Servicer
to foreclose upon the Manufactured Home, including, as appropriate, the filing
of any UCC-1 or UCC-2 financing statements necessary to perfect the security
interest in any Manufactured Home that constitutes a fixture under the laws of
the jurisdiction in which it is located and all actions necessary to perfect the
security interest in any Manufactured Home that is considered or classified as
part of the real estate on which it is located under the laws of the
jurisdiction in which it is located.
d. If the aggregate Cut-off Date Principal Balances of all Land-and-Home
Contracts equals or exceeds 10% of the Cut-off Date Pool Principal Balance, the
Originator shall (i) within 60 days of the Post-Funding Remittance Date (or the
Closing Date if the Pre-Funded Amount on the Closing Date is less than $10,000)
submit to the appropriate recording offices the assignments to the Trustee on
behalf of the Trust of the number of Mortgages securing Land-and-Home Contracts
needed to reduce the aggregate Cut-off Date Principal Balances of all Land-and-
Home Contracts with respect to which such assignments are not so recorded to
less than 10% of the Cut-off Date Pool Principal Balance or (ii) on the
Post-Funding Remittance Date (or the Closing Date if the Pre-Funded Amount on
the Closing Date is less than $10,000), deliver an Opinion of Counsel
satisfactory to the Trustee to the effect that the Trustee holds a perfected
first priority lien in the real estate securing the Land-and-Home Contracts,
with the exception of real
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estate located in such states as may be identified in such Opinion of Counsel,
provided that the Land-and-Home Contracts secured by real estate located in such
identified states does not exceed 10% of the Cut-off Date Pool Principal Balance
as of the Post-Funding Remittance Date, or Closing Date, as applicable.
If at any time during the term of this Agreement, the Trustee receives
written notice from the Originator or the Servicer that the Originator does not
have a long-term senior debt rating from Moody's of Baa3 or higher, from Fitch
of BBB- or higher and from Standard & Poor's of BBB- or higher, or if the
Trustee otherwise becomes aware of the same, the Trustee, at the Originator's
expense, shall file promptly in the appropriate recording offices the
assignments to the Trustee on behalf of the Trust of each Mortgage securing a
Land-and-Home Contract, unless the Originator obtains confirmation from both
Fitch and Moody's that failure to file such assignments will not result in Fitch
or Moody's (as applicable) lowering, withdrawing or qualifying its rating of any
Class of Certificates.
SECTION 5.13. Covenants, Representations and Warranties of Servicer. By its
execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Trust relies in accepting
the Contracts and issuing the Certificates.
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Servicer is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Servicer.
(b) Authorization; Binding Obligations. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.
(c) No Consent Required. The Servicer is not required to obtain the consent
of any other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses, approvals
and authorizations as have been obtained.
(d) No Violations. The execution, delivery and performance by the Servicer
of this Agreement and the fulfillment of its terms will not violate any
provision of any existing law or
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regulation or any order or decree of any court or the related Certificate of
Incorporation or Bylaws of the Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Servicer is a
party or by which the Servicer may be bound.
(e) Litigation. No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Servicer threatened, against the Servicer or any of its properties or
with respect to this Agreement or the Certificates which, if adversely
determined, would in the opinion of the Servicer have a material adverse effect
on the transactions contemplated by this Agreement.
(f) Chief Executive Office. The chief executive office of the Servicer is
at 1100 Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639.
(g) No Default. The Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default would materially and adversely
affect its condition (financial or other) or operations or its properties or the
consequences of which would materially and adversely affect its performance
hereunder. The Servicer is not in default under any agreement involving
financial obligations or on any outstanding obligation which would materially
adversely impact its financial condition or operations or legal documents
associated with the transaction contemplated by this Agreement.
(h) No Impairment. The Servicer shall do nothing to impair the rights of
the Trust, or the Certificateholders in the Certificates.
(i) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Contract, except in accordance with Section 5.06.
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ARTICLE VI
REPORTS AND TAX MATTERS
SECTION 6.01. Monthly Reports.
a. No later than 1:00 p.m. on each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent, the Company (if the Company is not the
Servicer) and the Rating Agencies a "Monthly Report," substantially in the form
of Exhibit N hereto.
b. If the applicable Monthly Report indicates that there is a Class M-1
Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a
Class B-1 Interest Deficiency Amount, the Servicer shall promptly notify the
Trustee, by telephone, of the aggregate amount of such Class M-1 Interest
Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1 Interest
Deficiency Amount. On the day one Business Day prior to the related Remittance
Date, the Trustee shall determine the total amount of funds in the Certificate
Account available to pay such deficiency in accordance with Section 8.03(b) and
shall promptly notify the Servicer of such amount. If the total amount of funds
in the Certificate Account is not sufficient to pay the deficiency, the Trustee
shall promptly notify the Servicer, and shall reflect such deficiency in the
reports delivered to Certificateholders pursuant to Section 6.05.
SECTION 6.02. Certificate of Servicing Officer.
Each Monthly Report pursuant to Section 6.01 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit I,
certifying the accuracy of the Monthly Report and that no Event of Termination
or event that with notice or lapse of time or both would become an Event of
Termination has occurred, or if such event has occurred and is continuing,
specifying the event and its status.
SECTION 6.03. Other Data.
In addition, the Originator and (if different from the Originator) the
Servicer shall, on request of the Trustee, Fitch, Moody's or a
Certificateholder, furnish the Trustee and/or Fitch, Moody's or a
Certificateholder such underlying data as may be reasonably requested.
SECTION 6.04. Annual Report of Accountants.
On or before May 1 of each year, commencing May 1, 2000, the Servicer at
its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to issue to the
Servicer a report that such firm has examined selected documents, records and
management's assertions relating to loans serviced by the Servicer and stating
that, on the basis of such examination, such servicing has been conducted in
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers, or any successor uniform program, except for such significant
exceptions or errors in records that, in the opinion of such firm, generally
accepted attestation standards requires it to report.
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SECTION 6.05. Statements to Certificateholders.
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class
B-3I Certificates on or before the third Business Day next preceding each
Remittance Date. The Trustee and the Servicer shall inform any Certificateholder
or Underwriter inquiring by telephone of the information contained in the most
recent Monthly Report.
b. Concurrently with each distribution charged to the Certificate Account
the Trustee, so long as it has received the Monthly Report from the Servicer,
shall forward or cause to be forwarded by mail to each Holder of a Class A
Certificate and (if the Originator is not the Servicer) the Originator a
statement setting forth the following:
(i) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to interest, separately
identifying any Unpaid Class A Interest Shortfall included in
such distribution and any remaining Unpaid Class A Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments
included therein, and any remaining Unpaid Class A Principal
Shortfall after giving effect to such distribution;
(iii) the Class Principal Balance for each Class of Class A
Certificates, after giving effect to the distribution of
principal on such Remittance Date;
(iv) the Class A Percentage for such Remittance Date and the
following Remittance Date;
(v) the Pool Scheduled Principal Balance of the Contracts for such
Remittance Date;
(vi) the Pool Factor;
(vii) the number and aggregate principal balances of Contracts
delinquent (a) 30-59 days and (b) 60 or more days;
(viii) the number of Manufactured Homes that were repossessed during
the month ending immediately prior to such Remittance Date,
the number of repossessed Manufactured Homes that remain in
inventory as of the last day of the related Due Period and
repossessed Manufactured Homes purchased by the Originator or
a subsidiary of the Originator from the Trust (during the
related Due Period and cumulatively) by number of Contracts,
aggregate Scheduled Principal Balance of such Contracts and
aggregate purchase price;
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(ix) number of Contracts and aggregate Scheduled Principal Balance
of Contracts extended or otherwise amended during the Due
Period preceding current Remittance Date.
(x) the Class M-1 Distribution Test (as set forth in Exhibit N
hereto);
(xi) the Class M-2 Distribution Test (as set forth in Exhibit N
hereto);
(xii) the Class B Distribution Test (as set forth in Exhibit N
hereto);
(xiii) the Weighted Average Contract Rate of all outstanding
Contracts;
(xiv) the Class M-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xv) the Class M-2 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvi) the Class B-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvii) the Overcollateralization Amount, if any, for such Remittance
Date; and
(xviii) the Additional Principal Distribution Amount, if any, to be
distributed on such Remittance Date pursuant to Section
8.03(a)(12)..
In the case of information furnished pursuant to clauses (i) through (iii)
above, the amounts shall be expressed as a dollar amount per Class A Certificate
with a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class A Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Certificates during such calendar year. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in force.
c. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates on such
Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class M-1 Certificateholders as part of the Monthly
Report, the following information:
(i) the amount of such distribution to Holders of Class M-1
Certificates allocable to interest, separately identifying any
Unpaid Class M-1 Interest Shortfall included in such
distribution, any remaining Unpaid Class M-1 Interest
Shortfall after giving effect to such distribution, any Class
M-1 Liquidation Loss Interest Amount
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included in such distribution and any remaining unpaid Class
M-1 Liquidation Loss Interest Shortfall after giving effect to
such distribution;
(ii) the amount of such distribution to Holders of Class M-1
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein and any remaining Unpaid Class M-1 Principal Shortfall
after giving effect to such distribution;
(iii) the Class M-1 Principal Balance and the Class M-1 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class M-1 Percentage for such Remittance Date and the
following Remittance Date; and
(v) the information described above in Section 6.05(b)(vi) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-1 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
d. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates and Class M-1
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class M-2 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class M-2
Certificates allocable to interest, separately identifying any
Unpaid Class M-2 Interest Shortfall included in such
distribution, any remaining Unpaid Class M-2 Interest
Shortfall after giving effect to such distribution, any Class
M-2 Liquidation Loss Interest Amount included in such
distribution and any remaining unpaid Class M-2 Liquidation
Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-2
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein and any remaining Unpaid Class M-2 Principal Shortfall
after giving effect to such distribution;
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(iii) the Class M-2 Principal Balance and the Class M-2 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class M-2 Percentage for such Remittance Date and the
following Remittance Date; and
(v) the information described above in Section 6.05(b)(vi) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-2 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
e. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1 and Class M-2
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class B-1 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-1
Certificates allocable to interest, separately identifying any
Unpaid Class B-1 Interest Shortfall included in such
distribution, any remaining Unpaid Class B-1 Interest
Shortfall after giving effect to such distribution, any Class
B-1 Liquidation Loss Interest Amount included in such
distribution and any remaining Unpaid Class B-1 Liquidation
Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-1
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein, and any remaining Unpaid Class B-1 Principal
Shortfall after giving effect to such distribution;
(iii) the Class B-1 Principal Balance and the Class B-1 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(iv) the Class B Percentage for such Remittance Date and the
following Remittance Date; and
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(v) the information described above in Section 6.05(b)(vi) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-1 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
f. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2 and
Class B-1 Certificates on such Remittance Date. The Servicer shall also furnish
to the Trustee, which shall forward such report to the Class B-2
Certificateholders as part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-2
Certificates allocable to interest, separately identifying any
Unpaid Class B-2 Interest Shortfall included in such
distribution and any remaining Unpaid Class B-2 Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class B-2
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein, and any Unpaid Class B-2 Principal Shortfall after
giving effect to such distribution;
(iii) the amount, if any, by which the Class B-2 Formula
Distribution Amount for such Remittance Date exceeds the
Remaining Amount Available for such Remittance Date;
(iv) the Class B-2 Principal Balance after giving effect to the
distribution of principal on such Remittance Date;
(v) the Class B Percentage for such Remittance Date and the
following Remittance Date;
(vi) the information described above in Section 6.05(b)(vi) through
(xviii);
(vii) the Class B-2 Liquidation Loss Amount, if any, for such
Remittance Date;
(viii) the Guarantee Payment, if any, for such Remittance Date; and
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(ix) the Weighted Average Contract Rate of all outstanding Contracts.
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-2 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
g. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-3I Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such Remittance Date. The Servicer shall also
furnish to the Trustee, which shall forward such report to the Class B-3I
Certificateholders as part of the Monthly Report, the following information:
(i) the Class B-3I Formula Distribution Amount for such Remittance
Date, including any Unpaid Class B-3I Shortfall immediately
prior to such Remittance Date;
(ii) the Class B-3I Distribution Amount for such Remittance Date;
and
(iii) the Unpaid Class B-3I Shortfall immediately following such
Distribution Date.
h. Copies of all reports provided to the Trustee for the Certificateholders
shall also be provided to Fitch and Moody's and to the Class C
Certificateholders. In addition, Certificate Owners may receive copies of any
reports provided to the Trustee for the Certificateholders, upon written request
together with a certification that they are Certificate Owners and payment of
reproduction and postage expenses associated with the distribution of such
reports, from the Trustee at the Corporate Trust Office.
SECTION 6.06. Payment of Taxes.
The Servicer shall be responsible for and agrees to prepare, make and file
all federal, state, local or other tax returns, information statements and other
returns and documents of every kind and nature whatsoever required to be made or
filed by or on behalf of the Subsidiary REMIC or Master REMIC pursuant to the
Code and other applicable tax laws and regulations. Each such return, statement
and document shall, to the extent required by the Code or other applicable law
and at the request of the Servicer, be signed on behalf of the Subsidiary REMIC
or Master REMIC by the Trustee. The Trustee shall have no responsibility
whatsoever for the accuracy or completeness of any such return, statement or
document. The Servicer agrees to indemnify the Trustee and hold it harmless for,
from, against and in respect to any and all liability, loss, damage and expense
which may be incurred by the Trustee based upon or as a
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result of the Trustee's execution of any and all such tax returns, statements
and documents. The Servicer, if and for so long as it is a Class C
Certificateholder, shall be designated the "tax matters person" on behalf of the
Subsidiary REMIC and the Master REMIC, respectively, in the same manner as a
partnership may designate a "tax matters partner," as such term is defined in
Section 6231(a)(7) of the Code. To the extent permitted by the REMIC Provisions,
any subsequent holder of a Class C Certificate, by acceptance thereof,
irrevocably designates and appoints the Servicer as its agent to perform the
responsibilities of the "tax matters person" on behalf of the Subsidiary REMIC
and the Master REMIC, respectively, if, and during such time as, the Servicer is
not the holder of a Class C Certificate. The Servicer may, at its expense,
retain such outside assistance as it deems necessary in the performance of its
obligations under this paragraph.
Each of the Holders of the Certificates, by acceptance thereof, agrees to
file tax returns consistent with and in accordance with any elections, decisions
or other reports made or filed with regard to federal, state or local taxes on
behalf of the Subsidiary REMIC or the Master REMIC. The Company, as agent for
the tax matters person, shall represent the Subsidiary REMIC or the Master REMIC
in connection with all examinations of the Subsidiary REMIC's or the Master
REMIC's affairs by tax authorities, including resulting administrative and
judicial proceedings. Each of the holders of the Certificates, by acceptance
thereof, agrees to cooperate with the Company in such matters and to do or
refrain from doing any or all things reasonably required by the Company to
conduct such proceedings, provided that no such action shall be required by the
Company of any Certificateholder that would entail unnecessary or unreasonable
expenses for such Certificateholder in the performance of such action.
The Class C Subsidiary Certificateholders and the Class C Master
Certificateholders shall pay, on behalf of the Subsidiary REMIC or the Master
REMIC, respectively, any foreign, federal, state or local income, property,
excise, sales, receipts or any other similar or related taxes or charges which
may be imposed upon the Subsidiary REMIC or the Master REMIC as a REMIC or
otherwise and shall, to the extent provided in Section 10.06, be entitled to be
reimbursed out of the Certificate Account or, if such tax or charge results from
a failure by the Trustee, the Originator or any Servicer to comply with the
provisions of Section 2.04 or 3.07, the Trustee, the Originator or such
Servicer, as the case may be, shall indemnify the Class C Certificateholders for
the payment of any such tax or charge. The Trustee shall be entitled to withhold
from amounts otherwise distributable to the Class C Certificateholders any taxes
or charges payable by the Class C Certificateholders hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Seller shall provide to the Internal
Revenue Service and the persons specified in Sections 860E(e)(3) and (6) of the
Code all information necessary for the application of Section 860E(e) and any
other applicable provision of the Code with respect to the transfer of such
Class C Certificate to such a disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Seller shall, upon the written request of persons
designated in Section 860E(e)(3) of the Code, furnish to such requesting party
and the Internal
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Revenue Service information sufficient to compute the present value of
anticipated excess inclusions within 60 days of the receipt of such written
request.
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ARTICLE VII
SERVICE TRANSFER
SECTION 7.01. Event of Termination.
"Event of Termination" means the occurrence of any of the following:
a. Any failure by the Servicer to make any deposit into an account required
to be made hereunder and the continuance of such failure for a period of five
Business Days after the Servicer has become aware, or should have become aware,
that such deposit was required;
b. Failure on the Servicer's part to observe or perform in any material
respect any covenant or agreement in this Agreement (other than a covenant or
agreement which is elsewhere in this Section specifically dealt with) which
continues unremedied for 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or to the Servicer and the Trustee by Holders of Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates and Class B
Certificates evidencing, as to any such Class, Percentage Interests aggregating
not less than 25%;
c. Any assignment by the Servicer of its duties hereunder except as
specifically permitted hereunder, or any attempt to make such an assignment;
d. A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
e. The Servicer shall have commenced a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
have consented to the entry of an order for relief in an involuntary case under
any such law, or shall have consented to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Servicer or for any substantial part of its
property, or shall have made any general assignment for the benefit of its
creditors, or shall have failed to, or admitted in writing its inability to, pay
its debts as they become due, or shall have taken any corporate action in
furtherance of the foregoing; or
f. The failure of the Servicer to be an Eligible Servicer.
SECTION 7.02. Transfer.
If an Event of Termination has occurred and is continuing, either the
Trustee or Certificateholders with aggregate Percentage Interests representing
25% or more of the Trust, by notice in writing to the Servicer (and to the
Trustee if given by the Certificateholders) may
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terminate all (but not less than all) of the Servicer's management,
administrative, servicing and collection functions (such termination being
herein called a "Service Transfer"). On receipt of such notice (or, if later, on
a date designated therein), or upon resignation of the Servicer in accordance
with Section 12.01, all authority and power of the Servicer under this
Agreement, whether with respect to the Contracts, the Contract Files, the
Land-and-Home Contract Files or otherwise (except with respect to the
Certificate Account, the transfer of which shall be governed by Section 7.06),
shall pass to and be vested in the Trustee pursuant to and under this Section
7.02; and, without limitation, the Trustee is authorized and empowered to
execute and deliver on behalf of the Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments (including, without limitation,
documents required to make the Trustee or a successor servicer the sole
lienholder or legal title holder of record of each Manufactured Home) and to do
any and all acts or things necessary or appropriate to effect the purposes of
such notice of termination. Each of the Originator and the Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Trustee for administration by it of all cash amounts which shall
at the time be held by the Servicer for deposit, or have been deposited by the
Servicer, in the Certificate Account, or for its own account in connection with
its services hereafter or thereafter received with respect to the Contracts and
the execution of any documents required to make the Trustee or a successor
servicer the sole lienholder or legal title holder of record in respect of each
Manufactured Home. The Servicer shall be entitled to receive any other amounts
which are payable to the Servicer under the Agreement, at the time of the
termination of its activities as Servicer. The Servicer shall transfer to the
new servicer (i) the Servicer's records relating to the Contracts in such
electronic form as the new servicer may reasonably request and (ii) any
Contracts, Contract Files and Land-and-Home Contract Files in the Servicer's
possession.
SECTION 7.03. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.02 or the resignation of the Servicer in accordance with
Section 12.01, the Trustee shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that (i) the Trustee will not assume any obligations of the
Originator pursuant to Section 3.06 and (ii) the Trustee shall not be liable for
any acts or omissions of the Servicer occurring prior to such Service Transfer
or for any breach by the Servicer of any of its obligations contained herein or
in any related document or agreement. As compensation therefor, the Trustee
shall be entitled to receive reasonable compensation out of the Monthly
Servicing Fee. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, an Eligible Servicer as
the successor to the Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Servicer hereunder. Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Contracts as it and such successor shall
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agree; provided, however, that no such monthly compensation shall, without the
written consent of 100% of the Certificateholders, exceed the Monthly Servicing
Fee. The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
SECTION 7.04. Notification to Certificateholders.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, the Rating Agencies
and the Certificateholders at their respective addresses appearing on the
Certificate Register.
b. Within ten days following any termination or appointment of a successor
to the Servicer pursuant to this Article VII, the Trustee shall give written
notice thereof to the Rating Agencies and the Certificateholders at their
respective addresses appearing on the Certificate Register.
c. The Trustee shall give written notice to the Rating Agencies at least 30
days prior to the date upon which any Eligible Servicer (other than the Trustee)
is to assume the responsibilities of Servicer pursuant to Section 7.03, naming
such successor Servicer.
SECTION 7.05. Effect of Transfer.
a. After the Service Transfer, the Trustee or new Servicer may notify
Obligors to make payments directly to the new Servicer that are due under the
Contracts after the effective date of the Service Transfer.
b. After the Service Transfer, the replaced Servicer shall have no further
obligations with respect to the management, administration, servicing or
collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer will transmit or cause to be
transmitted directly to the new Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts.
c. A Service Transfer shall not affect the rights and duties of the parties
hereunder (including but not limited to the indemnities of the Servicer and the
Originator pursuant to Article X and Sections 3.06, 11.06 and 11.11(f)) other
than those relating to the management, administration, servicing or collection
of the Contracts.
SECTION 7.06. Transfer of Certificate Account.
Notwithstanding the provisions of Section 7.02, if the Certificate Account
shall be maintained with the Servicer and an Event of Termination shall occur
and be continuing, the Servicer shall, after five days' written notice from the
Trustee, or in any event within ten days after the occurrence of the Event of
Termination, establish an Eligible Account with an institution other than the
Servicer and promptly transfer all funds in the Certificate Account to
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such new account, which shall thereafter be deemed the Certificate Account for
the purposes hereof.
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ARTICLE VIII
PAYMENTS
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a Certificate
as of a Record Date shall be paid on the next succeeding Remittance Date by
check mailed on such Remittance Date to such Certificateholder at the address
for such Certificateholder appearing on the Certificate Register (or, if such
Certificateholder holds a Class of Class A Certificates, Class M Certificates,
or Class B Certificates with an aggregate Percentage Interest of at least 5% or
a Class B-3I, Class C Subsidiary or Class C Master Certificateholder holds Class
B-3I, Class C Subsidiary or Class C Master Certificates with an aggregate
Percentage Interest of at least 20% and so requests, by wire transfer pursuant
to instructions delivered to the Trustee at least ten days prior to such
Remittance Date), the sum equal to such Certificateholder's Percentage Interest
of all amounts distributed on the applicable Class of Certificates. Final
payment of any Certificate shall be made only upon presentation of such
Certificate at the office or agency of the Paying Agent.
b. Each distribution with respect to a Book-Entry Certificate shall be paid
to the Depository, which shall credit the amount of such distribution to the
accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book- Entry Certificate are to be made by
the Depository and the Depository Participants in accordance with the provisions
of the Book Entry Certificates. Neither the Trustee, the Certificate Registrar,
the Originator, the Seller nor the Servicer shall have any responsibility
therefor except as otherwise provided by applicable law. To the extent
applicable and not contrary to the rules of the Depository, the Trustee shall
comply with the provisions of the forms of the Class A, Class M, and Class B
Certificates as set forth in Exhibits A, B and C hereto.
c. The Trustee shall either act as the paying agent or shall appoint an
institution meeting the eligibility requirements set forth in Section 11.06 to
be the paying agent (in either case, the "Paying Agent") and cause it to make
the payments to the Certificateholders required hereunder. The Trustee's
Corporate Trust Office at 180 East Fifth Street, St. Paul, Minnesota 55101,
Attention: Tamara Schultz-Fugh, shall initially act as Paying Agent. The Trustee
shall require the Paying Agent (if other than the Trustee) to agree in writing
that all amounts held by the Paying Agent for payment hereunder will be held in
trust for the benefit of the Certificateholders and that it will notify the
Trustee of any failure by the Servicer to make funds available to the Paying
Agent for the payment of amounts due on the Certificates.
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SECTION 8.02. Permitted Withdrawals from the Certificate Account.
The Trustee may, from time to time as provided herein, make withdrawals
from the Certificate Account of amounts deposited in said account pursuant to
Section 5.05 that are attributable to the Contracts for the following purposes:
a. to make payments in the amounts and in the manner provided for in
Section 8.03;
b. to pay to the Company with respect to each Contract or property
acquired in respect thereof that has been repurchased or replaced pursuant
to Section 3.06, all amounts received thereon and not required to be
distributed to Certificateholders as of the date on which the related
Scheduled Principal Balance or Repurchase Price is determined;
c. to reimburse the Servicer out of Liquidation Proceeds for
Liquidation Expenses incurred by it, to the extent such reimbursement is
permitted pursuant to Section 5.08;
d. to withdraw any amount deposited in the Certificate Account that
was not required to be deposited therein; or
e. to make any rebates or adjustments deemed necessary by the Servicer
pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clause (b), the Company's
entitlement thereto is limited to collections or other recoveries on the related
Contract, the Servicer shall keep and maintain separate accounting, on a
Contract by Contract basis, for the purpose of justifying any withdrawal from
the Certificate Account pursuant to such clause.
SECTION 8.03. Payments.
a. On each Remittance Date the Trustee shall withdraw from the Certificate
Account the Amount Available (as determined on the immediately preceding
Determination Date), plus on the Post-Funding Remittance Date any Pre-Funded
Amount, and on the Remittance Dates in April 2000 and May 2000 any amount
withdrawn from the Capitalized Interest Account and deposited in the Certificate
Account, and apply such funds to make payment in the following order of
priority, subject to Section 8.03(d):
1. if neither Conseco Finance Corp. nor a wholly owned subsidiary of
Conseco Finance Corp. is the Servicer, to pay the Monthly Servicing Fee and
any other compensation owed to the Servicer pursuant to Section 7.03;
2. after payment of the amount specified in clause (1) above, to the
Class A Certificateholders as follows:
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(i) the amount in clause (a)(i) of the definition of
Class A Formula Distribution Amount to the Class A-1
Certificateholders; the amount in clause (a)(ii) to
the Class A-2 Certificateholders; the amount in
clause (a)(iii) to the Class A-3 Certificateholders;
the amount in clause (a)(iv) to the Class A-4
Certificateholders; the amount in clause (a)(v) to
the Class A-5 Certificateholders, or, if the
available amount is less than the sum of the amounts
specified in this clause (i), pro rata to each Class
of Class A Certificates based on the amount of
interest payable pursuant to this clause;
(ii) the aggregate Unpaid Class A Interest Shortfall pro
rata to each Class of Class A Certificates based on
the Unpaid Class A Interest Shortfall of each such
Class;
3. after payment of the amounts specified in clauses (1) - (2) above,
to the Class M-1 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
M-1 Formula Distribution Amount;
(ii) any Unpaid Class M-1 Interest Shortfall;
4. after payment of the amounts specified in clauses (1) - (3) above,
to the Class M-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
M-2 Formula Distribution Amount;
(ii) any Unpaid Class M-2 Interest Shortfall;
5. after payment of the amounts specified in clauses (1) - (4) above,
to the Class B-1 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
B-1 Formula Distribution Amount;
(ii) any Unpaid Class B-1 Interest Shortfall;
6. after payment of the amounts specified in clauses (1) - (5) above,
to the Class A Certificateholders as follows:
(i) if there is a Class A Principal Deficiency Amount as
of such Remittance Date, the remaining Amount
Available, pro rata to each Class of Class A
Certificates based on the related Class Principal
Balance (but in no event shall such amount exceed the
related Class Principal Balance);
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(ii) the Unpaid Class A Principal Shortfall to the Class
A-1, Class A-2, Class A-3, Class A-4 and Class A-5
Certificateholders in the order of priority set forth
in clause (iii) below, but to each Class of Class A
Certificates no more than the Unpaid Class A
Principal Shortfall attributable to such Class;
(iii) if such Remittance Date is on or prior to the Class
A-5 Cross-Over Date, the Class A Percentage of the
Formula Principal Distribution Amount to the Class A
Certificateholders as follows:
(a) to the Class A-1 Certificateholders, but in
no event more than the Class A-1 Principal
Balance;
(b) to the Class A-2 Certificateholders, but in
no event more than the Class A-2 Principal
Balance;
(c) to the Class A-3 Certificateholders, but in
no event more than the Class A-3 Principal
Balance;
(d) to the Class A-4 Certificateholders, but in
no event more than the Class A-4 Principal
Balance;
(e) to the Class A-5 Certificateholders, but in
no event more than the Class A-5 Principal
Balance;
7. after payment of the amounts specified in clauses (1) - (6) above,
to the Class M-1 Certificateholders as follows:
(i) any Unpaid Class M-1 Principal Shortfall;
(ii) the Class M-1 Percentage of the Formula Principal
Distribution Amount (plus, if such Remittance Date is
on the Class A-5 Cross-Over Date, the amount by which
the Class A Percentage of the Formula Principal
Distribution Amount exceeds the Class A Principal
Balance on such date), but in no event more than the
Class M-1 Principal Balance;
(iii) any Class M-1 Liquidation Loss Interest Amount;
(iv) any Unpaid Class M-1 Liquidation Loss Interest
Shortfall;
8. after payment of the amounts specified in clauses (1) - (7) above,
to the Class M-2 Certificateholders as follows:
(i) any Unpaid Class M-2 Principal Shortfall;
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(ii) the Class M-2 Percentage of the Formula Principal
Distribution Amount (plus, if such Remittance Date is
on the Class M-1 Cross-Over Date, the amount, if any,
by which the sum of the Class A Percentage and the
Class M-1 Percentage of the Formula Principal
Distribution Amount exceeds the sum of the Class A
and Class M-1 Principal Balances on such date), but
in no event more than the Class M-2 Principal
Balance;
(iii) any Class M-2 Liquidation Loss Interest Amount;
(iv) any Unpaid Class M-2 Liquidation Loss Interest
Shortfall;
9. after payment of the amounts specified in clauses (1) - (8) above,
to the Class B-1 Certificateholders as follows:
(i) any Unpaid Class B-1 Principal Shortfall;
(ii) the Class B Percentage of the Formula Principal
Distribution Amount (plus, if such Remittance Date is
on the Class M-2 Cross-Over Date, the amount, if any,
by which the sum of the Class A, Class M-1 and Class
M-2 Percentages of the Formula Principal Distribution
Amount exceeds the sum of the Class A, Class M-1 and
Class M-2 Principal Balances on such date), but in no
event more than the Class B-1 Principal Balance;
(iii) any Class B-1 Liquidation Loss Interest Amount;
(iv) any Unpaid Class B-1 Liquidation Loss Interest
Shortfall;
10. after payment of the amounts specified in clauses (1) - (9) above,
to the Class B-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
B-2 Formula Distribution Amount;
(ii) any Unpaid Class B-2 Interest Shortfall;
(iii) any Unpaid Class B-2 Principal Shortfall;
(iv) if such Remittance Date is on or after the Class B-1
Cross-Over Date, the Class B Percentage of the
Formula Principal Distribution Amount (minus, if such
Remittance Date is on the Class B-1 Cross-Over Date,
the amount of the Class B Percentage of the Formula
Principal Distribution Amount actually distributed to
the Class B-1 Certificateholders on such date, and
plus, if such Remittance Date is on the Class B-1
Cross-Over Date, the amount, if any, by which the
Formula Principal Distribution Amount exceeds the sum
of the Class A Principal Balance, the Class M-1
Principal
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Balance, the Class M-2 Principal Balance and the
Class B-1 Principal Balance on such date);
11. if the Company or a wholly owned subsidiary of the Company is the
Servicer, after payment of the amounts specified in clauses (1) - (10)
above, to pay the Monthly Servicing Fee and any other compensation owed to
the Servicer pursuant to Section 7.02;
12. after payment of the amounts specified in clauses (1) - (11)
above, to the Certificateholders any Additional Principal Distribution
Amount, as follows and in no case more than the Class Principal Balance of
any Class:
(i) to the Class A Certificateholders (sequentially, beginning
with Class A-1), the amount, if any, by which $4,500,000
exceeds the aggregate Additional Principal Distribution Amount
distributed on prior Remittance Dates pursuant to this clause
(i); and
(ii) on each Additional Principal Payment Date (as defined in
Section 8.05(f)), to the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificateholders pro rata based upon the Class
Principal Balance of each Class;
13. after payment of the amounts specified in clauses (1) - (12)
above, the Class B-3I Distribution Amount to the Class B-3I
Certificateholders;
14. after payment of the amounts specified in clauses (1) - (13)
above, to reimburse the Class C Certificateholders for expenses incurred by
and reimbursable to them pursuant to Section 10.06; and
15. after payment of the amounts specified in clauses (1) - (14)
above, any remaining funds to the Class C Master Certificateholders.
b. On each Remittance Date, the Uncertificated Subsidiary Interests shall
receive distributions, to the extent of the Adjusted Amount Available, in the
following order of priority:
1. The Class A Uncertificated Subsidiary Interests shall receive a
distribution of principal in an amount equal to the amount of principal
distributed to its respective Corresponding Certificate Class pursuant to
Section 8.03(a)(6);
2. The Class M-S1 Interest shall receive a distribution of principal
in an amount equal to the amount of principal distributed to the Class M-1
Certificates pursuant to Section 8.03(a)(7);
3. The Class M-S2 Interest shall receive a distribution of principal
in an amount equal to the amount of principal distributed to the Class M-2
Certificates pursuant to Section 8.03(a)(8);
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4. The Class B-S1 and Class B-S2 Interests shall receive distributions
of principal in an amount equal to the amount of principal distributed to
its respective Corresponding Certificate Class pursuant to Section
8.03(a)(9)-(10);
5. Each Class of Uncertificated Subsidiary Interests shall receive
distributions of interest, pro rata in an amount equal to (i) 1/12th of the
Weighted Average Contract Rate times the outstanding Subsidiary Interest
Principal Balance of such Class of Uncertificated Subsidiary Interests,
plus (ii) any Unpaid Subsidiary Interest Shortfall with respect to such
Class; and
6. Any remaining Amount Available shall be distributed to the Class C
Subsidiary Certificateholders.
On each Remittance Date the Trustee shall be deemed to deposit in the
Certificate Account, for distribution to the holders of the Certificates in the
priority set forth in Section 8.03(a), the amount distributed to the Trustee as
holder of the Uncertificated Subsidiary Interests under Section 8.04(b).
c. If the applicable Monthly Report indicates a Class M-1 Interest
Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a Class B-1
Interest Deficiency Amount for such Remittance Date, the Trustee shall withdraw
from the Certificate Account (to the extent of funds on deposit therein one
Business Day prior to such Remittance Date, after distribution of the Amount
Available pursuant to Section 8.03(a)) an amount equal to the Class M-1 Interest
Deficiency Amount, the Class M-2 Interest Deficiency Amount and the Class B-1
Interest Deficiency Amount (or the amount of such funds in the Certificate
Account, if less) and distribute such amount, first to the Class M-1
Certificateholders up to the amount of the Class M-1 Interest Deficiency Amount
(or pro rata, if such funds are less than the Class M-1 Interest Deficiency
Amount), if any, then to the Class M-2 Certificateholders up to the amount of
the Class M-2 Interest Deficiency Amount (or pro rata, if such funds are less
than the Class M-2 Interest Deficiency Amount), if any, and then to the Class
B-1 Certificateholders up to the amount of the Class B-1 Interest Deficiency
Amount (or pro rata, if such remaining funds are less than the Class B-1
Interest Deficiency Amount); provided, however, that (i) no such withdrawal
shall be made with respect to the Class M-1 Interest Deficiency Amount if the
Cumulative Realized Losses as of such Remittance Date are greater than
$175,500,000; (ii) no such withdrawal shall be made with respect to the Class
M-2 Interest Deficiency Amount if the Cumulative Realized Losses as of such
Remittance Date are greater than $146,250,000; (iii) no withdrawal with respect
to Class B-1 Interest Deficiency Amount shall be made if the Cumulative Realized
Losses as of such Remittance Date are greater than $117,000,000; (iv) no
withdrawal with respect to a Class M-1 Interest Deficiency Amount shall be made
if the aggregate withdrawals with respect to all prior Class M-1 Interest
Deficiency Amounts equal $2,700,000; (v) no withdrawal with respect to a Class
M-2 Interest Deficiency Amount shall be made if the aggregate withdrawals with
respect to all prior Class M-2 Interest Deficiency Amounts equal $2,250,000; and
(vi) no withdrawal with respect to a Class B-1 Interest Deficiency Amount shall
be made if the aggregate withdrawals with respect to all prior Class B-1
Interest Deficiency Amounts equal $1,350,000. If such applicable Monthly Report
indicates that the Class B-2 Formula Distribution Amount for such Remittance
Date exceeds the Remaining
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Amount Available, the Trustee shall withdraw from the Certificate Account (to
the extent of funds on deposit therein as a consequence of a deposit made by the
Company pursuant to Section 8.04(a)) an amount equal to the Guarantee Payment
and distribute such amount to the Class B-2 Certificateholders.
d. Notwithstanding the priorities set forth above, any Pre-Funded Amount
deposited in the Certificate Account shall be applied solely to pay principal of
the Class A Certificates sequentially, beginning with Class A-1, and any amount
withdrawn from the Capitalized Interest Account and deposited in the Certificate
Account shall be applied solely as described in Section 8.06.
e. If the Trustee shall not have received the applicable Monthly Report by
any Remittance Date, the Trustee shall distribute all funds then in the
Certificate Account to Certificateholders in accordance with Section 8.03(a), to
the extent of such funds, on such Remittance Date.
SECTION 8.04. Limited Guarantee.
a. No later than the third Business Day prior to each Remittance Date, the
Servicer (if other than the Guarantor) shall notify the Guarantor of the amount
of the Guarantee Payment (if any) for such Remittance Date. Not later than the
Business Day preceding each Remittance Date, the Guarantor shall deposit the
Guarantee Payment, if any, for such Remittance Date into the Certificate
Account.
b. The obligations of the Guarantor under this Section shall not terminate
upon or otherwise be affected by a Service Transfer pursuant to Article VII of
this Agreement.
c. The obligation of the Guarantor to provide the Limited Guarantee under
this Agreement shall terminate on the Final Remittance Date.
d. The obligation of the Guarantor to make the Guarantee Payments described
in subsection (a) above shall be unconditional and irrevocable. The Guarantor
acknowledges that its obligation to make the Guarantee Payments described in
subsection (a) above shall be deemed a guarantee by the Guarantor of
indebtedness of the Trust for money borrowed from the Class B-2
Certificateholders.
e. If the Guarantor fails to make a Guarantee Payment in whole or in part,
the Guarantor shall promptly notify the Trustee, and the Trustee shall promptly
notify Fitch and Moody's.
f. The Class C Subsidiary Certificateholders may at any time, but are not
obligated to, supplement the Guarantor's Limited Guarantee by depositing assets
in a "qualified reserve fund," within the meaning of ss. 860G(a)(7) of the Code
in accordance with ss. 860G(d)(2)(D) of the Code.
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<PAGE>
SECTION 8.05. Class C Subsidiary Certificateholder's Purchase Option;
Auction Sale; Additional Principal Distribution Amount.
a. Subject to the conditions in subsection (b) below, the Class C
Subsidiary Certificateholder shall have the option to purchase all of the
Contracts and all property acquired in respect of any Contract remaining in the
Trust at a price (such price being referred to as the "Minimum Purchase Price")
equal to the greater of:
A. the sum of (x) 100% of the principal balance of each Contract
(other than any Contract as to which title to the underlying
property has been acquired and whose fair market value is
included pursuant to clause (y) below), plus (y) the fair
market value of such acquired property (as determined by the
Originator as of the close of business on the third Business
Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to
Section 12.04) or
B. the aggregate fair market value (as determined by the
Originator as of the close of business on such third Business
Day) of all of the assets of the Trust,
plus, in either case, any Unpaid Class A Interest Shortfall, any Unpaid Class
M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest
Shortfall, any Unpaid Class M-2 Interest Shortfall, any Unpaid Class M-2
Liquidation Loss Interest Shortfall, any Unpaid Class B-1 Interest Shortfall,
any Unpaid Class B-1 Liquidation Loss Interest Shortfall and any Unpaid Class
B-2 Interest Shortfall as well as one month's interest at the applicable
Contract Rate on the Scheduled Principal Balance of each Contract (including any
Contract as to which the related Manufactured Home has been repossessed).
b. The purchase by the Class C Subsidiary Certificateholder of all of the
Contracts pursuant to Section 8.05(a) above shall be at the option of the Class
C Subsidiary Certificateholder, but shall be conditioned upon (1) the Pool
Scheduled Principal Balance, at the time of any such purchase, aggregating not
more than 20% of the Cut-off Date Pool Principal Balance, (2) such purchase
being made pursuant to a plan of complete liquidation of each of the Subsidiary
REMIC and the Master REMIC in accordance with Section 860F of the Code, as
provided in Section 12.03, (3) the Class C Subsidiary Certificateholder having
provided the Trustee and the Depository (if any) with at least 30 days' written
notice and (4) the Originator or the Servicer (as applicable) shall have
delivered to the Trustee an unqualified Opinion of Counsel stating that payment
of the purchase price to the Certificateholders will not constitute a voidable
preference or fraudulent transfer under the United States Bankruptcy Code. If
such option is exercised, the Class C Subsidiary Certificateholder, as
applicable, shall provide to the Trustee the certification required by Section
12.03, which certificate shall constitute a plan of complete liquidation of each
of the Subsidiary REMIC and the Master REMIC within the meaning of Section 860F
of the Code, and the Trustee shall promptly sign such certification and release
to the Class C Subsidiary Certificateholder, the Contract Files and
Land-and-Home Contract Files pertaining to the Contracts being repurchased.
8-9
<PAGE>
c. The Class C Subsidiary Certificateholder may assign its rights under
this Section 8.05, separately from its other rights as Holder of the Class C
Subsidiary Certificates, by giving written notice of such assignment to the
Trustee. Following the Trustee's receipt of such notice of assignment, the
Trustee shall recognize only such assignee (or its assignee in turn) as the
Person entitled to exercise the purchase option set forth in Section 8.05(a).
d. The Servicer shall notify the Trustee and the Class C Subsidiary
Certificateholder (whether or not the Class C Subsidiary Certificateholder has
then assigned its rights under this Section 8.05 pursuant to subsection (c)) no
later than two Business Days after the Determination Date following the first
Due Period which includes the date on which the Pool Scheduled Principal Balance
first becomes less than or equal to 20% of the Cut-off Date Pool Principal
Balance, to the effect that the Pool Scheduled Principal Balance is then less
than or equal to 20% of the Cut-off Date Pool Principal Balance.
e. If the Class C Subsidiary Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option described
in subsection (b) by the Remittance Date occurring in the month following the
Determination Date specified in subsection (d), then promptly after the
following Remittance Date the Trustee shall begin a process for soliciting bids
in connection with an auction for the Contracts. The Trustee shall provide the
Class C Subsidiary Certificateholder (or its assignee) written notice of such
auction at least 10 Business Days prior to the date bids must be received in
such auction (the "Auction Date").
If at least two bids are received, the Trustee shall solicit and resolicit
new bids from all participating bidders until only one bid remains or the
remaining bidders decline to resubmit bids. The Trustee shall accept the highest
of such remaining bids if it is equal to or in excess of the greater of (i) the
Minimum Purchase Price and (ii) the fair market value of the Contracts and
related property (such amount being referred to as the "Minimum Auction Price").
If less than two bids are received or the highest bid after the resolicitation
process is completed is not equal to or in excess of the Minimum Auction Price,
the Trustee shall not consummate such sale. If a bid meeting the Minimum
Purchase Price is received, then the Trustee may, and if so requested by the
Class C Subsidiary Certificateholder shall, consult with a financial advisor,
which may be an underwriter of the Certificates, to determine if the fair market
value of the Contracts and related property has been offered.
If the first auction conducted by the Trustee does not produce any bid at
least equal to the Minimum Auction Price, then the Trustee shall, beginning on
the Remittance Date occurring approximately three months after the Auction Date
for the failed first auction, commence another auction in accordance with the
requirement of this subsection (e). If such second auction does not produce any
bid at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Remittance Date occurring approximately three months after the
Auction Date for the failed second auction, commence another auction in
accordance with the requirements of this subsection (e), and shall continue to
conduct similar auctions approximately every three months thereafter until the
earliest of (i) delivery by the Class C Subsidiary Certificateholder or its
assignee of notice of exercise of its purchase option under subsection (a), (ii)
receipt by the
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Trustee of a bid meeting the conditions specified in the preceding paragraph, or
(iii) the Remittance Date on which the principal balance of all the Contracts is
reduced to zero.
If the Trustee receives a bid meeting the conditions specified in this
subsection (e), then the Trustee's written acceptance of such bid shall
constitute a plan of complete liquidation within the meaning of Section 860F of
the Code, and the Trustee shall release to the winning bidder, upon payment of
the bid purchase price, the Contract Files pertaining to the Contracts being
purchased.
f. If the Class C Subsidiary Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option described
in subsection (b) by the Remittance Date occurring in the month following the
Determination Date specified in subsection (d), then on the following Remittance
Date and each Remittance Date thereafter (each, an "Additional Principal Payment
Date") the Class M-1, Class M-2, Class B-1 and Class B-2 Certificates shall be
entitled to receive the Additional Principal Distribution Amount, allocated
among such classes pro rata based upon the outstanding Principal Balance of each
such Class on each such Remittance Date.
SECTION 8.06. Capitalized Interest Account.
a. On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $2,100,000 received from the Seller pursuant
to Section 2.02(s). The Capitalized Interest Account shall be entitled "U.S.
Bank National Association as Trustee for the benefit of holders of Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates Series 2000-1." On
the Remittance Dates occurring in April 2000 and May 2000, if the Monthly Report
for such Remittance Date indicates that the Amount Available (after payment of
the amount specified in clause (1) of Section 8.03(a) and including in the
Amount Available only payments in respect of interest on the Contracts) is not
sufficient to pay the Class A Interest Distribution Amount, plus the Class M-1
Interest Distribution Amount, plus the Class M-2 Interest Distribution Amount,
plus the Class B-1 Interest Distribution Amount, the Trustee shall withdraw the
amount of such deficiency, or the amount of funds in the Capitalized Interest
Account (net of any investment earnings thereon), if less, and shall deposit
such funds in the Certificate Account for distribution on such Remittance Date
in order first to pay any deficiency in the Amount Available to pay the Class A
Interest Distribution Amount, second to pay any deficiency in the Amount
Available to pay the Class M-1 Interest Distribution Amount, third to pay any
deficiency in the Amount Available to pay the Class M-2 Interest Distribution
Amount, and fourth to pay any deficiency in the Amount Available to pay the
Class B-1 Interest Distribution Amount.
b. The Capitalized Interest Account shall be part of the Trust but not part
of the Subsidiary REMIC or the Master REMIC. The Trustee on behalf of the Trust
shall be the legal owner of the Capitalized Interest Account. Green Tree Finance
Corp.-Two shall be the beneficial owner of the Capitalized Interest Account,
subject to the foregoing power of the Trustee to transfer amounts in the
Capitalized Interest Account to the Certificate Account. Funds in the
Capitalized Interest Account shall, at the direction of Green Tree Finance
Corp.-Two, be invested in Eligible Investments that mature no later than the
Business Day prior to the next
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<PAGE>
succeeding Remittance Date. All net income and gain from such investments shall
be distributed to Green Tree Finance Corp.-Two on such Remittance Date. All
amounts earned on amounts on deposit in the Capitalized Interest Account shall
be taxable to Green Tree Finance Corp.-Two.
c. Any funds remaining in the Capitalized Interest Account after any
withdrawals on the Remittance Date in May 2000 shall be distributed to Green
Tree Finance Corp.-Two on such Remittance Date. After such date no further
amounts shall be deposited in or withdrawn from the Capitalized Interest
Account. Any losses on such investments shall be deposited in the Capitalized
Interest Account by Green Tree Finance Corp.-Two out of its own funds
immediately as realized.
SECTION 8.07. Pre-Funding Account.
a. On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible Account.
The Pre-Funding Account shall be entitled "Pre-Funding Account, U.S. Bank
National Association as Trustee for the benefit of holders of Certificates,
Series 2000-1." The Trustee shall maintain within the Pre- Funding Account two
subaccounts, the Pre-Funding Subaccount and the Undelivered Contract Subaccount.
The Undelivered Contract Subaccount pertains to those Land-and-Home Contracts
transferred to the Trust on the Closing Date that are Undelivered Contracts.
Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee
for the Holders of the Certificates for the uses and purposes set forth herein.
b. The Trustee shall deposit in the Pre-Funding Subaccount the amount
received from the Seller pursuant to Section 2.02(t). Amounts on deposit in the
Pre-Funding Subaccount shall be withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw an
amount equal to 100% of the Cut-off Date Principal Balance of each
Subsequent Contract transferred and assigned to the Trustee on such
Subsequent Transfer Date and pay such amount to or upon the order of the
Seller upon satisfaction of the conditions set forth in Section 2.03(b)
with respect to such transfer and assignment.
(ii) On the Business Day immediately preceding the Post-Funding
Remittance Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Pre-Funding Subaccount, net of investment
earnings.
c. The Trustee shall deposit in the Undelivered Contract Subaccount the
amount received from the Seller pursuant to Section 2.02(t). Amounts on deposit
in the Undelivered Contract Subaccount shall be withdrawn by the Trustee as
follows:
(i) If the Seller delivers the related Land-and-Home Contract File for
an Undelivered Contract to the Trustee at least two Business Days before
the last day of the Pre-Funding Period, the Trustee shall withdraw an
amount equal to 100% of the Cut-off Date Principal Balance of such Contract
and pay such amount to or upon the order of the Seller.
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(ii) [Reserved]
(iii) The Seller shall give the Trustee telephonic notice of its
intended delivery of Land-and-Home Contract Files. The Trustee will use
reasonable efforts to process the Land-and-Home Contract Files and remit
any amount payable for them to the Seller in a timely manner.
(iv) On the Business Day immediately preceding the Post-Funding
Remittance Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Undelivered Contract Subaccount, net of investment
earnings.
d. The Pre-Funding Account shall be part of the Trust but not part of the
Master REMIC or Subsidiary REMIC. The Trustee on behalf of the Trust shall be
the legal owner of the Pre-Funding Account. The Seller shall be the beneficial
owner of the Pre-Funding Account, subject to the foregoing power of the Trustee
to transfer amounts in the Pre-Funding Account to the Certificate Account. Funds
in the Pre-Funding Account shall, at the direction of the Servicer, be invested
in Eligible Investments of the kind described in clauses (i) and (ii)(A) of the
definition of "Eligible Investment" and that mature no later than the Business
Day prior to the next succeeding Payment Date. All amounts earned on deposits in
the Pre-Funding Account shall be taxable to the Seller. The Trustee shall
release to the Seller all investment earnings in the Pre-Funding Account on the
Post-Funding Remittance Date.
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ARTICLE IX
THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS
SECTION 9.01. The Certificates.
a. The Uncertificated Subsidiary Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the original Subsidiary Interest
Principal Balance specified with respect to such Class of Uncertificated
Subsidiary Interests.
b. The Class A, the Class M, the Class B, the Class B-3I, the Class C
Master and the Class C Subsidiary Certificates shall be substantially in the
forms set forth in Exhibits A, B, C-1, C-2, J and K, respectively, and shall, on
original issue, be executed by the Trustee on behalf of the Trust to or upon the
order of the Originator. The Class A, the Class M, and the Class B Certificates
shall be evidenced by (i) one or more Class A-1 Certificates representing
$138,500,000 initial aggregate principal balance, (ii) one or more Class A-2
Certificates representing $40,000,000 initial aggregate principal balance, (iii)
one or more Class A-3 Certificates representing $130,500,000 initial aggregate
principal balance, (iv) one or more Class A-4 Certificates representing
$125,000,000 initial aggregate principal balance, (v) two or more Class A-5
Certificates representing $313,000,000 initial aggregate principal balance, (vi)
one or more Class M-1 Certificates representing $45,000,000 initial aggregate
principal balance, (vii) one or more Class M-2 Certificates representing
$36,000,000 initial aggregate principal balance, (viii) one or more Class B-1
Certificates representing $27,000,000 initial aggregate principal balance, (ix)
one or more Class B-2 Certificates representing $31,500,000 initial aggregate
principal balance, beneficial ownership of such Classes of Certificates to be
held through Book-Entry Certificates in minimum dollar denominations of $1,000
and integral dollar multiples of $1,000 in excess thereof. The Class B-3I, Class
C Master, and Class C Subsidiary Certificates shall be issuable in Percentage
Interests and shall each be evidenced by a single certificate issued on the
Closing Date to Green Tree Finance Corp.-Two.
c. The Certificates shall be executed by manual signature on behalf of the
Trustee by a duly authorized Responsible Officer or authorized signatory.
Certificates bearing the signatures of individuals who were at any time the
proper officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
execution and delivery of such Certificate or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless such Certificate has been
executed by manual signature in accordance with this Section, and such signature
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their execution, except for those
Certificates executed on the Closing Date, which shall be dated the Closing
Date.
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SECTION 9.02. Registration of Transfer and Exchange of Certificates.
a. The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.02 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class B-3I
Certificate, Class C Subsidiary Certificate or Class C Master Certificate shall
be made by the Originator or any other Person unless such transfer is exempt
from the registration requirements of the Act, as amended, and any applicable
state securities laws or is made in accordance with the Act and laws. In the
event that any such transfer is to be made, (A) the Originator may require a
written Opinion of Counsel acceptable to and in form and substance satisfactory
to the Originator that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the Act and
laws or is being made pursuant to the Act and laws, which Opinion of Counsel
shall not be an expense of the Trustee or the Originator, and (B) the Trustee
shall require the transferee to execute an investment letter substantially in
the form of Exhibit M attached hereto, which investment letter shall not be an
expense of the Trustee or the Originator. Any Class B-3I Certificateholder,
Class C Subsidiary Certificateholder or Class C Master Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Originator and the Certificate Registrar against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
(2) No transfer of a Class M-1, Class M-2, Class B-1 or B-2
Certificate, or any interest therein, shall be made to any employee benefit
plan, trust or account that is subject to ERISA, or that is described in
Section 4975(e)(1) of the Code (each, a "Plan"), unless the prospective
transferee provides the Servicer and the Trustee with a certification of
facts and, at its own expense, an Opinion of Counsel which establish to the
satisfaction of the Servicer and the Trustee that such transfer will not
result in a violation of Section 406 of ERISA or Section 4975 of the Code
or cause the Servicer, the Originator or the Trustee to be deemed a
fiduciary of such Plan or result in the imposition of an excise tax under
Section 4975 of the Code. Alternatively, an insurance company general
account may, at its expense, deliver to the Trustee and the Servicer a
representation that the transfer and holding of such a Certificate are
exempt under Section I and Section III of Prohibited Transaction Class
Exemption 95-60. Unless such opinion or representation is delivered, each
transferee will be deemed to represent to the Trustee and the Servicer that
it is not a Plan, is not acting on behalf of a Plan, a qualified retirement
Plan or a tax- favored Plan, and is not investing assets of the Plan
subject to ERISA or to section 4975 of the Internal Revenue Code.
(3) Notwithstanding anything to the contrary contained herein, (A)
neither the Class C Subsidiary Certificate nor the Class C Master
Certificate, nor any interest therein, shall be transferred, sold or
otherwise disposed of to a "disqualified organization," within the meaning
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of Section 860E(e)(5) of the Code (a "Disqualified Organization"),
including, but not limited to, (i) the United States, a state or political
subdivision thereof, a foreign government, an international organization or
an agency or instrumentality of any of the foregoing, (ii) an organization
(other than a cooperative described in Section 521 of the Code) which is
exempt from the taxes imposed by Chapter 1 of the Code and not subject to
the tax imposed on unrelated business income by Section 511 of the Code, or
(iii) a cooperative described in Section 1381(a)(2)(C) of the Code, and (B)
prior to any registration of any transfer, sale or other disposition of the
Class C Subsidiary Certificate or Class C Master Certificate, the proposed
transferee shall deliver to the Trustee, under penalties of perjury, an
affidavit that such transferee is not a Disqualified Organization, with
respect to which the Trustee shall have no actual knowledge that such
affidavit is false, and the transferor and the proposed transferee shall
each deliver for the Trustee an affidavit with respect to any other
information reasonably required by the Trustee pursuant to the REMIC
Provisions, including, without limitation, information regarding the
transfer of noneconomic residual interests and transfers of any residual
interest to or by a foreign person; provided, however, that, upon the
delivery to the Trustee of an Opinion of Counsel, in form and substance
satisfactory to the Trustee and rendered by Independent counsel, to the
effect that the beneficial ownership of the Class C Subsidiary Certificate
or the Class C Master Certificate, as the case may be, by any Disqualified
Organization will not result in the imposition of federal income tax upon
the Subsidiary REMIC or the Master REMIC or any Certificateholder or any
other person or otherwise adversely affect the status of the Subsidiary
REMIC or the Master REMIC as a REMIC, the foregoing prohibition on
transfers, sales and other dispositions, as well as the foregoing
requirement to deliver a certificate prior to any registration thereof,
shall, with respect to such Disqualified Organization, terminate.
Notwithstanding any transfer, sale or other disposition of the Class C
Subsidiary Certificate or Class C Master Certificate, or any interest
therein, to a Disqualified Organization or the registration thereof in the
Certificate Register, such transfer, sale or other disposition and any
registration thereof, unless accompanied by the Opinion of Counsel
described in the preceding sentence, shall be deemed to be void and of no
legal force or effect whatsoever and such Disqualified Organization shall
be deemed to not be the Class C Subsidiary or Class C Master
Certificateholder, as the case may be, for any purpose hereunder,
including, but not limited to, the receipt of distributions on the Class C
Subsidiary Certificate or Class C Master Certificate, and shall be deemed
to have no interest whatsoever in the Class C Subsidiary Certificate or
Class C Master Certificate. Each Class C Subsidiary or Class C Master
Certificateholder, by his acceptance thereof, shall be deemed for all
purposes to have consented to the provisions of this Section 9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance with the
provisions of this Section 9.02(b) shall be deemed to be void and of no
legal force or effect whatsoever and such transferee shall be deemed to not
be the Certificateholder for any purpose hereunder, including, but not
limited to, the receipt of distributions on such Certificate, and shall be
deemed to have no interest whatsoever in such Certificate.
(5) The Trustee shall give notice to Fitch and Moody's promptly
following any transfer, sale or other disposition of a Class B-3I, Class C
Subsidiary or Class C Master Certificate.
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c. At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of authorized denominations of a like aggregate original
denomination, upon surrender of such Certificates to be exchanged at such
office. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing.
d. Except as provided in paragraph (e) below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Class A, Class M-1, Class M-2
and Class B Certificates may not be transferred by the Trustee except to another
Depository; (ii) the Depository shall maintain book- entry records with respect
to the Certificate Owners and with respect to ownership and transfers of such
Class A, Class M-1, Class M-2 and Class B Certificates; (iii) ownership and
transfers of registration of the Class A, Class M-1, Class M-2 and Class B
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall deal with the Depository, Depository Participants and indirect
participating firms as representatives of the Certificate Owners of the Class A,
Class M and Class B for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
e. If (x) the Seller or the Depository advises the Trustee in writing that
the Depository is no longer willing or able properly to discharge its
responsibilities as Depository and (y) the Trustee or the Originator is unable
to locate a qualified successor or (z) the Originator at its sole option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Class A Certificates, Class M Certificates and
Class B Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Class A Certificates,
Class M-1 Certificates, Class M-2 Certificates and Class B Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Originator nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be
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protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1 Certificate, one Class A-2 Certificate, one Class A-3
Certificate, one A-4 Class Certificate, two Class A-5 Certificates, one Class
M-1 Certificate, one Class M-2 Certificate, one Class B-1 Certificate and one
Class B-2 Certificate, each in registered form registered in the name of the
Depository's nominee, Cede & Co., the total face amount of which represents 100%
of the related Original Principal Balance, respectively. If, however, the
aggregate principal amount of a Class of Class A Certificates, Class M
Certificates or Class B Certificates exceeds $200,000,000, one such Class A
Certificate, Class M Certificate and/or Class B Certificate will be issued with
respect to each $200,000,000 of principal amount and an additional Certificate
of such Class or Classes will be issued with respect to any remaining principal
amount. Each such Class A, Class M and Class B Certificate registered in the
name of the Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
SECTION 9.03. No Charge; Disposition of Void Certificates.
No service charge shall be made to a Certificateholder for any transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates. All Certificates
surrendered for transfer and exchange shall be disposed of in a manner approved
by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) there is delivered to
the Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and original denomination. Upon the issuance of any
new Certificate under this Section 9.04, the Trustee may require the
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payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
Any duplicate Certificate issued pursuant to this Section 9.04 shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time.
SECTION 9.05. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Servicer, the Seller, the Trustee, the Paying Agent and the Certificate
Registrar may treat the person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving remittances pursuant
to Section 8.01 and for all other purposes whatsoever, and none of the Servicer,
the Seller, the Trustee, the Certificate Registrar, the Paying Agent or any
agent of the Servicer, the Seller, the Trustee, the Paying Agent or the
Certificate Registrar shall be affected by notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar will furnish to the Trustee and the Servicer,
within five days after receipt by the Certificate Registrar of a request
therefor from the Trustee in writing, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more (hereinafter referred to as
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If such list is
as of a date more than 90 days prior to the date of receipt of such Applicants'
request, the Trustee shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such Applicants access to such
list promptly upon receipt. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Certificate Registrar and the Trustee that none of
the Originator, the Certificate Registrar or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 9.07. Authenticating Agents.
The Trustee may appoint one or more Authenticating Agents with power to act
on its behalf and subject to its direction in the execution and delivery of the
Certificates. For all purposes of this Agreement, the execution and delivery of
Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the execution and delivery of Certificates "by the Trustee."
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ARTICLE X
INDEMNITIES
SECTION 10.01. Company's Indemnities.
The Seller and Originator will jointly and severally defend and indemnify
the Trust, the Trustee (including the Custodian, the Paying Agent and any other
agents of the Trustee) and the Certificateholders against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation of any third-party claims (i)
arising out of or resulting from the origination of any Contract (including but
not limited to truth in lending requirements) or the servicing of such Contract
prior to its transfer to the Trust (but only to the extent such cost, expense,
loss, damage, claim or liability is not provided for by the Originator's
repurchase of such Contract pursuant to Section 3.06) or (ii) arising out of or
resulting from the use or ownership of any Manufactured Homes by the Originator
or the Servicer or any Affiliate of either. Notwithstanding any other provision
of this Agreement, the obligation of the Originator under this Section shall not
terminate upon a Service Transfer pursuant to Article VII, except that the
obligation of the Originator under this Section shall not relate to the actions
of any subsequent Servicer after a Service Transfer.
SECTION 10.02. Liabilities to Obligors.
No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by the Trust or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby and, to the
maximum extent permitted and valid under mandatory provisions of law, the Trust
and the Certificateholders expressly disclaim such assumption.
SECTION 10.03. Tax Indemnification.
The Originator agrees to pay, and to indemnify, defend and hold harmless
the Trust, the Trustee (including the Custodian, the Paying Agent and any other
agents of the Trustee) and the Certificateholders from, any taxes which may at
any time be asserted with respect to, and as of the date of, the transfer of the
Contracts to the Trust, including, without limitation, any sales, gross
receipts, general corporation, personal property, privilege or license taxes
(but not including any federal, state or other taxes arising out of the creation
of the Trust and the issuance of the Certificates), any tax imposed on the Trust
as a result of the Originator's repurchase of any Contract pursuant to Section
3.06(c), and costs, expenses and reasonable counsel fees in defending against
the same, whether arising by reason of the acts to be performed by the
Originator, the Seller, the Servicer or the Trustee under this Agreement or
imposed against the Trust, a Certificateholder or otherwise.
SECTION 10.04. Servicer's Indemnities.
The Servicer shall defend and indemnify the Trust, the Trustee (including
the Custodian, the Paying Agent and any other agents of the Trustee) and the
Certificateholders against any and
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all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, in respect
of any action taken or omitted to be taken by the Servicer with respect to any
Contract. This indemnity shall survive any Service Transfer (but the original
Servicer's obligations under this Section 10.04 shall not relate to any actions
of any subsequent Servicer after a Service Transfer) and any payment of the
amount owing under, or any repurchase by the Originator of, any such Contract.
SECTION 10.05. Operation of Indemnities.
Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Originator or the Servicer has made any indemnity payments to the Trustee
pursuant to this Article and the Trustee thereafter collects any of such amounts
from others, the Trust will repay such amounts collected to the Originator or
the Servicer, as the case may be, without interest.
SECTION 10.06. REMIC Tax Matters.
If Class C Subsidiary Certificateholders or Class C Master
Certificateholders, pursuant to Section 6.06, pay any taxes or charges imposed
upon the Subsidiary REMIC or the Master REMIC, as the case may be, as a REMIC or
otherwise, such taxes or charges, except to the extent set forth in the
following proviso, shall be expenses and costs of the Trust and the Class C
Subsidiary Certificateholders or Class C Master Certificateholders shall be
entitled to be reimbursed therefor out of the Certificate Account as provided in
Section 8.03; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class C Subsidiary
Certificateholders or Class C Master Certificateholders be entitled to
reimbursement therefor out of the Certificate Account, if and to the extent that
such taxes or charges resulted from a failure by the Originator, the Trustee or
any Servicer to comply with the provisions of Section 2.04.
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ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Termination and after
the curing of all Events of Termination which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Termination has occurred (which has not been cured),
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
a. Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
c. The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders with aggregate
Percentage Interests representing 25% or more of the Trust relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement; and
d. The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at
the Corporate Trust Office obtains actual knowledge of such event or the
Trustee receives written notice of such
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event from the Servicer or the Holders of Certificates evidencing, as to
any Class, Percentage Interests representing 25% or more.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of a
Servicing Officer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any counsel
for the Originator, the Seller or the Servicer shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion
of Counsel;
c. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
provided, however, that nothing contained herein shall relieve the Trustee
of the obligations, upon the occurrence of an Event of Termination (which
has not been cured), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs;
d. Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing so to do by Holders of Certificates
evidencing, as to any Class, Percentage Interests representing 25% or more;
provided,
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however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by the Servicer or, if paid
by the Trustee, shall be reimbursed by the Servicer upon demand; and
e. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions
of such agents, attorneys or custodians if appointed by it with due care
hereunder.
SECTION 11.03. Trustee Not Liable for Certificates or Contracts.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein or in the Certificates (other than the Trustee's execution
thereof). The Trustee makes no representations as to the validity or sufficiency
of this Agreement, of the Certificates (other than its execution thereof) or of
any Contract, Contract File, Land-and-Home Contract File or related document.
The Trustee shall not be accountable for the use or application by the Servicer,
the Originator or the Seller of funds paid to the Originator or the Seller, as
applicable, in consideration of conveyance of the Contracts to the Trust by the
Originator and the Seller or deposited into or withdrawn from the Certificate
Account by the Servicer.
SECTION 11.04. Rights of Certificateholders to Direct Trustee and to Waive
Event of Termination.
Holders of Class A Certificates, Holders of Class M Certificates and
Holders of Class B Certificates evidencing, as to each such Class, Percentage
Interests representing 25% or more shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that, subject to Section 11.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceedings so directed would be illegal or involve
it in personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided further that
nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders; and provided further that the Trustee shall
instead follow the directions of Holders of Class A Certificates, Holders of
Class M Certificates and Holders of Class B Certificates evidencing, as to each
such Class, Percentage Interests aggregating 51% or more whenever it receives
conflicting directions from Class A Certificateholders, Class M
Certificateholders and Class B Certificateholders. Holders of Class A
Certificates, Holders of Class M Certificates and Holders of Class B
Certificates evidencing, as to each such Class, Percentage Interests
representing 51% or more may on behalf of Certificateholders waive any past
Event of Termination hereunder and its consequences, except a default in respect
of a
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covenant or provision hereof which under Section 12.07 cannot be modified or
amended without the consent of all Certificateholders, and upon any such waiver,
such Event of Termination shall cease to exist and shall be deemed to have been
cured for every purpose of this Agreement; but no such waiver shall extend to
any subsequent or other Event of Termination or impair any right consequent
thereon. Following the Class M-2 Cross-Over Date, if all distributions payable
to the Class A Certificateholders and the Class M Certificateholders have either
been made or provided for in accordance with this Agreement, then the Holders of
Class B-1 Certificates may exercise the rights given to the Class A
Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section. Following the Class B-1 Cross-Over Date,
if all distributions payable to the Class A Certificateholders and the Class M
Certificateholders have either been made or provided for in accordance with this
Agreement, then the Holders of Class B-2 Certificates may exercise the rights
given to the Class A Certificateholders, the Class M Certificateholders and
Class B-1 Certificateholders under this Section.
SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses.
The Servicer agrees:
a. to pay to the Trustee reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) including the services provided in connection with any auctions
pursuant to Section 8.05(e);
b. except as otherwise expressly provided herein, to reimburse the
Trustee, to the extent requested by the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel,
and reasonable compensation expenses and disbursements in connection with
any auctions pursuant to Section 8.05(e)), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
c. to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust and its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
All such payments by the Servicer shall be made from its own funds. The
covenants in this Section 11.05 shall be for the benefit of the Trustee in its
capacities as Trustee, Paying Agent and Certificate Registrar hereunder, and
shall survive the termination of this Agreement.
SECTION 11.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any State, authorized under such laws to exercise corporate trust powers and a
Title I approved lender pursuant to FHA Regulations,
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shall not be an Affiliate of the Originator, and shall have a combined capital
and surplus of at least $50,000,000 or shall be a member of a bank holding
system the aggregate combined capital and surplus of which is $50,000,000,
provided that the Trustee's separate capital and surplus shall at all times be
at least the amount required by Section 310(a)(2) of the Trust Indenture Act of
1939, as amended. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of a supervising or examining
authority, then for the purposes of this Section 11.06, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In addition, the
Trustee shall at all times have a long-term deposit rating (or, if the Trustee
is a wholly owned subsidiary of a bank holding company system and not rated, the
bank holding company shall have a long-term senior unsecured debt rating) from
Standard & Poor's of at least BBB, a rating from Fitch (if rated by Fitch) of at
least BBB and a rating from Moody's (if rated by Moody's) of at least Baa3, or
as shall be otherwise acceptable to Moody's and Fitch. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
SECTION 11.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Servicer and the Originator. A
copy of any such notice shall be sent to Fitch and Moody's. Upon receiving such
notice of resignation, the Originator shall promptly appoint a successor Trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to each of the Servicer and the Originator and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
shall have accepted appointment within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.06 and shall fail to resign after written request
therefor by the Originator, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Originator may
remove the Trustee. If the Originator shall have removed the Trustee under the
authority of the immediately preceding sentence, the Originator shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.08.
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<PAGE>
SECTION 11.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 11.07 shall execute,
acknowledge and deliver to the Servicer, the Originator and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee. The
predecessor Trustee shall deliver or cause to be delivered to the successor
Trustee the Contracts, Contract Files and Land-and-Home Contract Files and any
related documents and statements held by it hereunder; and, if the Land-and-Home
Contract Files are then held by a custodian pursuant to a custodial agreement,
the predecessor Trustee and the custodian shall amend such custodial agreement
to make the successor Trustee the successor to the predecessor Trustee
thereunder; and the Servicer, the Originator and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
11.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 11.08, the Servicer shall cause notice of the succession of such Trustee
hereunder to be mailed to each Certificateholder at their addresses as shown in
the Certificate Register. If the Servicer fails to mail such notice within ten
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 11.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such Person shall be eligible under the provisions
of Section 11.06, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Trustee shall promptly notify Fitch and Moody's in the
event it is a party to any merger, conversion or consolidation.
SECTION 11.10. Tax Returns.
Upon the Servicer's request, the Trustee will furnish the Servicer with all
such information as the Servicer may reasonably require in connection with
preparing all tax returns of the Subsidiary REMIC and the Master REMIC and the
Trustee shall execute such returns.
11-6
<PAGE>
SECTION 11.11. Obligor Claims.
In connection with any offset defenses, or affirmative claims for recovery,
asserted in legal actions brought by Obligors under one or more Contracts based
upon provisions therein complying with, or upon other rights or remedies arising
from, any legal requirements applicable to the Contracts, including, without
limitation, the Federal Trade Commission's Trade Regulation Rule Concerning
Preservation of Consumers' Claims and Defenses (16 C.F.R. ss. 433) as amended
from time to time:
a. The Trustee is not, and shall not be deemed to be, either in any
individual capacity, as trustee hereunder or otherwise, a creditor, or a
joint venturer with or an Affiliate of, or acting in concert or cooperation
with, any seller of home improvements, in the arrangement, origination or
making of Contracts. The Trustee is the holder of the Contracts only as
trustee on behalf of the Certificateholders, and not as a principal or in
any individual or personal capacity;
b. The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments, pursuant to such legal actions;
c. The Trustee will pay, solely from available Trust monies,
affirmative claims for recovery by Obligors only pursuant to final judicial
orders or judgments, or judicially approved settlement agreements,
resulting from such legal actions;
d. The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors' legal
actions to recover affirmative claims against Certificateholders.
e. The Trustee will cooperate with and assist Certificateholders in
their defense of legal actions by Obligors to recover affirmative claims if
such cooperation and assistance is not contrary to the interests of the
Trustee as a party to such legal actions and if the Trustee is
satisfactorily indemnified for all liability, costs and expenses arising
therefrom; and
f. The Originator hereby agrees to indemnify, hold harmless and defend
the Trustee, Certificateholders from and against any and all liability,
loss, costs and expenses of the Trustee, Certificateholders resulting from
any affirmative claims for recovery asserted or collected by Obligors under
the Contracts. Notwithstanding any other provision of this Agreement, the
obligation of the Originator under this Section 11.11(f) shall not
terminate upon a Service Transfer pursuant to Article VII.
SECTION 11.12. Appointment of Co-Trustee or Separate Trustee.
The Originator shall have the power from time to time to appoint one or
more persons or corporations to act either as co-trustees jointly with the
Trustee, or as separate trustees, or as custodians, for the purpose of
conforming to any legal requirement, restriction or condition
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(i) with respect to the holding of the Contracts, the Contract Files and the
Land-and-Home Contract Files or (ii) with respect to the enforcement of a
Contract in any state in which a Manufactured Home is located or in any state in
which any portion of the Trust is located. The separate trustees, co-trustees,
or custodians so appointed shall be trustees or custodians for the benefit of
all Certificateholders and shall, subject to the provisions of the following
paragraph, have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee.
Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(A) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of monies shall be
exercised solely by the Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee, to the extent also imposed upon such separate
trustees, co-trustees or custod ians, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee,
co-trustee, or custodian jointly, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including holding of the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee,
co-trustee, or custodian;
(C) no separate trustee, co-trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other separate
trustee, co-trustee or custodian hereunder; and
(D) the Company may at any time accept the resignation of or remove
any separate trustee, co-trustee or custodian, so appointed by it.
If any separate trustee, co-trustee or custodian shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Servicer if
and only to the extent the Servicer shall have consented in writing to his or
its appointment, which consent shall not be unreasonably withheld.
SECTION 11.13. Agents of Trustee.
To the extent not prohibited by law and not inconsistent with the terms of
this Agreement (including, without limitation, Section 11.12), the Trustee may,
with the prior consent of the
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Originator, appoint one or more agents to carry out ministerial matters on
behalf of the Trustee under this Agreement.
11-9
<PAGE>
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Servicer Not to Assign Duties or Resign; Delegation of
Servicing Functions.
The Servicer may not sell or assign its rights and duties as Servicer
hereunder, except as expressly provided for herein, provided that the Servicer
may pledge or assign the right to receive all or any portion of the Monthly
Servicing Fee payable to it. The Servicer shall not resign from the obligations
and duties hereby imposed on it except upon determination that the performance
of its duties hereunder is no longer permissible under applicable law or is in
material conflict by reason of applicable law with any other activities carried
on by it. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel for the Servicer to such effect
addressed and delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Sections
7.02 and 7.03.
Notwithstanding the foregoing:
a. Any person into which the Servicer may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation
to which the Servicer shall be a party, or any Person succeeding to the
business of the Servicer, shall be the successor of the Servicer hereunder,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person
to the Servicer shall satisfy the criteria set forth in the definition of
an Eligible Servicer. The Servicer shall promptly notify Fitch and Moody's
of any such merger to which it is a party.
b. Conseco Finance Corp., if it is the Servicer, may delegate some or
all of its servicing duties to a wholly owned subsidiary of Conseco Finance
Corp., for so long as said subsidiary remains, directly or indirectly, a
wholly owned subsidiary of Conseco Finance Corp. Notwithstanding any such
delegation Conseco Finance Corp. shall retain all of the rights and
obligations of the Servicer hereunder.
SECTION 12.02. Maintenance of Office or Agency.
The Trustee will maintain in St. Paul, Minnesota, an office or agency where
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served. On the date hereof the Trustee's office for
such purposes is located at 180 East Fifth Street, St. Paul, Minnesota 55101
Attention: Tamara Schultz-Fugh. 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.
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SECTION 12.03. Termination.
a. This Agreement shall terminate (after distribution of all amounts due to
Certificateholders pursuant to Sections 8.01 and 8.03) on the earlier of (a) the
Remittance Date on which the Pool Scheduled Principal Balance is reduced to zero
and all amounts payable to Certificateholders on such Remittance Date have been
distributed to Certificateholders or (b) the Remittance Date on which the Class
C Subisidiary Certificateholder purchases the Contracts pursuant to Section
8.05; provided, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof; and provided further, that
the Servicer's and the Originator's representations and warranties and
indemnities by the Originator and the Servicer shall survive termination.
b. Notice of any termination, specifying the Final Remittance Date (which
shall be a date that would otherwise be a Remittance Date) upon which all
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee (upon direction by the Originator ten days prior to the date such notice
is to be mailed) by letter to Fitch, Moody's and the Certificateholders mailed
no later than the fifth Business Day of the month of the Final Remittance Date
specifying (1) the Final Remittance Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee therein designated; (2) the amount of any such
final payment; and (3) 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. Any notice of purchase of Contracts by the Originator or the Servicer
pursuant to Section 8.05 shall constitute the adoption by the Trustee on behalf
of the Certificateholders of a plan of complete liquidation of the Subsidiary
REMIC and the Master REMIC within the meaning of Section 860F of the Code on the
date such notice is given when signed by the Trustee. Each such notice shall, to
the extent required by the REMIC Provisions or other applicable law, be signed
on behalf of the Subsidiary REMIC and the Master REMIC by the Trustee. The
Trustee shall give such notice to the Certificate Registrar at the time such
notice is given to the Certificateholders. In the event such notice is given in
connection with the sale of the Contracts pursuant to Section 8.05, the Class C
Subsidiary Certificateholder or the Trustee, as applicable, shall deposit in the
Certificate Account on the Final Remittance Date in immediately available funds
an amount equal to the above- described purchase price and upon such deposit
Certificateholders will be entitled to the amount of such purchase price but not
amounts in excess thereof, all as provided herein. Upon certification to the
Trustee by a Servicing Officer, following such final deposit the Trustee shall
promptly release to the purchaser of the Contracts pursuant to Section 8.05 the
Contract Files for the remaining Contracts, and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer.
c. Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed from the Certificate Account, in the following order of
priority, to Certificateholders on the Final Remittance Date in proportion to
their respective Percentage Interests an amount equal to (i) as to Class A
Certificates, the Class A-1 Principal Balance, the Class A-2 Principal Balance,
the Class A-3 Principal Balance, the Class A-4 Principal Balance, and the Class
A-5
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Principal Balance together with any Unpaid Class A Interest Shortfall and one
month's interest at the related Remittance Rate on the related Class,
respectively (calculated in the manner specified in Section 1.03), (ii) as to
Class M-1 Certificates, the Class M-1 Principal Balance together with any Unpaid
Class M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest
Shortfall and one month's interest at the Class M-1 Remittance Rate on the Class
M-1 Principal Balance, (iii) as to Class M-2 Certificates, the Class M-2
Principal Balance together with any Unpaid Class M-2 Interest Shortfall, any
Unpaid Class M-2 Liquidation Loss Interest Shortfall and one month's interest at
the Class M-2 Remittance Rate on the Class M-2 Principal Balance, (iv) as to
Class B-1 Certificates, the Class B-1 Principal Balance together with any Unpaid
Class B-1 Interest Shortfall, any Unpaid Class B-1 Liquidation Loss Interest
Shortfall and one month's interest at the Class B-1 Remittance Rate on the Class
B-1 Principal Balance, (v) as to Class B-2 Certificates, the Class B-2 Principal
Balance together with any Unpaid Class B-2 Interest Shortfall and one month's
interest at the Class B-2 Remittance Rate on the Class B-2 Principal Balance,
(vi) as to Class B-3I Certificates, any Unpaid Class B-3I Shortfall, and (vii)
as to Class C Master Certificates, the amount which remains on deposit in the
Certificate Account (other than amounts retained to meet claims) after
application pursuant to clauses (i)-(vi) above; provided that any Guarantee
Payment deposited in the Certificate Account shall be distributed only to the
Class B-2 Certificateholders. The distribution on the Final Remittance Date
shall be in lieu of the distribution otherwise required to be made on such
Remittance Date in respect of each Class of Certificates.
d. In the event that all of the Certificateholders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Originator shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
three months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Originator shall transfer to itself all
amounts remaining on deposit in the Certificate Account, to hold in trust for
Certificateholders who have not surrendered their Certificates for cancellation,
together with the final record list of Certificateholders, and the Originator
shall take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain in trust hereunder.
e. Each Certificateholder hereby irrevocably approves and appoints the
Trustee as its attorney-in-fact for the purposes of adoption of the plan of
complete liquidation.
SECTION 12.04. Acts of Certificateholders.
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver or
other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates of the specified Class or Classes evidencing, as
to each such Class, Percentage Interests aggregating 51% or more.
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<PAGE>
b. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where required, to the Servicer. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and (subject to Section 11.01)
conclusive in favor of the Trustee, the Servicer and the Originator if made in
the manner provided in this Section.
c. The fact and date of the execution by any Certificateholder of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
d. The ownership of Certificates shall be proved by the Certificate
Register.
e. Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind every holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done by the Trustee,
the Servicer or the Originator in reliance thereon, whether or not notation of
such action is made upon such Security.
f. The Trustee may require such additional proof of any matter referred to
in this Section as it shall deem necessary.
SECTION 12.05. Calculations.
Except as otherwise provided in this Agreement, all interest rate and basis
point calculations under this Agreement will be made on the basis of a 360-day
year and twelve 30-day months and will be carried out to at least three decimal
places.
SECTION 12.06. Assignment or Delegation by Originator.
Except as specifically authorized hereunder, and except for its obligations
as Servicer which are dealt with under Article V and Article VII, the Originator
may not convey and assign or delegate any of its rights or obligations hereunder
absent the prior written consent of Holders of Certificates of each Class
evidencing, as to each such Class, Percentage Interests aggregating 66 2/3% or
more, and any attempt to do so without such consent shall be void. It is
understood that the foregoing does not prohibit the pledge or assignment by the
Originator of any right to payment pursuant to Article VIII.
Notwithstanding the foregoing, any person into which the Originator may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Originator shall be a party, or any Person
succeeding to the business of the Originator, shall be the successor of the
Originator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary
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<PAGE>
notwithstanding. The Originator shall promptly notify Fitch and Moody's of any
such merger to which it is a party.
SECTION 12.07. Amendment.
a. This Agreement may be amended from time to time by the Originator, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to correct manifest error, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, as
the case may be, to make such changes as are necessary to maintain the status of
each of the Subsidiary REMIC and the Master REMIC as a "real estate mortgage
investment conduit" under the REMIC Provisions of the Code or to otherwise
effectuate the benefits of such status to the Subsidiary REMIC, the Master REMIC
and the Certificateholders, including, without limitation, to implement any
provision permitted by law that would enable a REMIC to avoid the imposition of
any tax, to add or amend any provision as required by Fitch, Moody's, or any
other nationally recognized statistical rating organization in order to improve
or maintain the rating of any Class of Class A Certificates, Class M
Certificates or Class B Certificates, or to make any other provisions with
respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel for the Company,
adversely affect in any material respect the interests of any Certificateholder.
b. This Agreement may also be amended from time to time by the Servicer,
the Originator and the Trustee, with the consent of Holders of Certificates of
each Class affected thereby evidencing, as to each such Class, Percentage
Interests aggregating 51% or more, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, collections of payments on the Contracts or distributions
which are required to be made on any Certificate, (b) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of the
holders of all Certificates then outstanding, (c) result in the disqualification
of either the Subsidiary REMIC or the Master REMIC as a REMIC under the Code,
(d) adversely affect the status of either the Subsidiary REMIC or the Master
REMIC as a REMIC or the status of the Regular Certificates as "regular
interests" in the Master REMIC or (e) cause any tax (other than any tax imposed
on "net income from foreclosure property" under Section 860G(c)(1) of the Code
that would be imposed without regard to such amendment) to be imposed on the
Trust, including, without limitation, any tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code. This Agreement may not
be amended without the consent of all Class C Certificateholders, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement which would modify in any manner the rights
of the Class C Certificateholders.
c. This Agreement shall not be amended under this Section without the
consent of 100% of Certificateholders if such amendment would result in the
disqualification of either Subsidiary REMIC or the Master REMIC as a REMIC under
the Code.
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d. Concurrently with the solicitation of any consent pursuant to this
Section 12.07, the Trustee shall furnish written notification to Fitch and
Moody's of such solicitation. Promptly after the execution of any amendment
pursuant to this Section 12.07, the Trustee shall furnish written notification
of the substance of such amendment to Fitch, Moody's and each Certificateholder.
e. It shall not be necessary for the consent of Certificateholders under
this Section 12.07 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
f. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
g. In connection with any amendment pursuant to this Section, the Trustee
shall be entitled to receive an unqualified Opinion of Counsel to the Servicer
to the effect that such amendment is authorized or permitted by the Agreement.
h. In the absence of the consent described in subsection (c) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an unqualified Opinion of Counsel, the expense of which
shall not be an expense of the Trust, stating that any such amendment (i) will
not adversely affect the status of the Subsidiary REMIC or the Master REMIC as a
REMIC or the status of the Regular Certificates as "regular interests" in the
Master REMIC, and (ii) will not cause any tax (other than any tax imposed on
"net income from foreclosure property" under Section 860G(c)(1) of the Code that
would be imposed without regard to such amendment) to be imposed on the Trust,
including, without limitation, any tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after the startup
date" under Section 860G(d)(1) of the Code.
i. Upon the execution of any amendment or consent pursuant to this Section
12.07, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part of this Agreement for all purposes, and
every Certificateholder hereunder shall be bound thereby.
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SECTION 12.08. Notices.
All communications and notices pursuant hereto to the Servicer, the
Originator and the Trustee shall be in writing and delivered or mailed to it at
the appropriate following address:
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the Originator, the Guarantor:
Conseco Finance Corp.
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the Trustee:
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Tamara Schultz-Fugh
Telecopier Number: (651) 244-0089
If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Telecopier Number: (212) 968-8839
If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10004
Attention: Pramila Gupta
Telecopier Number: (212) 553-4392
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<PAGE>
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder shall
be in writing and delivered or mailed at the address shown in the Certificate
Register.
SECTION 12.09. Merger and Integration.
Except as specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except as
provided herein.
SECTION 12.10. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SECTION 12.11. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this 8th
day of February, 2000.
CONSECO FINANCE CORP.
By
-----------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By
-----------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but
solely as Trustee
By
-----------------------------------------
Laurie A. Howard
Vice President
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<PAGE>
EXHIBIT A
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
Class A-[1][2][3][4][5] No.
(Senior)
Cut-off Date: as defined in the Remittance Rate: ____%
Pooling and Servicing Agreement
dated as of February 1, 2000
First Remittance Date: Denomination: $___________
April 3, 2000
Aggregate Denomination of
Servicer: All Class A-[1][2][3][4][5]
Conseco Finance Corp. Certificates: $___________
Maturity Date: March 1, 2031
(or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2000-1, CLASS A-[1][2][3][4][5](SENIOR)
----------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2000-1 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
A-1
<PAGE>
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date or Subsequent Cut-off Date). The Trust has been created pursuant to
a Pooling and Servicing Agreement (the "Agreement"), dated as of February 1,
2000, among Conseco Finance Corp., as Originator, Servicer and Guarantor (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Certificate is one of the Certificates described in the Agreement and is
issued pursuant and subject to the Agreement. By acceptance of this Certificate
the holder assents to and becomes bound by the Agreement. To the extent not
defined herein, all capitalized terms have the meanings assigned to such terms
in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in April, 2000, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class of Class A Certificates with an aggregate Percentage Interest of at
least 5% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the portion of the Class A
Distribution Amount to be distributed to such Class of Class A Certificates. The
Maturity Date of this Certificate is March 1, 2031 or the next succeeding
Business Day if such March 1 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer,
A-2
<PAGE>
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2000-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2000-1
By U.S. BANK NATIONAL ASSOCIATION
By
-----------------------------------
Authorized Signatory
A-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By
----------------------------------
Signature
A-5
<PAGE>
EXHIBIT B
FORM OF CLASS M-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND THE CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Remittance Rate: Floating Rate equal
Pooling and Servicing Agreement to the Weighted Average Contract Rate
dated as of February 1, 2000 (subject to a maximum of ______%)
First Remittance Date: Denomination: $_____________
April 3, 2000
Servicer: Aggregate Denomination of
Conseco Finance Corp. All Class M-[1][2] Certificates:
$___________________________
Maturity Date:
March 1, 2031
(or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2000-1, CLASS M-[1][2] (SUBORDINATE)
-------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
B-1
<PAGE>
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2000-1 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date or Subsequent Cut-off Date). The Trust has been created pursuant to
a Pooling and Servicing Agreement (the "Agreement"), dated as of February 1,
2000 among Conseco Finance Corp., as Originator, Servicer and Guarantor (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Certificate is one of the Certificates described in the Agreement and is
issued pursuant and subject to the Agreement. By acceptance of this Certificate
the holder assents to and becomes bound by the Agreement. To the extent not
defined herein, all capitalized terms have the meanings assigned to such terms
in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in April 2000, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class M-[1][2] Certificate with an aggregate Percentage Interest of at least
5% and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [M-1/M-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is March
1, 2031 or the next succeeding Business Day if such March 1 is not a Business
Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly
B-2
<PAGE>
authorized in writing, and thereupon one or more new Certificates evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2000-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2000-1
By U.S. BANK NATIONAL ASSOCIATION
By
-------------------------------------
Authorized Signatory
B-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint _____________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By
--------------------------------------
Signature
B-5
<PAGE>
EXHIBIT C-1
FORM OF CLASS B-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE Class A
CERTIFICATES, THE CLASS M-1 CERTIFICATES [,] [AND] THE CLASS M-2 CERTIFICATES
[AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
Class B-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Remittance Rate: Floating Rate equal
Pooling and Servicing Agreement to the Weighted Average Contract Rate
dated as of February 1, 2000 (subject to a maximum of ____%)
Denomination: $___________
First Remittance Date:
April 3, 2000 Aggregate Denomination of
All Class B-[1][2] Certificates:
Servicer: $_______________
Conseco Finance Corp.
Maturity Date: March 1, 2031
(or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2000-1, CLASS B-[1][2] (SUBORDINATE)
----------------------------------------------------------------------
C-1-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2000-1 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date or Subsequent Cut-off Date). The Trust has been created pursuant to
a Pooling and Servicing Agreement (the "Agreement"), dated as of February 1,
2000, among Conseco Finance Corp., as Originator, Servicer and Guarantor (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Certificate is one of the Certificates described in the Agreement and is
issued pursuant and subject to the Agreement. By acceptance of this Certificate
the holder assents to and becomes bound by the Agreement. To the extent not
defined herein, all capitalized terms have the meanings assigned to such terms
in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in April 3, 2000 so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class of Class B Certificates with an aggregate Percentage Interest of at
least 5% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [B-1/B-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is March
1, 2031, or the next succeeding Business Day if such March 1 is not a Business
Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account [and the Limited
Guarantee of Conseco Finance Corp.] to the extent available for distribution to
the Certificateholder as provided in the Agreement for payment hereunder and
that the Trustee in its individual capacity is not personally liable to the
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
C-1-2
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-1-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2000-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2000-1
By U.S. BANK NATIONAL ASSOCIATION
By
--------------------------------------
Authorized Officer
C-1-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By
--------------------------------------
Signature
C-1-5
<PAGE>
EXHIBIT C-2
FORM OF CLASS B-3I CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE Class A-1
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Class B-3I No. __
(Subordinate)
Cut-off Date: as defined in the Percentage Interest: _____%
Pooling and Servicing Agreement
dated as of February 1, 2000
Maturity Date:
First Remittance Date: March 1, 2031
April 3, 2000 (or if such day is not a
Business Day, then the next
succeeding Business Day)
Servicer:
Conseco Finance Corp.
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2000-1, CLASS B-3I (SUBORDINATE)
------------------------------------------------------------------
C-2-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the undivided Percentage Interest set forth above in Manufactured Housing
Contract Senior/Subordinate Pass- Through Certificate Trust 2000-1 (the
"Trust"), which includes among its assets a pool of manufactured housing
installment sale contracts and installment loan agreements (including, without
limitation, all related security interests and any and all rights to receive
payments which are due pursuant thereto after the applicable Cut-off Date or
Subsequent Cut-off Date). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of February 1, 2000, among
Conseco Finance Corp., as Originator, Servicer and Guarantor (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller"), and U.S. Bank
National Association, as Trustee of the Trust (the "Trustee"). This Certificate
is one of the Certificates described in the Agreement and is issued pursuant and
subject to the Agreement. By acceptance of this Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each related Due Period commencing in April 2000 so long
as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-3I Certificates with an aggregate Percentage
Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the Class B-3I Distribution Amount for such Remittance Date. The
Maturity Date of this Certificate is March 1, 2031 or the next succeeding
Business Day if such March 1 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
C-2-2
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-2-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2000-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2000-1
By U.S. BANK NATIONAL ASSOCIATION
By
--------------------------------------
Authorized Officer
C-2-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By
--------------------------------------
Signature
C-2-5
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of February 1, 2000 among Conseco Finance Corp., as Originator,
Servicer and Guarantor (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller") and U.S. Bank National Association, as Trustee
(the "Trustee"), the Seller does hereby transfer, assign, set over and otherwise
convey to the Trustee (i) all the right, title and interest of the Seller in and
to the Contracts, including, without limitation, all right, title and interest
in and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than principal and interest due on the Contracts
on or before the applicable Cut-off Date or Subsequent Cut-off Date), (ii) all
rights under every Hazard Insurance Policy relating to a Manufactured Home
securing a Contract for the benefit of the creditor of such Contract, (iii) all
rights under all FHA/VA Regulations pertaining to any Contract that is an FHA/VA
Contract, (iv) all rights of the Seller under the Transfer Agreement, (v) the
proceeds from the Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (vi) all documents contained in the Contract Files and the
Land-and-Home Contract Files, (vii) an amount equal to the difference between
the aggregate Cut-off Date Principal Balances of the Staged-Funding Contracts
and the principal balance of the Staged-Funding Contracts as of the Closing Date
paid by the underwriters of the Certificates to the Trust by order of the Seller
out of the proceeds of the sale of the Certificates, (viii) amounts on deposit
in the Capitalized Interest Account and in the Pre-Funding Account, and (ix) all
proceeds and products in any way derived from any of the foregoing. Capitalized
terms used herein but not defined herein have the meanings assigned to them in
the Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this ___ day of February, 2000.
CONSECO FINANCE SECURITIZATIONS CORP.
By
--------------------------------------
[Name]
[Title]
D-1
<PAGE>
EXHIBIT E
FORM OF CERTIFICATE OF OFFICER
[CONSECO FINANCE CORP.]
[CONSECO FINANCE SECURITIZATIONS CORP.]
OFFICER'S CERTIFICATE
We, ______________ and ______________, hereby certify that we are the duly
elected _________________ and ______________, respectively, of [Conseco Finance
Corp. ("Conseco Finance")] [Conseco Finance Securitizations Corp. ("Conseco
Securitizations")], and that as such we are duly authorized to execute and
deliver this Certificate on behalf of [Conseco Finance] [Conseco
Securitizations] in connection with the Pooling and Servicing Agreement, dated
as of February 1, 2000 (the "Pooling and Servicing Agreement") among Conseco
Finance Corp., Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee, and the Underwriting Agreement relating to the Class A,
Class M-1, Class M-2 and Class B Certificates, dated January 19, 2000, (the
"Underwriting Agreement"), among Conseco Finance Corp., Conseco Finance
Securitizations Corp. and Lehman Brothers Inc., J.P. Morgan Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Prudential Securities
Incorporated (the "Underwriters") (all capitalized terms used herein without
definition having the respective meanings specified in the Pooling and Servicing
Agreement and the Underwriting Agreement) and further certify as follows:
1. Attached hereto as Exhibits I and II, respectively, are true and
correct copies of the [Certificate] [Articles] of Incorporation and
[Restated] Bylaws of [Conseco Finance] [Conseco Securitizations], together
with all amendments thereto, both of which are in full force and effect on
the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of [Conseco Finance] [Conseco Securitizations] are pending or
contemplated.
3. There is no litigation pending, or to our knowledge, threatened,
which, if determined adversely to [Conseco Finance] [Conseco
Securitizations], would affect adversely the sale of the Contracts, the
execution, delivery or enforceability of the Pooling and Servicing
Agreement, the Transfer Agreement and the Underwriting Agreement (the
"Transaction Documents")[, or the ability of Conseco Finance to service and
administer the Contracts in accordance with the terms of the Pooling and
Servicing Agreement].
4. Each person who, as an officer or representative of [Conseco
Finance] [Conseco Securitizations], signed the Transaction Documents, or
any other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Contracts in accordance with
the Transaction Documents, was at the time of such signing and is as of the
date hereof duly elected or appointed, qualified and acting as such officer
or representative, and the signatures of such persons appearing on such
documents are their genuine signatures.
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5. Neither the execution and delivery by [Conseco Finance] [Conseco
Securitizations] of the Transaction Documents, nor its compliance with the
terms and provisions thereof, will conflict with, or result in a breach of,
any of the terms of, or constitute a default under, any judgment, order,
injunction or decree of any domestic court or governmental authority to
which [Conseco Finance] [Conseco Securitizations] is subject or any
indenture, agreement, contract or commitment to which [Conseco Finance]
[Conseco Securitizations] is a party or by which it is bound, which
conflict, breach or default presents a reasonable possibility of having a
materially adverse effect on the business or operations of [Conseco
Finance] [Conseco Securitizations]. No UCC-1 financing statements or
statements of assignment listing [Conseco Finance] [Conseco
Securitizations] as debtor and describing any of the Contracts as
collateral other than the UCC-1 financing statement in favor of the
Trustee, have been signed on behalf of [Conseco Finance] [Conseco
Securitizations] and filed by any person after ___________ and prior to the
date hereof.
6. Attached hereto as Exhibit IV is a certified true copy of the
resolutions of the Board of Directors of [Conseco Finance] [Conseco
Securitizations] (the "Resolutions") adopted with respect to the
authorization of [Conseco Finance] [Conseco Securitizations] to take such
actions and enter into such agreements as are necessary to sell and service
the Contracts in accordance with the Transaction Documents; said
resolutions have not been amended, modified, annulled or revoked and are in
full force and effect on the date hereof.
[7. The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did comply, and as of the date
hereof comply, in all material respects with the requirements of the
Securities Act of 1933, as amended (the "1933 Act") and the Regulations.
The Registration Statement, at the time it became effective did not, and as
of the date hereof does not, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus as
of the date thereof did not, and as of the date hereof does not, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in, or omissions from, the Registration Statement
or Prospectus made in reliance upon and in conformity with information
furnished to [Conseco Finance] [Conseco Securitizations] in writing by the
Underwriters expressly for use in the Registration Statement or Prospectus.
The conditions to the use by [Conseco Finance] [Conseco Securitizations] of
registration statement on Form S-3 under the 1933 Act, as set forth in the
General Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus. There are no contracts or
documents of [Conseco Finance] [Conseco Securitizations] which are required
to be filed as exhibits to the Registration Statement pursuant to the 1933
Act or the Regulations which have not been so filed.]
8. Each of the representations and warranties contained in [Sections
3.01 and 3.03 of the Pooling and Servicing Agreement] [Section 3.1 (other
than Section 3.1(a)) of the Transfer Agreement] and Section 1 of the
Underwriting Agreement is true and correct on and as of the date hereof.
[To the best of our knowledge, the representations and warranties of
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Conseco Finance contained in Section 3.1(a) of the Transfer Agreement are
true and correct on the date hereof.]
9. [Conseco Finance] [Conseco Securitizations] has complied with all
the agreements by which it is bound in connection with the transactions
contemplated by the Transaction Documents, and has satisfied all the
conditions on its part to be performed or satisfied prior to the Closing
Date in connection with the transactions contemplated by the Transaction
Documents.
10. The Transaction Documents have been duly executed by [Conseco
Finance] [Conseco Securitizations] pursuant to and in compliance with the
Resolutions.
11. No event with respect to [Conseco Finance] [Conseco
Securitizations] has occurred or is continuing which would constitute an
Event of Termination or an event that with notice or lapse of time or both
would become an Event of Termination under the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
February, 2000.
[CONSECO FINANCE CORP.]
By
--------------------------------------
[Name]
[Title]
[CONSECO FINANCE SECURITIZATIONS CORP.]
By
--------------------------------------
[Name]
[Title]
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EXHIBIT F
FORM OF OPINION OF COUNSEL
The opinion of Briggs and Morgan, Professional Association shall be to the
effect that undefined capitalized terms have the meanings set forth in the
Pooling and Servicing Agreement):
1. The Originator is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, with corporate power
to execute, deliver and perform its obligations under the Pooling and Servicing
Agreement, the Transfer Agreement and the Underwriting Agreement (collectively,
the "Transaction Documents") (including the Limited Guaranty contained in the
Pooling and Servicing Agreement). The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Minnesota,
with corporate power to execute, deliver and perform in its obligations under
the Transaction Documents.
2. The Transaction Documents (including the Limited Guaranty contained in
the Pooling and Servicing Agreement) have been duly authorized by all requisite
corporate action, duly executed and delivered by the Originator and the Seller,
and constitute the valid and binding obligations of the Originator and the
Seller enforceable in accordance with their terms. The Certificates have been
duly authorized by all requisite corporate action and, when duly and validly
executed by the Trustee in accordance with the Pooling and Servicing Agreement,
will be validly issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator or the Seller for the consummation of the transactions contemplated
by the Transaction Documents, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriters pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Contracts by the Originator to the Seller,
nor the assignment of the Originator's security interest on the related
Manufactured Homes, nor the issuance or sale of the Certificates, nor the
execution and delivery of the Transaction Documents, nor the consummation of any
other of the transactions contemplated in the Transaction Documents nor the
fulfillment of the terms of the Certificates or the Transaction Documents by the
Originator, will conflict with, or result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the Certificate of
Incorporation or Bylaws of the Originator or of any indenture or other agreement
or instrument known to us to which the Originator is a party or by which it is
bound, or result in a violation of, or contravene the terms of any statute,
order or regulation, applicable to the Originator, of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it.
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6. Neither the transfer of the Contracts by the Seller to the Trustee
acting on behalf of the Trust, nor the assignment of the Seller's security
interest on the related Manufactured Homes, nor the issuance or sale of the
Certificates, nor the execution and delivery of the Transaction Documents, nor
the consummation of any other of the transactions contemplated in the
Transaction Documents, nor the fulfillment of the terms of the Certificates or
the Transaction Documents by the Seller, will conflict with, or result in a
breach, violation or acceleration of, or constitute a default under, any term or
provision of the Articles of Incorporation or Bylaws of the Seller or of any
indenture or other agreement or instrument known to us to which the Seller is a
party or by which it is bound, or result in a violation of, or contravene the
terms of any statute, order or regulation, applicable to the Seller, of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it.
7. There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Originator or the Seller before any court, administrative agency or other
tribunal (A) asserting the invalidity of the Transaction Documents, the
Certificates, the hazard or flood insurance policies applicable to any Contracts
or the Errors and Omissions Protection Policy, (B) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) which is likely materially and
adversely to affect the performance by the Originator or the Seller of its
obligations under, or the validity or enforceability of, the Transaction
Documents or the Certificates, or (D) seeking adversely to affect the federal
income tax attributes of the Certificates described in the Prospectus and the
Prospectus Supplement under the heading "Federal Income Tax Consequences."
8. The transfer of the Initial and Additional Contracts to the Trust in
accordance with Section 2.01 of the Pooling and Servicing Agreement would not be
avoidable as a preferential transfer under Section 547 of the United States
Bankruptcy Code (11 U.S.C. ss. 547), as in effect on the date hereof, in the
event that the Originator became a debtor under the United States Bankruptcy
Code.
9. Pursuant to the Transfer Agreement the Originator has transferred to the
Seller all of the Originator's right, title and interest in the Contracts, free
and clear of any and all other assignments, encumbrances, options, rights,
claims, liens or security interests (except tax or possessory liens) that may
affect the right of the Seller in and to such Contracts, and has delivered the
Land-and-Home contract Files to the Trustee (as the Seller's designee) or its
custodian. No filing or other action, other than the filing of a financing
statement on Form UCC-1 with the Secretary of State of the State of Minnesota
identifying the Contracts as collateral and naming the Originator as debtor and
the Seller as secured party, and the filing of continuation statements as
required by the Transfer Agreement, is necessary to perfect as against third
parties the assignment of the Contracts by the Originator to the Seller. We have
separately provided you with our opinion concerning whether such assignment
could be recharacterized as a pledge rather than a sale in the event the
Originator became a debtor under the United States Bankruptcy Code. However, in
the event such assignment were recharacterized as a pledge securing a loan from
the Seller to the Originator, it is our opinion that the Seller would be deemed
to have a valid and perfected security interest in the Initial and Additional
Contracts and the proceeds thereof, which security interest would be prior to
any other security interest that may be perfected under the Uniform Commercial
Code as in effect
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in the State of Minnesota and over any "lien creditor" (as defined in Minn.
Stat. ss.336.9-301(3)) who becomes such after the Closing Date, except that a
subsequent purchaser of any Contract who gives new value and takes possession
thereof in the ordinary course of his business would have priority over the
Seller's security interest in such Contracts, if such purchaser acts without
knowledge that such Contract was subject to a security interest. We have assumed
for the purposes of this opinion that during the term of the Pooling and
Servicing Agreement the Trustee, or its custodian, shall maintain possession of
the Land-and-Home Contract Files for the purpose of perfecting the assignment to
the Seller of the Contracts. We express no opinion with respect to the
enforceability of any individual Contract or the existence of any claims, rights
or other matters in favor of any Obligor.
10. Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the Seller's
right, title and interest in the Contracts, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Contracts, and has delivered the Land-and-Home Contract Files to the
Trustee or its custodian. No filing or other action, other than the filing of a
financing statement on Form UCC-1 with the Secretary of State of the State of
Minnesota identifying the Contracts as collateral and naming the Seller as
debtor and the Trustee as secured party, and the filing of continuation
statements as required by the Pooling and Servicing Agreement, is necessary to
perfect as against third parties the assignment of the Contracts by the Seller
to the Trustee. We have separately provided you with our opinion concerning
whether such assignment could be recharacterized as a pledge rather than a sale
in the event the Seller became a debtor under the United States Bankruptcy Code.
However, in the event such assignment were recharacterized as a pledge securing
a loan from the Certificateholders to the Seller, it is our opinion that the
Trustee would be deemed to have a valid and perfected security interest in the
Contracts and the proceeds thereof, which security interest would be prior to
any other security interest that may be perfected under the Uniform Commercial
Code as in effect in the State of Minnesota and over any "lien creditor" (as
defined in Minn. Stat. ss.336.9-301(3)) who becomes such after the Closing Date,
except that a subsequent purchaser of any Contract, who gives new value and
takes possession thereof in the ordinary course of his business would have
priority over the Trustee's security interest in such Contract, if such
purchaser acts without knowledge that such Loan was subject to a security
interest. We have assumed for the purposes of this opinion that during the term
of the Pooling and Servicing Agreement the Trustee, or its custodian, shall
maintain possession of the Land-and-Home Contract Files for the purpose of
perfecting the assignment to the Trustee of the Contracts. We express no opinion
with respect to the enforceability of any individual Contract or the existence
of any claims, rights or other matters in favor of any Obligor.
11. In reliance upon certain representations and warranties set forth in
the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing on behalf of each of the Master REMIC and Subsidiary REMIC
of a proper election to be taxed as a REMIC, as of the date hereof the Master
REMIC and Subsidiary REMIC created pursuant to the Pooling and Servicing
Agreement will each qualify as a REMIC. Further, the Regular Certificates will
evidence ownership of the "regular interests" in the Master REMIC and the Class
C Master Certificates and Class C Subsidiary Certificates will evidence
ownership of the single class of "residual interest" in the Master REMIC and
Subsidiary REMIC respectively. For Minnesota income and franchise tax purposes,
and subject
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to the foregoing assumptions, and the provisions of Minnesota law as of the date
hereof, the Trust (excluding the Capitalized Interest Account and the
Pre-Funding Account) will not be subject to tax and the income of the Trust will
be taxable to the holders of interests therein, all in accordance with the
provisions of the Code concerning REMICs. Moreover, ownership of Certificates
will not be a factor in determining whether such owner is subject to Minnesota
income and franchise taxes. Therefore, if the owner of Certificates is not
otherwise subject to Minnesota income or franchise taxes in the State of
Minnesota, such owner will not become subject to such Minnesota taxes solely by
virtue of owning Certificates.
12. The transfer of the Initial and Additional Contracts and the proceeds
thereof by the Originator to the Seller on the date hereof pursuant to the
Transfer Agreement would not be avoidable as a fraudulent transfer under the
Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Originator become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.
13. The transfer of the Initial and Additional Contracts and the proceeds
thereof by the Seller to the Trustee on the date hereof pursuant to the Pooling
and Servicing Agreement would not be avoidable as a fraudulent transfer under
the Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Seller become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.
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EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGMENT
U.S. Bank National Association, a national banking association, acting as
trustee (the "Trustee") of the trust created pursuant to the Pooling and
Servicing Agreement, dated as of February 1, 2000, among Conseco Finance Corp.
(the "Originator"), Conseco Finance Securitizations Corp. (the "Seller") and the
Trustee (the "Pooling and Servicing Agreement") (all capitalized terms used
herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement), acknowledges, pursuant to Section 2.03 of the
Pooling and Servicing Agreement, that the Trustee has received and holds in
trust thereunder the following (i) all right, title and interest in and to the
manufactured housing contracts identified on the List of Contracts [delivered
pursuant to Section 2.02(a) of the Pooling and Servicing Agreement] [delivered
with the Subsequent Transfer Instrument of even date herewith] (the
"Contracts"), including, without limitation, all right, title and interest in
and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than the principal and interest due on the
Contracts on or before the applicable [Subsequent] Cut-off Date), (ii) all
rights under every Hazard Insurance Policy relating to a Manufactured Home
securing a Contract for the benefit of the creditor of such Contract, (iii) all
rights under all FHA/VA Regulations pertaining to any FHA/VA Contract, (iv) the
proceeds from the Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (v) all rights of the Seller under the Transfer Agreement,
(vi) all documents contained in the Contract Files and the Land-and-Home
Contract Files, [(vii) $ ____________ paid by the underwriters of the
Certificates to the Trust by order of the Seller pursuant to Section 2.01(b) of
the Pooling and Servicing Agreement out of the proceeds of the sale of the
Certificates,] (viii) amounts on deposit in the Capitalized Interest Account and
the Pre- Funding Account and (ix) all proceeds and products in any way derived
from any of the foregoing.
The Trustee further acknowledges that the Trustee, directly or through a
custodian, will hold said rights, interests and proceeds in trust for the use
and benefit of all Certificateholders.
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IN WITNESS WHEREOF, U.S. Bank National Association, as Trustee, has caused
this acknowledgment to be executed by its duly authorized officer as of the ___
day of February, 2000
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
--------------------------------------
Name: Laurie A. Howard
Title: Vice President
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EXHIBIT H
FORM OF CUSTODIAN'S ACKNOWLEDGMENT
U.S. Bank Trust National Association, a national banking association (the
"Custodian") acting as Custodian under a Custodial Agreement (the "Custodial
Agreement") dated as of February 1, 2000, between the Custodian and U.S. Bank
National Association, as Trustee (the "Trustee") under the Pooling and Servicing
Agreement dated as of February 1, 2000 among Conseco Finance Corp., as
Originator, Servicer and Guarantor (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and the Trustee, pursuant to
which the Custodian holds on behalf of the Trustee certain "Land-and-Home
Contract Files," as described in the Pooling and Servicing Agreement, hereby
acknowledges receipt of such Land-and-Home Contract Files, except as noted on
the exception list attached hereto. The Custodian further acknowledges that it
will, within 90 days of the date of the Custodial Agreement, conduct a cursory
review of the Land-and-Home Contract Files and confirm to the Trustee and the
Originator that each Land-and-Home Contract File includes (a) an original
executed copy of the Land-and-Home Contract, (b) an original or a copy of the
related Mortgage, (c) an assignment of the Land-and-Home Contract and the
related Mortgage from the originator (if other than the Originator) to the
Originator, (d) an endorsement of the Land-and-Home Contract by the Originator
to the Trustee or in blank, (e) an assignment of the related Mortgage to the
Trustee or in blank, and (f) any extension, modification or waiver agreement(s),
except as noted on the document exception listing to be attached to such
confirmation. The Custodian will not otherwise review the Contracts and
Land-and-Home Contract Files for compliance with the terms of the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused this
acknowledgment to be executed by its duly authorized officer as of the ___ day
of February, 2000.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By
--------------------------------------
Its
----------------------------------
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EXHIBIT I
FORM OF CERTIFICATE OF SERVICING OFFICER
CONSECO FINANCE CORP.
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 6.02 of the Pooling and Servicing Agreement (the "Agreement") dated as
of February 1, 2000 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Monthly Report for the period from ______________ to
_____________ attached to this certificate is complete and accurate in
accordance with the requirements of Sections 6.01 and 6.02 of the
Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature the ___ day
of _________, _____.
CONSECO FINANCE CORP.
By
--------------------------------------
[Name]
[Title]
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<PAGE>
EXHIBIT J
FORM OF CLASS C SUBSIDIARY CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE UNCERTIFICATED
SUBSIDIARY INTERESTS AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.
Class C Subsidiary No.
(Subordinate)
Cut-off Date: as defined in the Percentage Interest: _______
Pooling and Servicing Agreement
dated as of February 1, 2000
First Remittance Date:
April 3, 2000
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
------------------------------------------------
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PASS-THROUGH CERTIFICATES, SERIES 2000-1, CLASS C SUBSIDIARY
------------------------------------------------------------
(RESIDUAL INTEREST)
-------------------
Cut-off Date Pool Principal Balance: $900,000,000
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the Residual Interest represented by this Certificate, and entitled to certain
distributions out of Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-1 (the "Trust"), which includes among its
assets a pool of manufactured housing installment sale contracts and installment
loan agreements (including, without limitation, all related security interests
and any and all rights to receive payments which are due pursuant thereto after
the applicable Cut-off Date or Subsequent Cut-off Date) (the "Contracts"). The
Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of February 1, 2000, among Conseco Finance Corp., as
Originator, Servicer and Guarantor (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Class C Subsidiary
Certificate is one of the Class C Subsidiary Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Class C Subsidiary Certificate the holder assents to and becomes bound by
the Agreement. To the extent not defined herein, all capitalized terms have the
meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in April 2000, so long as the
Agreement has not been terminated, by check (or, if such Class C Subsidiary
Certificateholder holds Class C Subsidiary Certificates with an aggregate
Percentage Interest of at least 20% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least ten days prior to such Remittance
Date) to the registered Class C Subsidiary Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C Subsidiary
Distribution Amount.
The Class C Subsidiary Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class C Subsidiary
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class C
Subsidiary Certificateholder for any amounts payable under this Certificate or
the Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class C Subsidiary Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class C
Certificateholder free of charge upon a written request to the Trustee.
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As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Subsidiary Certificate is registrable in
the Certificate Register of the Certificate Registrar upon surrender of this
Class C Subsidiary Certificate for registration of transfer at the office or
agency maintained by the Trustee in St. Paul, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, and thereupon one or more new Class C Subsidiary
Certificates evidencing the same aggregate amount of Class C Subsidiary
Certificates will be issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, this Class C Subsidiary Certificate is exchangeable for new Class C
Subsidiary Certificates of authorized denominations evidencing the same
aggregate Percentage Interest as requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C Subsidiary Certificate is registered as the owner hereof
for all purposes, and neither the Originator, the Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The holder of this Class C Subsidiary Certificate, by acceptance hereof,
agrees that, in accordance with the requirements of Section 860D(b)(1) of the
Code, the federal tax return of the Trust for its first taxable year shall
provide that the Subsidiary REMIC elects to be treated as a "real estate
mortgage investment conduit" (a "REMIC") under the Code for such taxable year
and all subsequent taxable years. The Uncertificated Subsidiary Interests shall
be "regular interests" in the Subsidiary REMIC and the Class C Subsidiary
Certificates shall be the "residual interest" in the Subsidiary REMIC. In
addition, the holder of this Class C Subsidiary Certificate, by acceptance
hereof, (i) agrees to file tax returns consistent with and in accordance with
any elections, decisions or other reports made or filed with regard to federal,
state or local taxes on behalf of the Subsidiary REMIC, and (ii) agrees to
cooperate with the Originator in connection with examinations of the Subsidiary
REMIC's affairs by tax authorities, including administrative and judicial
proceedings, and (iii) makes the additional agreements, designations and
appointments, and undertakes the responsibilities, set forth in Section 6.06 of
the Agreement.
J-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2000-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2000-1
By U.S. BANK NATIONAL ASSOCIATION
By
---------------------------------------
Authorized Officer
J-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________ the within Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate, and does hereby irrevocably constitute and appoint
__________ Attorney to transfer the said certificate on the Certificate Register
maintained by the Trustee, with full power of substitution in the premises.
Dated: By
-------------------------------------
Signature
J-5
<PAGE>
EXHIBIT K
FORM OF CLASS C MASTER CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE Class A-1
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS
B-2 CERTIFICATES AND THE CLASS B-3I CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.
Class C Master No.
(Subordinate)
Cut-off Date: as defined in the Percentage Interest:
Pooling and Servicing Agreement
dated as of February 1, 2000
First Remittance Date:
April 3, 2000
K-1
<PAGE>
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2000-1, CLASS C MASTER
(RESIDUAL INTEREST)
---------------------------------------------------------
Cut-off Date Pool Principal Balance: $900,000,000
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the Residual Interest represented by this Certificate, and entitled to certain
distributions out of Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-1 (the "Trust"), which includes among its
assets a pool of manufactured housing installment sale contracts and installment
loan agreements (including, without limitation, all related security interests
and any and all rights to receive payments which are due pursuant thereto after
the applicable Cut-off Date or Subsequent Cut-off Date) (the "Contracts"). The
Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of February 1, 2000, among Conseco Finance Corp., as
Originator, Servicer and Guarantor (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Class C Master
Certificate is one of the Class C Master Certificates described in the Agreement
and is issued pursuant and subject to the Agreement. By acceptance of this Class
C Master Certificate the holder assents to and becomes bound by the Agreement.
To the extent not defined herein, all capitalized terms have the meanings
assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in April 2000, so long as the
Agreement has not been terminated, by check (or, if such Class C Master
Certificateholder holds Class C Master Certificates with an aggregate Percentage
Interest of at least 20% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least ten days prior to such Remittance
Date) to the registered Class C Master Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C Master
Distribution Amount.
The Class C Master Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class C Master
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class C
Master Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class C Master Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Class C Master
Certificateholder free of charge upon a written request to the Trustee.
K-2
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Master Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class C
Master Certificate for registration of transfer at the office or agency
maintained by the Trustee in St. Paul, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon one or more new Class C Master Certificates
evidencing the same aggregate amount of Class C Master Certificates will be
issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, this Class C Master Certificate is exchangeable for new Class C Master
Certificates of authorized denominations evidencing the same aggregate
Percentage Interest as requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C Master Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Servicer, the Trustee, the Paying
Agent, the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.
The holder of this Class C Master Certificate, by acceptance hereof, agrees
that, in accordance with the requirements of Section 860D(b)(1) of the Code, the
federal tax return of the Trust for its first taxable year shall provide that
the Master REMIC elects to be treated as a "real estate mortgage investment
conduit" (a "REMIC") under the Code for such taxable year and all subsequent
taxable years. The Regular Certificates shall be "regular interests" in the
Master REMIC and the Class C Master Certificates shall be the "residual
interest" in the Master REMIC. In addition, the holder of this Class C Master
Certificate, by acceptance hereof, (i) agrees to file tax returns consistent
with and in accordance with any elections, decisions or other reports made or
filed with regard to federal, state or local taxes on behalf of the Master
REMIC, and (ii) agrees to cooperate with the Originator in connection with
examinations of the Master REMIC's affairs by tax authorities, including
administrative and judicial proceedings, and (iii) makes the additional
agreements, designations and appointments, and undertakes the responsibilities,
set forth in Section 6.06 of the Agreement.
K-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2000-1 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2000-1
By U.S. BANK NATIONAL ASSOCIATION
By
-------------------------------------
Authorized Officer
K-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________ the within Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate, and does hereby irrevocably constitute and appoint
__________ Attorney to transfer the said certificate on the Certificate Register
maintained by the Trustee, with full power of substitution in the premises.
Dated: By
--------------------------------------
Signature
K-5
<PAGE>
EXHIBIT L-1
FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 3.06 of the Pooling and Servicing Agreement (the "Agreement"), dated as
of February 1, 2000 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Contracts on the attached schedule are to be repurchased by the
Company on the date hereof pursuant to Section 3.06 of the Agreement.
2. Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to Section 3.06 of the Agreement, be assigned by
the Trustee to the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
_______, ____.
CONSECO FINANCE CORP.
By
--------------------------------------
[Name]
[Title]
L-1-1
<PAGE>
EXHIBIT L-2
FORM OF CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
The undersigned certify that they are [title] and [title], respectively of
Conseco Finance Corp., a corporation organized under the laws of Delaware ("the
Company"), and that as such they are duly authorized to execute and deliver this
certificate on behalf of the Company pursuant to Section 3.06(b) of the Pooling
and Servicing Agreement (the "Agreement"), dated as of February 1, 2000 among
the Company, Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further certify
that:
1. The Contract and Contract File [or Land-and-Home Contract File, as
applicable] for each such Eligible Substitute Contract [are being held by
the Company, as Servicer] have been delivered to [the Trustee or its
Custodian] [_________, the successor Servicer].
2. The Contracts on the attached schedule are to be substituted on the
date hereof pursuant to Section 3.06(b) of the Agreement and each such
Contract is an Eligible Substitute Contract [description how the Contracts
satisfy the definition of "Eligible Substitute Contract"].
3. The UCC-1 financing statements in respect of the Contracts to be
substituted, in the form required by Section 3.06 (b)(iii) of the
Agreement, have been filed with the appropriate offices.
4. (x) the Company shall have delivered to the Trustee, or its
Custodian, the related Land-and-Home Contract Files; and
(y) if the sum of the aggregate principal balances of all
Land-and-Home Contracts then held by the Trustee (but excluding those
Land-and-Home Contracts, if any, that are to become Replaced Contracts
as a consequence of the substitution) and the aggregate principal
balances of all Land-and-Home Contracts that are included in the
Eligible Substitute Contracts equals or exceeds 10% of the Pool
Scheduled Principal Balance as of the Remittance Date immediately
preceding the substitution, the Company has delivered to the Trustee
an opinion of counsel satisfactory to the Trustee to the effect that
the Trustee holds a perfected first priority lien in the real estate
securing such Eligible Substitute Contracts, or evidence of
recordation of the assignment to the Trustee on behalf of the Trust of
(A) each Mortgage securing such Eligible Contracts or, if less (B) of
the number of Mortgages securing such Eligible Substitute Contracts
needed to reduce the aggregate principal balances of all Land-and-Home
Contracts with respect to which such assignments
L-2-1
<PAGE>
are not so recorded to less than 10% of the Pool Scheduled Principal
Balance as of the Remittance Date immediately preceding the
substitution.
5. There has been deposited in the Certificate Account the amounts
listed on the schedule attached hereto as the amount by which the Scheduled
Principal Balance of each Replaced Contract exceeds the Scheduled Principal
Balance of each Contract being substituted therefor.
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ___ day of
______ ____.
CONSECO FINANCE CORP.
By
--------------------------------------
[Name]
[Title]
L-2-2
<PAGE>
EXHIBIT M
FORM OF REPRESENTATION LETTER
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
RE: Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2000-1, Class [B-3I/C Subsidiary/C Master]
[The undersigned purchaser (the "Purchaser") understands that the purchase
of the above- referenced certificates (the "Certificates") may be made only by
institutions which are "Accredited Investors" under Regulation D, as promulgated
under the Securities Act of 1933, as amended (the "1933 Act"), which includes
banks, savings and loan associations, registered brokers and dealers, insurance
companies, investment companies, and organizations described in Section
501(c)(3) of the Internal Revenue Code, corporations, business trusts and
partnerships, not formed for the specific purpose of acquiring the Certificates
offered, with total assets in excess of $5,000,000. The undersigned represents
on behalf of the Purchaser that the Purchaser is an "Accredited Investor" within
the meaning of such definition. The Purchaser is urged to review carefully the
responses, representations and warranties it is making herein.]
Representations and Warranties
- ------------------------------
The Purchaser makes the following representations and warranties in order
to permit the Trustee, Conseco Finance Securitizations Corp., and [underwriter
of the Class B-3I/Class C Subsidiary/Class C Master Certificates] to determine
its suitability as a purchaser of Certificates and to determine that the
exemption from registration relied upon by Conseco Finance Securitizations Corp.
under Section 4(2) of the 1933 Act is available to it.
1. The Purchaser understands that the Certificates have not been and will
not be registered under the 1933 Act and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Conseco Finance
Securitizations Corp. is not required to register the Certificates and that any
transfer must comply with Section 9.02 of the Pooling and Servicing Agreement
relating to the Certificates.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
M-1
<PAGE>
3. [The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The Purchaser has reviewed
the Prospectus dated January 19, 2000 and related Prospectus Supplement dated
January 19, 2000, with respect to the Certificates, and has been given such
information concerning the Certificates, the underlying installment sale
contracts and Conseco Finance Securitizations Corp. as it has requested.]
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. The Purchaser does not qualify as (i) an employee benefit plan (a
"Plan") as defined in section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), whether or not it is subject to the
provisions of Title I of ERISA, (ii) a plan described in section 4975(e)(1) of
the Internal Revenue Code of 1986 (also a "Plan"), or (iii) an entity whose
underlying assets are deemed to be assets of a Plan by reason of such Plan's
investment in the entity (as determined under Department of Labor Regulations,
29 C.F.R. ss.2510.3-101 (1990)).
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
7. The Purchaser, as holder of the Class B-3I/C Subsidiary/C Master
Certificate, acknowledges (i) it may incur tax liabilities in excess of any cash
flows generated by the interest and (ii) it intends to pay the taxes associated
with holding the Class B-3I/C Subsidiary/C Master Certificate as they become
due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8.
The representations and warranties contained herein shall be binding upon
the heirs, executors, administrators and other successors of the undersigned. If
there is more than one signatory hereto, the obligations, representations,
warranties and agreements of the undersigned are made jointly and severally.
M-2
<PAGE>
Executed at _________________________, ______________________, this ______
day of ______________________.
Purchaser's Name (Print)
By
--------------------------------------
Signature
Its
Address of Purchaser ____________________
_________________________________________
Purchaser's Taxpayer Identification Number
_________________________________________
_________________________________________
M-3
<PAGE>
EXHIBIT N
FORM OF MONTHLY REPORT
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2000-1
Distribution Date:
-----------
Class A-1 Certificates
- ----------------------
1 (a) Amount Available (including Monthly
Servicing Fee)
---------
(b) Class M-1 Interest Deficiency Amount (if any), Class M-2
Interest Deficiency Amount (if any) and Class B-1 Interest
Deficiency Amount (if any) withdrawn for prior
Remittance Date
---------
(c) Amount Available after giving effect to
withdrawal of Class M-1 Interest
Deficiency Amount, Class M-2 Interest
Deficiency Amount and Class B-1
Interest Deficiency Amount for prior
Remittance Date
---------
(d) Amount withdrawn from [Capitalized Interest]
[Pre-Funding] Account
---------
Interest
- --------
Class A Certificates
- --------------------
2. Aggregate Class A-1 interest
(a) Class A-1 Remittance Rate (6.84%) %
---------
(b) Class A-1 Interest
---------
(c) Class A-2 Remittance Rate (7.19%) %
---------
(d) Class A-2 Interest
---------
(e) Class A-3 Remittance Rate (7.30%) %
---------
(f) Class A-3 Interest
---------
(g) Class A-4 Remittance Rate (7.62%) %
---------
(h) Class A-4 Interest
---------
(i) Class A-5 Remittance Rate (8.06% unless the %
---------
N-1
<PAGE>
Weighted Average Contract Rate is less than 8.06%)
(j) Class A-5 Interest
---------
3. Amount applied to Unpaid Class A Interest Shortfall
---------
(a) Class A-1
---------
(b) Class A-2
---------
(c) Class A-3
---------
(d) Class A-4
---------
(e) Class A-5
---------
4. Remaining
(a) Unpaid Class A Interest Shortfall
---------
Class M-1 Certificates
- ----------------------
5. Class M-1 Interest on Class M-1 Adjusted
Principal Balance
---------
(a) Class M-1 Adjusted Principal Balance
---------
(b) Class M-1 Remittance Rate (8.30%,
unless the Weighted Average Contract Rate
is less than 8.30%)
---------
(c) Interest on Class M-1 Adjusted
Principal Balance
---------
6. Amount applied to Unpaid Class M-1
Interest Shortfall
---------
7. Remaining Unpaid Class M-1
Interest Shortfall
---------
Class M-2 Certificates
8. Class M-2 Interest on Class M-2 Adjusted
Principal Balance
---------
(a) Class M-2 Adjusted Principal Balance
---------
(b) Class M-2 Remittance Rate (9.08%,
unless the Weighted Average Contract Rate
is less than 9.08%)
---------
(c) Interest on Class M-2 Adjusted
N-2
<PAGE>
Principal Balance
---------
9. Amount applied to Unpaid Class M-2
Interest Shortfall
---------
10. Remaining Unpaid Class M-2
Interest Shortfall
---------
Class B-1 Certificates
11. Class B-1 interest on Class B-1 Adjusted
Principal Balance
(a) Class B-1 Adjusted Principal Balance
---------
(b) Class B-1 Remittance Rate (10.05%,
unless the Weighted Average Contract Rate
is less than 10.05%)
---------
(c) Interest on Class B-1 Adjusted
Principal Balance
---------
12. Amount applied to Unpaid
Class B-1 Interest Shortfall
---------
13. Remaining Unpaid Class B-1
Interest Shortfall
---------
Principal
- ---------
14. Formula Principal Distribution Amount:
---------
(a) Scheduled principal
---------
(b) Principal Prepayments
---------
(c) Liquidated Contracts
---------
(d) Repurchases
---------
(e) Plus principal received during the
first 10 days of the next Due Period
---------
(f) Minus principal received during the
first 10 days of the prior Due Period
---------
15. Pool Scheduled Principal Balance
---------
16. Overcollateralization Amount (before principal distributions)
---------
17. Additional Principal Distribution Amount
---------
N-3
<PAGE>
Class A Certificates
- --------------------
18. Unpaid Class A Principal Shortfall
(if any) following prior Remittance Date
(a) Class A-1
---------
(b) Class A-2
---------
(c) Class A-3
---------
(d) Class A-4
---------
(e) Class A-5
---------
19. Class A Percentage for such
Remittance Date
---------
20. Class A Percentage for the following
Remittance Date
---------
21. Class A principal distribution (including Class A Percentage of
Formula Principal Distribution Amount, Unpaid Class A Principal
Shortfall and any Additional Principal Amount paid)
---------
(a) Class A-1
---------
(b) Class A-2
---------
(c) Class A-3
---------
(d) Class A-4
---------
(e) Class A-5
---------
22. (a) Class A-1 Principal Balance
---------
(b) Class A-2 Principal Balance
---------
(c) Class A-3 Principal Balance
---------
(d) Class A-4 Principal Balance
---------
(e) Class A-5 Principal Balance
---------
23. Unpaid Class A Principal Shortfall
(if any) following current
Remittance Date
(a) Class A-1
---------
(b) Class A-2
---------
(c) Class A-3
---------
(d) Class A-4
---------
(e) Class A-5
---------
Class M-1 Distribution Test, Class M-2 Distribution Test
- --------------------------------------------------------
and Class B-1 Distribution Test
- -------------------------------
(calculations applicable on and after the Remittance Date occurring in
April 2004)
N-4
<PAGE>
24. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Remittance Date
---------
(b) Average Sixty-Day Delinquency Ratio
(arithmetic average of ratios for this
month and two preceding months;
may not exceed 5.0%)
---------
25. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Remittance Date
(as a percentage of Cut-off Date
Pool Principal Balance; may not
exceed 5.5% from April 1, 2004
to March 31, 2005; 7.0% from
April 1, 2005 to March, 2006;
9.0% from April 1, 2006 to
March 31, 2007; and 10.5% thereafter)
---------
26. Current Realized Losses Test
(a) Current Realized Losses
for current Remittance Date
---------
(b) Current Realized Loss Ratio (total Realized Losses for most
recent three months, multiplied by 4, divided by arithmetic
average of Pool Scheduled Principal Balances for third
preceding Remittance Date and for current Remittance
Date; may not exceed 2.75%)
---------
27. Class M-1 Principal Balance Test
(a) Sum of Class M-1 Principal Balance,
Class M-2 Principal Balance, Class B
Principal Balance and the Overcollateralization
Amount before distributions on current Remittance Date)
divided by Pool Scheduled Principal Balance as of preceding
Remittance Date is equal to or greater than 26.25%.
---------
N-5
<PAGE>
28. Class M-2 Principal Balance Test
(a) Sum of Class M-2 Principal Balance, Class B Principal Balance
and the Overcollateralization Amount (before distributions on
current Remittance Date) divided by Pool Scheduled Principal
Balance as of preceding Remittance Date is equal to or
greater than 18.75%.
---------
29. Class B Principal Balance Test
(a) The Class B Principal Balance
(before any distributions on current
Remittance Date) as of such Remittance
Date is greater than $18,000,000
---------
(b) Sum of Class B Principal Balance and the Overcollateralization
Amount (before distributions on current Remittance Date)
divided by Pool Scheduled Principal Balance as of preceding
Remittance Date is equal to or greater
than 12.75%.
---------
Class M-1 Certificates
- ----------------------
30. Class M-1 Percentage for such
Remittance Date
---------
31. Class M-1 Percentage for the following
Remittance Date
---------
32. Class M-1 principal distribution:
(a) Current (Class M-1 Percentage of Formula Principal
Distribution Amount)
---------
(b) Unpaid Class M-1 Principal Shortfall
---------
(c) Additional Principal Distribution Amount
---------
33. Unpaid Class M-1 Principal Shortfall
(if any) following current
Remittance Date
---------
N-6
<PAGE>
34. Class M-1 Liquidation Loss Interest
(a) Class M-1 Liquidation Loss Amount
---------
(b) Amount applied to Class M-1
Liquidation Loss Interest Amount
---------
(c) Remaining Class M-1 Liquidation Loss
Interest Amount
---------
(d) Amount applied to Unpaid Class M-1
Loss Interest Shortfall
---------
(e) Remaining Unpaid Class M-1
Liquidation Loss Interest Shortfalls
---------
Class M-2 Certificates
- ----------------------
35. Class M-2 Percentage for such
Remittance Date
---------
36. Class M-2 Percentage for the following
Remittance Date
---------
37. Class M-2 principal distribution
(a) Current (Class M-2 Percentage of Formula Principal
Distribution Amount)
---------
(b) Unpaid Class M-2 Principal Shortfall
---------
(c) Additional Principal Distribution Amount
---------
38. Unpaid Class M-2 Principal Shortfall
(if any) following current
Remittance Date
---------
39. Class M-2 Liquidation Loss Interest
(a) Class M-2 Liquidation Loss Amount
---------
(b) Amount applied to Class M-2
Liquidation Loss Interest Amount
---------
(c) Remaining Class M-2 Liquidation Loss
Interest Amount
---------
N-7
<PAGE>
(d) Amount applied to Unpaid Class M-2
Loss Interest Shortfall
---------
(e) Remaining Unpaid Class M-2
Liquidation Loss Interest Shortfalls
---------
Class B Certificates
- --------------------
40. (a) Class B Percentage for such
Remittance Date
---------
(b) Class B Percentage for the following
Remittance Date
---------
41. Class B-1 principal distribution
(a) Current (Class B Percentage of
Formula Principal Distribution Amount)
---------
(b) Unpaid Class B-1 Principal Shortfall
---------
(c) Additional Principal Distribution Amount
---------
42. Unpaid Class B-1 Principal Shortfall
---------
43. Class B-1 Principal Balance
---------
44. Class B-1 Liquidation Loss Interest
(a) Class B-1 Liquidation Loss Amount
---------
(b) Amount applied to Class B-1
Liquidation Loss Interest Amount
---------
(c) Remaining Class B-1 Liquidation Loss
Interest Amount
---------
(d) Amount applied to Unpaid Class B-1
Liquidation Loss Interest Shortfall
---------
(e) Remaining Unpaid Class B-1 Liquidation
Loss Interest Shortfall
---------
Class B-2 Certificates
- ----------------------
45. Remaining Amount Available
---------
N-8
<PAGE>
Interest
- --------
46. Class B-2 Remittance Rate (10.05%,
unless the Weighted Average Contract Rate
is less than 10.05%)
---------
47. Class B-2 Interest
---------
48. Current interest
---------
49. Amount applied to Unpaid Class
B-2 Interest Shortfall
---------
50. Remaining Unpaid Class B-2
Interest Shortfall
---------
Principal
- ---------
51. Unpaid Class B-2 Principal Shortfall
(if any) following prior Remittance Date
---------
52. Class B-2 Liquidation Loss
Amount
---------
53. Current principal (zero until Class B-1
paid down; thereafter, Class B Percentage
of Formula Principal Distribution Amount)
---------
54. Additional Principal Distribution Amount
---------
55. Guarantee Payment
---------
56. Class B-2 Principal Balance
---------
57. Remaining Amount Available (after payment
of Class B-2 Distribution Amount)
---------
58. Excess Interest
---------
Class B-3I Certificates
- -----------------------
59. Class B-3I Formula Distribution Amount (all
Excess Interest plus Unpaid Class B-3I Shortfall)
---------
60. Class B-3I Distribution Amount (remaining
---------
N-9
<PAGE>
Amount Available)
---------
61. Class B-3I Shortfall (59 - 60)
---------
62. Unpaid Class B-3I Shortfall
---------
Class A, Class M and Class B Certificates
- -----------------------------------------
63. Aggregate Scheduled Principal Balance of delinquent Contracts
as of Determination Date
(a) 30 - 59 days
---------
(b) 60 days or more
---------
64. Manufactured Homes repossessed
---------
65. Manufactured Homes repossessed
but remaining in inventory
---------
66. Repossessed Manufactured Homes purchased by Originator
or Subsidiary
(a) number of Contracts
current month
---------
cumulative
---------
(b) Scheduled Principal Balance
current month
---------
cumulative
---------
(c) Purchase Price
current month
---------
cumulative
---------
67. Weighted Average Contract Rate
of all outstanding Contracts
---------
Class M and Class B Certificates
- --------------------------------
68. Class M-1 Interest Deficiency Amount on
such Remittance Date
---------
69. Class M-2 Interest Deficiency Amount on
such Remittance Date
---------
N-10
<PAGE>
70. Class B-1 Interest Deficiency Amount on
such Remittance Date
---------
Please contact Bondholder Services Department of U.S. Bank National Association,
1-800-934-6802 with any questions regarding this Statement or your Distribution.
N-11
<PAGE>
EXHIBIT O
FORM OF ADDITION NOTICE
______________, 2000
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of February 1,
2000, among Conseco Finance Corp. (the "Company"), Conseco Finance
Securitizations Corp. (the "Seller") and U.S. Bank National Association as
Trustee (the "Trustee") relating to Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 2000-1
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the meanings
given them in the Agreement. The Seller hereby notifies the Trustee of an
assignment to the Trust of Subsequent Contracts on the date and in the amounts
set forth below:
Subsequent Transfer Date: _________________
Cut-off Date Principal Balance of Subsequent Contracts to be assigned to
Trust on Subsequent Transfer Date: $_____________
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
CONSECO FINANCE SECURITIZATIONS CORP.
By
-------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION
By
-------------------------------
Name:
Title:
O-1
<PAGE>
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of February 1, 2000, among (the "Originator"), Conseco Finance
Securitizations Corp. (the "Seller") and U.S. Bank National Association as
Trustee (the "Trustee"), the Seller does hereby transfer, assign, set over and
otherwise convey, without recourse, to Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate Trust 2000-1, created by the
Agreement, to be held in trust as provided in the Agreement, (i) all the right,
title and interest of the Seller in and to the Subsequent Contracts identified
on the list attached hereto as Exhibit A (the "Subsequent Contracts"),
including, without limitation, all right, title and interest in and to the
Collateral Security and all rights to receive payments on or with respect to the
Subsequent Contracts (other than the principal and interest due on the related
Subsequent Contracts on or before the Subsequent Cut-off Date), (ii) all rights
under every Hazard Insurance Policy relating to a Manufactured Home securing a
Subsequent Contract for the benefit of the creditor of such Subsequent Contract,
(iii) all rights under all FHA/VA Regulations pertaining to any Subsequent
Contract that is an FHA/VA Contract, (iv) the proceeds from the Errors and
Omissions Protection Policy and all rights under any blanket hazard insurance
policy to the extent they relate to the Manufactured Homes, (v) all documents
contained in the Contract Files and the Land-and-Home Contract Files relating to
the Subsequent Contracts, (vi) all rights of the Seller under the Subsequent
Transfer Agreement of even date herewith between the Originator and the Seller
and (vii) all proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this __ day of ________, 2000.
CONSECO FINANCE SECURITIZATIONS CORP.
By
--------------------------------------
Name:
Title:
P-1
<PAGE>
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Company in connection with the Pooling and Servicing Agreement dated as of
February 1, 2000 (the "Agreement") among the Company, Conseco Finance Corp. and
U.S. Bank National Association as Trustee. All capitalized terms used herein
without definition have the respective meanings specified in the Agreement. The
undersigned further certifies that:
1. This Certificate is delivered in connection with the sale to the
Trust on __________________ (the "Subsequent Transfer Date") of Contracts
(the "Subsequent Contracts") identified in the List of Contracts attached
to the Subsequent Transfer Instrument of even date herewith.
2. As of the Subsequent Transfer Date, all representations and
warranties in Section 3.01 of the Agreement are true and correct and all
representations and warranties in Section 3.03 of the Agreement with
respect to the Subsequent Contracts are true to the best of [her][his]
knowledge.
3. All conditions precedent to the sale of the Subsequent Contracts to
the Trust under Section 2.03 of the Agreement have been satisfied.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
_________, 2000.
By
--------------------------------------
Name:
Title:
Q-1
<PAGE>
EXHIBIT 4.2
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2000-1
TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
CONSECO FINANCE CORP.
Seller
dated as of
February 1, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS........................................................1
SECTION 1.1. General.....................................................1
SECTION 1.2. Specific Terms..............................................1
SECTION 1.3. Usage of Terms..............................................3
SECTION 1.4. No Recourse.................................................3
ARTICLE II CONVEYANCE OF THE INITIAL CONTRACTS
AND THE INITIAL COLLATERAL SECURITY..........................................4
SECTION 2.1. Conveyance of the Initial Contracts and
the Initial Collateral Security...........................4
SECTION 2.2. Purchase Price of Initial Contracts.........................4
SECTION 2.3. Conveyance of Subsequent Contracts and
Subsequent Collateral Security............................4
ARTICLE III REPRESENTATIONS AND WARRANTIES...................................6
SECTION 3.1. Representations and Warranties of CFC.......................6
SECTION 3.2. Representations and Warranties of CFSC......................7
ARTICLE IV COVENANTS OF CFC..................................................9
SECTION 4.1. Transfer of Contracts.......................................9
SECTION 4.2. Costs and Expenses..........................................9
SECTION 4.3. Indemnification.............................................9
SECTION 4.4. Financial Statement Disclosure.............................10
SECTION 4.5. Staged-Funding Contracts...................................10
ARTICLE V REPURCHASES.......................................................10
SECTION 5.1. Repurchase of Contracts Upon Breach of Warranty............10
SECTION 5.2. Reassignment of Purchased Contracts........................11
SECTION 5.3. Waivers....................................................11
ARTICLE VI MISCELLANEOUS....................................................12
SECTION 6.1. Liability of CFC...........................................12
SECTION 6.2. Merger or Consolidation of CFC or CFSC.....................12
SECTION 6.3. Limitation on Liability of CFC and Others..................12
SECTION 6.4. Amendment..................................................13
SECTION 6.5. Notices....................................................13
SECTION 6.6. Merger and Integration.....................................14
SECTION 6.7. Severability of Provisions.................................14
SECTION 6.8. Intention of the Parties...................................14
SECTION 6.9. Governing Law..............................................15
SECTION 6.10. Counterparts...............................................15
SECTION 6.11. Conveyance of the Initial Contracts and
the Initial Collateral Security to the Trust............15
SECTION 6.12. Nonpetition Covenant.......................................15
-i-
<PAGE>
SCHEDULES
Schedule A -- Schedule of Initial Contracts
EXHIBITS
Exhibit A -- Form of Subsequent Transfer Agreement
-ii-
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT, dated as of February 1, 2000, executed between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Conseco Finance Corp., a Delaware corporation, as seller ("CFC").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, CFSC has agreed to purchase from CFC, and CFC has agreed to
transfer to CFSC, certain manufactured housing installment sales contracts
pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, CFSC and CFC, intending to be legally bound,
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. General. The specific terms defined in this Article include
the plural as well as the singular. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision, and Article, Section,
Schedule and Exhibit references, unless otherwise specified, refer to Articles
and Sections of and Schedules and Exhibits to this Agreement. Capitalized terms
used herein without definition shall have the respective meanings assigned to
such terms in the Pooling and Servicing Agreement, dated as of February 1, 2000,
by and among Conseco Finance Securitizations Corp. (as Seller), Conseco Finance
Corp. (in its individual capacity and as Servicer), and U.S. Bank National
Association, as trustee (the "Trustee") relating to the Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificates Trust 2000-1 (the
"Trust").
SECTION 1.2. Specific Terms. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Agreement" shall mean this Transfer Agreement and all amendments hereof
and supplements hereto.
"Closing Date" means, February 8, 2000.
"Collateral Security" means the Initial Collateral Security conveyed by CFC
to CFSC pursuant to this Agreement together with any and all Subsequent
Collateral Security conveyed by CFC to CFSC pursuant to each Subsequent Transfer
Agreement.
"Contracts" means the Initial Contracts conveyed by CFC to CFSC pursuant to
this Agreement together with any and all Subsequent Contracts conveyed by CFC to
CFSC pursuant to each Subsequent Transfer Agreement.
<PAGE>
"Initial Collateral Security" means, with respect to any Initial Contract,
(i) the security interests, if any, granted by or on behalf of the related
Obligor with respect thereto, including a first priority perfected security
interest in the related Manufactured Home, (ii) all other security interests or
liens and property subject thereto from time to time purporting to secure
payment of such Contract, whether pursuant to the agreement giving rise to such
Contract or otherwise, together with all financing statements signed by the
Obligor describing any collateral securing such Contract, (iii) all security
agreements granting a security interest in the related Manufactured Home and all
guarantees, insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Contract whether
pursuant to the agreement giving rise to such Contract or otherwise, and (iv)
all records in respect of such Contract.
"Initial Contracts" means the manufactured housing installment sales
contracts and installment loan agreements listed on the Schedule of Initial
Contracts, including all related security interests and any and all rights to
receive payments on or with respect thereto (other than principal and interest
due pursuant thereto on or before the applicable Cut-off Date).
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of February 1, 2000, executed and delivered by Conseco
Finance Corp., as Originator, Servicer and Guarantor; Conseco Finance
Securitizations Corp., as Seller; and the Trustee.
"Related Documents" means the Certificates, the Pooling and Servicing
Agreement, each Subsequent Transfer Agreement and the Underwriting Agreement
among CFC, CFSC and the underwriters of the Certificates. The Related Documents
to be executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of CFC's
representations and warranties hereunder or under any Subsequent Transfer
Agreement or any other event which requires the repurchase of a Contract by CFC
under the Pooling and Servicing Agreement.
"Schedule of Contracts" means the Schedule of Initial Contracts, as
supplemented by each Schedule of Subsequent Contracts.
"Schedule of Initial Contracts" means the schedule of manufactured housing
installment sales contracts and installment loan agreements which is attached
hereto as Schedule A.
"Schedule of Subsequent Contracts" means the schedule of manufactured
housing installment sales contracts and installment loan agreements sold and
transferred pursuant to a Subsequent Transfer Agreement, which schedule is
attached to such Subsequent Transfer Agreement as Schedule A and shall
supplement the Schedule of Initial Contracts.
"Subsequent Collateral Security" means, with respect to any Subsequent
Contract, (i) the security interests, if any, granted by or on behalf of the
related Obligor with respect thereto, including a first priority perfected
security interest in the related Manufactured Home, (ii) all other security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Contract, whether pursuant to the agreement giving rise
to such Contract or
-2-
<PAGE>
otherwise, together with all financing statements signed by the Obligor
describing any collateral securing such Contract, (iii) all security agreements
granting a security interest in the related Manufactured Home and all
guarantees, insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Contract whether
pursuant to the agreement giving rise to such Contract or otherwise, and (iv)
all records in respect of such Contract.
"Subsequent Contracts" means the manufactured housing installment sales
contracts and installment loan agreements specified in the Schedule of
Subsequent Contracts attached as Schedule A to each Subsequent Transfer
Agreement, including all related security interests and all rights to receive
payments on or with respect thereto (other than principal and interest due on or
before the applicable Subsequent Cut-off Date).
"Subsequent Transfer Agreement" has the meaning assigned in Section
2.3(b)(iii).
"Trust" means the trust created by the Trust Agreement, known as
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust
2000-1, the estate of which consists of the Trust Property.
"Trust Property" means the property and proceeds of every description
conveyed by CFSC to the Trust pursuant to the Pooling and Servicing Agreement
and pursuant to any Subsequent Transfer Instrument, together with the
Certificate Account (including all Eligible Investments and all proceeds
therefrom).
"Trustee" means U.S. Bank National Association, a national banking
association organized and existing under the laws of the United States, not in
its individual capacity but solely as trustee of the Trust, and any successor
trustee appointed and acting pursuant to the Pooling and Servicing Agreement.
SECTION 1.3. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Pooling and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
SECTION 1.4. No Recourse. Without limiting the obligations of CFC
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of CFC, or
of any predecessor or successor of CFC.
-3-
<PAGE>
ARTICLE II
CONVEYANCE OF THE INITIAL CONTRACTS
AND THE INITIAL COLLATERAL SECURITY
SECTION 2.1. Conveyance of the Initial Contracts and the Initial Collateral
Security. Subject to the terms and conditions of this Agreement, CFC hereby
sells, transfers, assigns, and otherwise conveys to CFSC without recourse (but
without limitation of its obligations in this Agreement or in the Pooling and
Servicing Agreement), and CFSC hereby purchases, all right, title and interest
of CFC in and to the Initial Contracts and the Initial Collateral Security,
including all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing an Initial Contract for the benefit of the creditor
of such Contract, all rights under all FHA/VA Regulations pertaining to any
Initial Contract that is an FHA/VA Contract, the proceeds from the Errors and
Omissions Protection Policy and all rights under any blanket hazard insurance
policy to the extent they relate to a Manufactured Home securing an Initial
Contracts, all documents contained in the Contract Files and the Land-and-Home
Contract Files, and all proceeds and products in any way derived from any of the
foregoing. It is the intention of CFC and CFSC that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Initial Contracts
and the Initial Collateral Security from CFC to CFSC, conveying good title
thereto free and clear of any liens, and the Initial Contracts and the Initial
Collateral Security shall not be part of CFC's estate in the event of the filing
of a bankruptcy petition by or against CFC under any bankruptcy or similar law.
SECTION 2.2. Purchase Price of Initial Contracts. Simultaneously with the
conveyance of the Initial Contracts and the Initial Collateral Security to CFSC,
CFSC has (a) paid or caused to be paid to or upon the order of CFC approximately
$824,750,203.00 by wire transfer of immediately available funds (representing
the proceeds to CFSC from the sale of the Initial Contracts before (i) deducting
expenses incurred by CFSC in connection with such sale, (ii) depositing the
Pre-Funded Amount in the Pre-Funding Account and (iii) depositing $2,100,000.00
in the capitalized interest account) and (b) has delivered to CFC, or its
designee, the Class B-1, Class B-2 and Class B-3I Certificates and Class C
Certificates.
SECTION 2.3. Conveyance of Subsequent Contracts and Subsequent Collateral
Security.
(a) Subject to the conditions set forth in paragraph (b) below and the
terms and conditions in the related Subsequent Transfer Agreement, in
consideration of CFSC's delivery on the related Subsequent Transfer Date to or
upon the order of CFC of an amount equal to the purchase price of the Subsequent
Contracts (as set forth in the related Subsequent Transfer Agreement), CFC
hereby agrees to sell, transfer, assign, and otherwise convey to CFSC without
recourse (but without limitation of its obligations in this Agreement and the
related Subsequent Transfer Agreement), and CFSC hereby agrees to purchase, all
right, title and interest of CFC in and to the Subsequent Contracts and the
Subsequent Collateral Security described in the related Subsequent Transfer
Agreement.
(b) CFC shall transfer to CFSC, and CFSC shall acquire, the Subsequent
Contracts and the Subsequent Collateral Security to be transferred on any
Subsequent Transfer Date
-4-
<PAGE>
only upon the satisfaction of each of the following conditions on or prior to
such Subsequent Transfer Date:
(i) CFSC shall have provided the Trustee and the Rating Agencies with
an Addition Notice at least five Business Days prior to the Subsequent
Transfer Date and shall have provided any information reasonably requested
by the Trustee with respect to the Subsequent Contracts;
(ii) CFC shall have delivered to the Trustee the related Land-and-Home
Contract File for each Subsequent Contract that is a Land-and-Home Contract
at least two Business Days prior to the Subsequent Transfer Date;
(iii) CFSC shall have delivered to CFC a duly executed Subsequent
Transfer Agreement substantially in the form of Exhibit A hereto (the
"Subsequent Transfer Agreement"), which shall include a Schedule of
Subsequent Contracts identifying the related Subsequent Contracts;
(iv) as of each Subsequent Transfer Date, as evidenced by delivery of
the Subsequent Transfer Agreement, neither CFC nor CFSC shall be insolvent
nor shall they have been made insolvent by such transfer nor shall they be
aware of any pending insolvency;
(v) such transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC and the Subsidiary
REMIC) or the Certificateholders or Class C Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
(vii) each of the representations and warranties contained in Sections
3.02, 3.04, and 3.05 of the Pooling and Servicing Agreement and in this
Section 2.3 shall be true and correct, and each condition precedent
specified in this Section 2.3 shall be satisfied, as evidenced by delivery
of the Subsequent Transfer Agreement; and
(viii) CFC and CFSC shall have delivered to the Trustee Opinions of
Counsel addressed to the Rating Agencies and the Trustee with respect to
the transfer of the Subsequent Contracts substantially in the form of the
Opinions of Counsel delivered on the Closing Date regarding certain
bankruptcy, corporate and tax matters.
(c) CFC covenants to transfer to CFSC pursuant to paragraph (a) above
Subsequent Contracts with aggregate Scheduled Principal Balances approximately
equal to $170,136,493.00; provided, however, that the sole remedy of CFSC with
respect to a failure of such covenant shall be to enforce the provisions of
Section 8.07 of the Pooling and Servicing Agreement.
-5-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of CFC. CFC makes the following
representations and warranties, on which CFSC relies in purchasing the Initial
Contracts and the Initial Collateral Security and in transferring the Initial
Contracts and the Initial Collateral Security to the Trust under the Pooling and
Servicing Agreement. Such representations are made as of the execution and
delivery of this Agreement, but shall survive the sale, transfer and assignment
of the Initial Contracts and the Initial Collateral Security hereunder and the
sale, transfer and assignment thereof by CFSC to the Trust under the Pooling and
Servicing Agreement. CFC and CFSC agree that CFSC will assign to the Trust all
of CFSC's rights under this Agreement and that the Trust will thereafter be
entitled to enforce this Agreement against CFC in the Trust's own name.
(a) Representations Regarding Contracts. The representations and
warranties set forth in Sections 3.02, 3.04 and 3.05 of the Pooling and
Servicing Agreement are true and correct.
(b) Organization and Good Standing. CFC has been duly organized and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and sell the Initial
Contracts and the Initial Collateral Security transferred to CFSC.
(c) Due Qualification. CFC is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification.
(d) Power and Authority. CFC has the power and authority to execute
and deliver this Agreement and its Related Documents and to carry out its
terms and their terms, respectively; CFC has full power and authority to
sell and assign the Initial Contracts and the Initial Collateral Security
to be sold and assigned to and deposited with CFSC hereunder and has duly
authorized such sale and assignment to CFSC by all necessary corporate
action; and the execution, delivery and performance of this Agreement and
CFC's Related Documents have been duly authorized by CFC by all necessary
corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and CFC's Related
Documents have been duly executed and delivered; shall effect a valid sale,
transfer and assignment of the Initial Contracts and the Initial Collateral
Security, enforceable against CFC and creditors of and purchasers from CFC;
and constitute legal, valid and binding obligations of CFC enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
-6-
<PAGE>
(f) No Violation. The consummation of the transactions contemplated by
this Agreement and the Related Documents and the fulfillment of the terms
of this Agreement and the Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice, lapse of time or both) a default under, the certificate of
incorporation or bylaws of CFC, or any indenture, agreement, mortgage, deed
of trust or other instrument to which CFC is a party or by which it is
bound, or result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement and
the Pooling and Servicing Agreement, or violate any law, order, rule or
regulation applicable to CFC of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over CFC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations pending
or, to CFC's knowledge, threatened against CFC, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over CFC or its properties (i)
asserting the invalidity of this Agreement or any of the Related Documents,
(ii) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement or
any of the Related Documents, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by CFC of its
obligations under, or the validity or enforceability of, this Agreement or
any of the Related Documents or (iv) seeking to affect adversely the
federal income tax or other federal, state or local tax attributes of, or
seeking to impose any excise, franchise, transfer or similar tax upon, the
transfer and acquisition of the Initial Contracts and the Initial
Collateral Security hereunder or under the Pooling and Servicing Agreement.
(h) Chief Executive Office. The chief executive office of CFC is
located at 1100 Landmark Towers, 345 St. Peter
Street, Saint Paul, MN 55102-1639.
SECTION 3.2. Representations and Warranties of CFSC. CFSC makes the
following representations and warranties, on which CFC relies in selling,
assigning, transferring and conveying the Initial Contracts and the Initial
Collateral Security to CFSC hereunder. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Initial Contracts and the Initial Collateral Security
hereunder and the sale, transfer and assignment thereof by CFSC to the Trust
under the Pooling and Servicing Agreement.
(a) Organization and Good Standing. CFSC has been duly organized and
is validly existing and in good standing as a corporation under the laws of
the State of Minnesota, with the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and has,
full power, authority and legal right to acquire and own the Initial
Contracts and the Initial Collateral Security and to transfer the Initial
Contracts and the Initial Collateral Security to the Trust pursuant to the
Pooling and Servicing Agreement.
-7-
<PAGE>
(b) Due Qualification. CFSC is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect (i) CFSC's ability to acquire the
Initial Contracts or the Initial Collateral Security, (ii) the validity or
enforceability of the Initial Contracts and the Initial Collateral Security
or (iii) CFSC's ability to perform its obligations hereunder and under the
Related Documents.
(c) Power and Authority. CFSC has the power, authority and legal right
to execute and deliver this Agreement and its Related Documents and to
carry out the terms hereof and thereof and to acquire the Initial Contracts
and the Initial Collateral Security hereunder; and the execution, delivery
and performance of this Agreement and its Related Documents and all of the
documents required pursuant hereto or thereto have been duly authorized by
CFSC by all necessary action.
(d) No Consent Required. CFSC is not required to obtain the consent of
any other Person, or any consent, license, approval or authorization or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement and the Related Documents, except for such as have been obtained,
effected or made.
(e) Binding Obligation. This Agreement and each of its Related
Documents constitutes a legal, valid and binding obligation of CFSC,
enforceable against CFSC in accordance with its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to
general equitable principles.
(f) No Violation. The execution, delivery and performance by CFSC of
this Agreement, the consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of the terms of
this Agreement and the Related Documents do not and will not conflict with,
result in any breach of any of the terms and provisions of or constitute
(with or without notice or lapse of time) a default under the articles of
incorporation or bylaws of CFSC, or conflict with or breach any of the
terms or provisions of, or constitute (with or without notice or lapse of
time) a default under, any indenture, agreement, mortgage, deed of trust or
other instrument to which CFSC is a party or by which CFSC is bound or to
which any of its properties are subject, or result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument
(other than the Pooling and Servicing Agreement), or violate any law,
order, rule or regulation, applicable to CFSC or its properties, of any
federal or state regulatory body or any court, administrative agency, or
other governmental instrumentality having jurisdiction over CFSC or any of
its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before any
court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the consummation of any of the
transactions
-8-
<PAGE>
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by CFSC of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (iv)
that may adversely affect the federal or state income tax attributes of, or
seeking to impose any excise, franchise, transfer or similar tax upon, the
transfer and acquisition of the Initial Contracts and the Initial
Collateral Security hereunder or the transfer of the Initial Contracts and
the Initial Collateral Security to the Trust pursuant to the Pooling and
Servicing Agreement.
In the event of any breach of a representation and warranty made by CFSC
hereunder, CFC covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the later of (i) the date on which all
pass-through certificates or other similar securities issued by the Trust, or a
trust or similar vehicle formed by CFSC, have been paid in full, or (ii) all
Certificates or other similar securities issued by the Trust, or a trust or
similar vehicle formed by CFSC, have been paid in full. CFC and CFSC agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by CFSC or by the Trustee on behalf of the Trust.
ARTICLE IV
COVENANTS OF CFC
SECTION 4.1. Transfer of Contracts. On or before the Closing Date, CFC
shall deliver the Land-and-Home Contract files to the Trustee. CFC has filed a
form UCC-1 financing statement regarding the sale of the Contracts to CFSC, and
shall file continuation statements in respect of such UCC-1 financing statement
as if such financing statement were necessary to perfect such sale. CFC shall
take any other actions necessary to maintain the perfection of the sale of the
Contracts to CFSC.
SECTION 4.2. Costs and Expenses. CFC shall pay all reasonable costs and
disbursements in connection with the performance of its obligations hereunder
and under each Subsequent Transfer Agreement and its Related Documents.
SECTION 4.3. Indemnification.
(a) CFC will defend and indemnify CFSC against any and all costs, expenses,
losses, damages, claims, and liabilities, including reasonable fees and expenses
of counsel and expenses of litigation, arising out of or resulting from any
breach of any of CFC's representations and warranties contained herein or in any
Subsequent Transfer Agreement. Notwithstanding any other provision of this
Agreement, the obligation of CFC under this Section 4.3 shall not terminate upon
a Service Transfer pursuant to Article VII of the Pooling and Servicing
Agreement, except that the obligation of CFC under this Section 4.3 shall not
relate to the actions of any subsequent Servicer after a Service Transfer.
(b) No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by CFSC under or as a result of this Agreement and the
transactions contemplated
-9-
<PAGE>
hereby and, to the maximum extent permitted and valid under mandatory provisions
of law, CFSC expressly disclaims such assumption.
(c) CFC agrees to pay, and to indemnify, defend and hold harmless CFSC from
any taxes which may at any time be asserted with respect to, and as of the date
of, the transfer of the Contracts to CFSC including, without limitation, any
sales, gross receipts, general corporation, personal property and costs,
expenses and reasonable counsel fees in defending against the same, whether
arising by reason of the acts to be performed by CFC under this Agreement or
imposed against CFSC.
(d) Indemnification under this Section 4.3 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Originator has made any indemnity payments to CFSC pursuant to this
Section and CFSC thereafter collects any of such amounts from others, CFSC will
repay such amounts collected to CFC, as the case may be, without interest.
SECTION 4.4. Financial Statement Disclosure. CFC's financial statements
will disclose that the Subsequent Contracts have been transferred by CFC to
CFSC, and by CFSC to the Trust, and are not available to satisfy claims of CFC's
creditors.
SECTION 4.5. Staged-Funding Contracts. The purchase price described in
Section 2.2 includes the amount by which the aggregate Cut-off Date Principal
Balances of the Staged- Funding Contracts exceeds their principal balance as of
the Closing Date. CFC agrees to use its best efforts (consistent with prudent
lending practices) to cause each Staged-Funding Contract to be fully disbursed
on or before the Funding Termination Date. CFC acknowledges its obligations with
respect to the Staged-Funding Contracts under Section 3.06(c) and 3.08 of the
Pooling and Servicing Agreement.
ARTICLE V
REPURCHASES
SECTION 5.1. Repurchase of Contracts Upon Breach of Warranty.
(a) Upon the occurrence of a Repurchase Event, CFC shall, unless such
breach shall have been cured in all material respects, repurchase such Contract
from the Trust pursuant to Section 3.06 of the Pooling and Servicing Agreement,
subject to the limitation of Section 3.07 of the Pooling and Servicing
Agreement. It is understood and agreed that the obligation of CFC to repurchase
any Contract as to which a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against CFC for such breach
available to CFSC, the Certificateholders or the Trustee on behalf of
Certificateholders. The provisions of this Section 5.1 are intended to grant the
Trustee a direct right against CFC to demand performance hereunder, and in
connection therewith, CFC waives any requirement of prior demand against CFSC
with respect to such repurchase obligation. Any such purchase shall take place
in the manner specified in Section 306 of the Pooling and Servicing Agreement.
Notwithstanding any other provision of this Agreement, any Subsequent Transfer
Agreement or the Pooling and Servicing Agreement to the contrary, the obligation
of CFC under this Section shall not terminate upon a termination of CFC as
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<PAGE>
Servicer under the Pooling and Servicing Agreement and shall be performed in
accordance with the terms hereof notwithstanding the failure of the Servicer or
CFSC to perform any of their respective obligations with respect to such
Contract under the Pooling and Servicing Agreement.
(b) In lieu of repurchasing a Contract when required by Section 5.1(a) of
this Agreement and Section 3.06(a) of the Pooling and Servicing Agreement, CFC
may deliver an Eligible Substitute Contract pursuant to the provisions of
Section 3.06(b) of the Pooling and Servicing Agreement.
(c) In addition to the foregoing and notwithstanding whether the related
Contract shall have been purchased by CFC, CFC shall indemnify the Trustee, the
Trust and the Certificateholders against all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel, which
may be asserted against or incurred by any of them as a result of third party
claims arising out of the events or facts giving rise to such Repurchase Events.
SECTION 5.2. Reassignment of Purchased Contracts. Upon deposit of the
Repurchase Price of any Contract repurchased or replaced by CFC under Section
5.1, CFSC shall cause the Trustee to take such steps as may be reasonably
requested by CFC in order to assign to CFC all of CFSC's and the Trust's right,
title and interest in and to such Contract and all security and documents and
all Collateral Security conveyed to CFSC and the Trust directly relating
thereto, without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of CFSC or the Trustee. Such assignment shall be a sale and assignment outright,
and not for security. If, following the reassignment of a Contract, in any
enforcement suit or legal proceeding, it is held that CFC may not enforce any
such Contract on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Contract, CFSC and the Trustee shall, at the
expense of CFC, take such steps as CFC deems reasonably necessary to enforce the
Contract, including bringing suit in CFSC's or the Trustee's name.
SECTION 5.3. Waivers. No failure or delay on the part of CFSC, or the
Trustee as assignee of CFSC, in exercising any power, right or remedy under this
Agreement or under any Subsequent Transfer Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or future exercise thereof or the exercise of any
other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Liability of CFC. CFC shall be liable in accordance herewith
only to the extent of the obligations in this Agreement or in any Subsequent
Transfer Agreement specifically undertaken by CFC and the representations and
warranties of CFC.
SECTION 6.2. Merger or Consolidation of CFC or CFSC. Any corporation or
other entity (i) into which CFC or CFSC may be merged or consolidated, (ii)
resulting from any merger or consolidation to which CFC or CFSC is a party or
(iii) succeeding to the business of CFC or
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<PAGE>
CFSC, in the case of CFSC, which corporation has articles of incorporation
containing provisions relating to limitations on business and other matters
substantively identical to those contained in CFSC's articles of incorporation,
shall execute an agreement of assumption to perform every obligation of CFC or
CFSC, as the case may be, under this Agreement and each Subsequent Transfer
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to CFC or CFSC, as the case may be, hereunder and under each such
Subsequent Transfer Agreement (without relieving CFC or CFSC of its
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further act by any of the parties
to this Agreement or each Subsequent Transfer Agreement. CFC or CFSC shall
promptly inform the other party and the Trustee of such merger, consolidation or
purchase and assumption. Notwithstanding the foregoing, as a condition to the
consummation of the transactions referred to in clauses (i), (ii) and (iii)
above, (x) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Sections 3.1 and 3.2 of this
Agreement, or similar representation or warranty made in any Subsequent Transfer
Agreement, shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction), (y) CFC or CFSC, as applicable, shall have delivered written
notice of such consolidation, merger or purchase and assumption to the relevant
rating agencies prior to the consummation of such transaction and shall have
delivered to the Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 6.2 and that all conditions precedent, if
any, provided for in this Agreement, or in each Subsequent Transfer Agreement,
relating to such transaction have been complied with, and (z) CFC or CFSC, as
applicable, shall have delivered to the Trustee an Opinion of Counsel, stating
that, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Trustee in the Trust
Property and reciting the details of the filings or (B) no such action shall be
necessary to preserve and protect such interest.
SECTION 6.3. Limitation on Liability of CFC and Others. CFC shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its obligations under this Agreement, any Subsequent Transfer
Agreement or its Related Documents and that in its opinion may involve it in any
expense or liability.
SECTION 6.4. Amendment.
(a) This Agreement and any Subsequent Transfer Agreement may be amended by
CFC and CFSC and without the consent of the Trustee or any of the
Certificateholders (A) to cure any ambiguity or (B) to correct any provisions in
this Agreement or any such Subsequent Transfer Agreement; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Trustee, adversely affect in any material respect the interests of any
Noteholder.
(b) This Agreement may also be amended from time to time by CFC and CFSC,
with the prior written consent of the Trustee and the Holders of Certificates of
each Class affected thereby evidencing, as to each such Class, Percentage
Interests aggregating 51% or more for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Certificateholders; provided,
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<PAGE>
however, that no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
Contracts or distributions that are required to be made on any Certificate or
(ii) reduce the aforesaid percentage required to consent to any such amendment
or any waiver hereunder, without the consent of the Holders of all Certificates
then outstanding.
(c) This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholders if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
(d) Concurrently with the solicitation of any consent pursuant to this
Section 6.4, CFSC shall furnish written notification to the Rating Agencies.
Promptly after the execution of any amendment or consent pursuant to this
Section 6.4, CFSC shall furnish written notification of the substance of such
amendment to the Ratings Agencies, each Certificateholder and the Class C
Certificateholders.
(e) It shall not be necessary for the consent of Certificateholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe, including
the establishment of record dates. The consent of any Holder of a Certificate
given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate and of any Certificate issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate.
SECTION 6.5. Notices. All demands, notices and communications to CFC or
CFSC hereunder shall be in writing, personally delivered, or sent by telecopier
(subsequently confirmed in writing), reputable overnight courier or mailed by
certified mail, return receipt requested, and shall be deemed to have been given
upon receipt (a) in the case of CFC, to Conseco Finance Corp., 1100 Landmark
Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639, Attention: Chief
Financial Officer, or such other address as shall be designated by CFC in a
written notice delivered to the other party or (b) in case of CFSC, to Conseco
Finance Securitizations Corp., 300 Landmark Towers, 345 St. Peter Street, Saint
Paul, Minnesota 55102-1639, Attention: Chief Financial Officer or to such other
address of which notice shall have been given in accordance with this Section
6.5.
SECTION 6.6. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Related Documents set 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 and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.7. Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions
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<PAGE>
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 6.8. Intention of the Parties. The execution and delivery of this
Agreement and of each Subsequent Transfer Agreement shall constitute an
acknowledgment by CFC and CFSC that they intend that each assignment and
transfer herein and therein contemplated constitute a sale and assignment
outright, and not for security, of the Initial Contracts and the Initial
Collateral Security and the Subsequent Contracts and Subsequent Collateral
Security, as the case may be, conveying good title thereto free and clear of any
liens, from CFC to CFSC, and that the Initial Contracts and the Initial
Collateral Security and the Subsequent Contracts and Subsequent Collateral
Security shall not be a part of CFC's estate in the event of the bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of, or with respect to, CFC. In the event
that such conveyance is determined to be made as security for a Contract made by
CFSC, the Trust or the Certificateholders to CFC, the parties intend that this
Agreement and each Subsequent Transfer Agreement shall constitute a security
agreement under applicable law and that CFC shall have granted to CFSC a
security interest in all of CFC's right, title and interest in and to (i) the
Contracts, including the Collateral Security and all rights to receive payments
on or with respect to the Contracts (other than principal and interest due on
the Contracts on or before the applicable Cut-off Date or Subsequent Cut-off
Date), (ii) all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the creditor of such
Contract, (iii) all rights under all FHA/VA Regulations pertaining to any
Contract that is an FHA/VA Contract, (iv) the proceeds from the Errors and
Omissions Protection Policy and all rights under any blanket hazard insurance
policy to the extent they relate to a Manufactured Home securing a Contract, (v)
all documents contained in the Contract Files and the Land-and-Home Contract
Files, (vi) $8,308,281.36 paid by the underwriters of the Certificates to the
Trustee by order of the Seller out of the proceeds of the sale of the
Certificates (which such underwriters shall, by order of the Trust, remit
directly to the Seller pursuant to Section 2.01(c)), (vii) amounts on deposit in
the Capitalized Interest Account, (viii) amounts on deposit in the Pre-Funding
Account and (ix) all proceeds and products in any way derived from any of the
foregoing.
SECTION 6.9. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Minnesota without regard to the principles of
conflicts of laws thereof, and the obligations, rights and remedies of the
parties under this Agreement shall be determined in accordance with such laws.
SECTION 6.10. Counterparts. For the purpose of facilitating the execution
of this Agreement 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 all of which counterparts shall constitute but
one and the same instrument.
SECTION 6.11. Conveyance of the Initial Contracts and the Initial
Collateral Security to the Trust. CFC acknowledges that CFSC intends, pursuant
to the Pooling and Servicing Agreement, to convey the Initial Contracts and the
Initial Collateral Security, together with its rights under this Agreement, to
the Trust on the date hereof. CFC acknowledges and consents to such conveyance
and waives any further notice thereof and covenants and agrees that the
representations
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<PAGE>
and warranties of CFC contained in this Agreement and the rights of CFSC
hereunder are intended to benefit the Trustee, the Trust, and the
Certificateholders. In furtherance of the foregoing, CFC covenants and agrees to
perform its duties and obligations hereunder, in accordance with the terms
hereof for the benefit of the Trustee, the Trust, and the Certificateholders and
that, notwithstanding anything to the contrary in this Agreement, CFC shall be
directly liable to the Trustee and the Trust (notwithstanding any failure by the
Servicer or CFSC to perform its duties and obligations hereunder or under the
Pooling and Servicing Agreement) and that the Trustee may enforce the duties and
obligations of CFC under this Agreement against CFC for the benefit of the Trust
and the Certificateholders.
SECTION 6.12. Nonpetition Covenant. Neither CFSC nor CFC shall petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Trust (or, in the case of
CFC, against CFSC) under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust (or CFSC) or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Trust (or CFSC).
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Transfer Agreement to be
duly executed by their respective officers as of the 8th day of February, 2000.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By
------------------------------------------
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
CONSECO FINANCE CORP.,
as Seller
By
------------------------------------------
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
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<PAGE>
SCHEDULE A
SCHEDULE OF INITIAL CONTRACTS
A-1
<PAGE>
EXHIBIT A
FORM OF
SUBSEQUENT TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
CONSECO FINANCE CORP.
Seller
dated as of
________, _____
<PAGE>
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, _____, between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Conseco Finance Corp., a Delaware corporation, as seller ("CFC"),
pursuant to the Transfer Agreement, dated as of February 1, 2000, between CFSC
and CFC.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, CFC and CFSC are parties to a Transfer Agreement, dated as of
February 1, 2000 (as amended or supplemented, the "Transfer Agreement");
WHEREAS, pursuant to the Transfer Agreement and this Agreement, CFSC has
agreed to purchase from CFC and CFC is transferring to CFSC the Subsequent
Contracts and the Subsequent Collateral Security.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, CFSC and CFC, intending to be legally bound,
hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Transfer
Agreement.
"Agreement" means this Subsequent Transfer Agreement and all amendments
hereof and supplements hereto.
"Schedule of Subsequent Contracts" means the schedule of all manufactured
housing contracts sold and transferred pursuant to this Agreement attached
hereto as Schedule A, which Schedule of Subsequent Contracts shall supplement
the Schedule of Initial Contracts attached to the Transfer Agreement.
"Subsequent Contracts" means, for purposes of this Agreement, the
manufactured housing installment sales contracts and installment loan agreements
listed on the Schedule of Subsequent Contracts attached hereto as Schedule A,
including related security interests and all rights to receive payments on or
with respect thereto (other than principal and interest due on or before the
applicable Subsequent Cut-off Date).
"Subsequent Cut-off Date" shall mean, with respect to the Subsequent
Contracts conveyed hereby, ____________, _____.
"Subsequent Transfer Date" means the date of this Agreement.
2. Conveyance of the Subsequent Contracts and Subsequent Collateral
Security. Subject to the terms and conditions of this Agreement and the Transfer
Agreement, CFC hereby sells, transfers, assigns, and otherwise conveys to CFSC
without recourse (but without limitation of its obligations in this Agreement
and the Transfer Agreement), and CFSC hereby purchases, all right, title and
interest of CFC in and to the Subsequent Contracts and the Subsequent Collateral
Security, including (i) all rights to receive payments on or with respect to the
Subsequent Contracts (other than
Ex. A-1
<PAGE>
principal and interest due on the Subsequent Contracts, on or before the
applicable Subsequent Cut-off Date), (ii) all rights under every Hazard
Insurance Policy relating to a Manufactured Home securing a Subsequent Contract
for the benefit of the creditor of such Subsequent Contract, (iii) all rights
under all FHA/VA Regulations pertaining to any Subsequent Contract that is an
FHA/VA Contract, (iv) the proceeds from the Errors and Omissions Protection
Policy and all rights under any blanket hazard insurance policy to the extent
they relate to the Manufactured Homes, (v) all documents contained in the
Contract Files and the Land-and-Home Contract Files relating to the Subsequent
Contracts, and (vi) all proceeds and products of the foregoing. It is the
intention of CFC and CFSC that the transfer and assignment contemplated by this
Agreement shall constitute a sale of the Subsequent Contracts and the Collateral
Security from CFC to CFSC, conveying good title thereto free and clear of any
liens, and the Subsequent Contracts and the Collateral Security shall not be
part of CFC's estate in the event of the filing of a bankruptcy petition by or
against CFC under any bankruptcy or similar law. CFC's financial statements will
disclose that the Subsequent Contracts have been transferred by CFC to CFSC, and
by CFSC to the Trust, and are not available to satisfy claims of CFC's
creditors.
3. Purchase Price. Simultaneously with the conveyance of the Subsequent
Contracts and the Subsequent Collateral Security to CFSC, CFSC has paid or
caused to be paid to or upon the order of CFC, by wire transfer of immediately
available funds (representing certain proceeds to CFSC from the sale of the
Certificates on deposit in the Pre-Funding Account), the amount of funds as
specified below:
(i) Principal Balance of Subsequent Contracts: $________
(ii) Proceeds to CFC: $________
4. Representations and Warranties of CFC. CFC makes the following
representations and warranties, on which CFSC relies in purchasing the
Subsequent Contracts and the Subsequent Collateral Security and in transferring
the Subsequent Contracts and the Subsequent Collateral Security to the Trustee.
Such representations are made as of the execution and delivery of this
Agreement, but shall survive the sale, transfer and assignment of the Subsequent
Contracts and the Subsequent Collateral Security hereunder, and the sale,
transfer and assignment thereof by CFSC to the Trustee. CFC and CFSC agree that
CFSC will assign to the Trustee all of CFSC's rights under this Agreement, and
that the Trustee will thereafter be entitled to enforce this Agreement against
CFC in the Trust's own name.
(a) Schedule of Representations. The representations and warranties
set forth in Sections 3.02, 3.04 and 3.05 of the Pooling and Servicing
Agreement are true and correct.
(b) Organization and Good Standing. CFC has been duly organized and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and sell the
Subsequent Contracts and the Collateral Security transferred to CFSC.
Ex. A-2
<PAGE>
(c) Due Qualification. CFC is duly qualified to do business as a
foreign corporation and is in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification.
(d) Power and Authority. CFC has the power and authority to execute
and deliver this Agreement and to carry out its terms; CFC has full power
and authority to sell and assign the Subsequent Contracts and the
Subsequent Collateral Security to be sold and assigned to and deposited
with CFSC hereunder and has duly authorized such sale and assignment to
CFSC by all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by CFC by all
necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement has been duly
executed and delivered, shall effect a valid sale, transfer and assignment
of the Subsequent Contracts and the Collateral Security, enforceable
against CFC and creditors of and purchasers from CFC; and this Agreement
constitutes the legal, valid and binding obligations of CFC enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on
the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms of this Agreement shall not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice, lapse of time or both) a default
under, the certificate of incorporation or bylaws of CFC, or any indenture,
agreement, mortgage, deed of trust or other instrument to which CFC is a
party or by which it is bound, or result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement and the Transfer Agreement, or violate any law, order,
rule or regulation applicable to CFC of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over CFC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations pending
or, to CFC's knowledge, threatened against CFC, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over CFC or its properties (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent or the
consummation of any of the transactions contemplated by this Agreement,
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by CFC of its obligations under, or the
validity or enforceability of, this Agreement, or (iv) seeking to affect
adversely the federal income tax or other federal, state or local tax
attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Subsequent Contracts
and the Collateral Security hereunder.
(h) Insolvency. As of the Subsequent Cut-off Date and the Subsequent
Transfer Date, neither CFC nor CFSC is insolvent nor will either of them
have been made insolvent
Ex. A-3
<PAGE>
after giving effect to the conveyance set forth in Section 2 of this
Agreement, nor are any of them aware of any pending insolvency.
(i) Chief Executive Office. The chief executive office of CFC is
located at 1100 Landmark Towers, 345 St. Peter Street, Saint Paul,
Minnesota 55102-1639.
5. Representations and Warranties of CFSC. CFSC makes the following
representations and warranties, on which CFC relies in selling, assigning,
transferring and conveying the Subsequent Contracts and the Subsequent
Collateral Security to CFSC hereunder. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Subsequent Contracts and the Subsequent Collateral
Security hereunder.
(a) Organization and Good Standing. CFSC has been duly organized and
is validly existing and in good standing as a corporation under the laws of
the State of Minnesota, with the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and has,
full power, authority and legal right to acquire and own the Subsequent
Contracts and the Subsequent Collateral Security, and to transfer the
Subsequent Contracts and the Subsequent Collateral Security to the Trustee
pursuant to this Agreement.
(b) Due Qualification. CFSC is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect CFSC's ability to acquire the
Subsequent Contracts or the Subsequent Collateral Security or the validity
or enforceability of the Subsequent Contracts and the Subsequent Collateral
Security or to perform CFSC's obligations hereunder.
(c) Power and Authority. CFSC has the power, authority and legal right
to execute and deliver this Agreement and to carry out the terms hereof and
to acquire the Subsequent Contracts and the Subsequent Collateral Security
hereunder; and the execution, delivery and performance of this Agreement
and all of the documents required pursuant hereto have been duly authorized
by CFSC by all necessary action.
(d) No Consent Required. CFSC is not required to obtain the consent of
any other Person, or any consent, license, approval or authorization or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement, except for such as have been obtained, effected or made.
(e) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of CFSC, enforceable against CFSC in accordance with its
terms, subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other
similar laws and to general equitable principles.
Ex. A-4
<PAGE>
(f) No Violation. The execution, delivery and performance by CFSC of
this Agreement, the consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement do not and
will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of CFSC, or conflict
with or breach any of the terms or provisions of, or constitute (with or
without notice or lapse of time) a default under, any indenture, agreement,
mortgage, deed of trust or other instrument to which CFSC is a party or by
which CFSC is bound or to which any of its properties are subject, or
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument (other than the Pooling and Servicing Agreement
and the Subsequent Transfer Instrument), or violate any law, order, rule or
regulation, applicable to CFSC or its properties, of any federal or state
regulatory body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over CFSC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before any
court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that might materially
and adversely affect the performance by CFSC of its obligations under, or
the validity or enforceability of, this Agreement, or (iv) that may
adversely affect the federal or state income tax attributes of, or seeking
to impose any excise, franchise, transfer or similar tax upon, the transfer
and acquisition of the Subsequent Contracts and the Collateral Security to
the Trust.
In the event of any breach of a representation and warranty made by CFSC
hereunder, CFC covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the date on which all pass-through certificates
or other similar securities issued by the Trust, or a trust or similar vehicle
formed by CFSC, have been paid in full. CFC and CFSC agree that damages will not
be an adequate remedy for such breach and that this covenant may be specifically
enforced by CFSC or by the Trustee on behalf of the Trust.
6. Conditions Precedent. The obligation of CFSC to acquire the Subsequent
Contracts and the Subsequent Collateral Security hereunder is subject to the
satisfaction, on or prior to the Subsequent Transfer Date, of the following
conditions precedent, and CFC hereby confirms that each such condition is
satisfied:
(a) Representations and Warranties. Each of the representations and
warranties made by CFC in Section 4 of this Agreement and in Section 3.1 of
the Transfer Agreement is true and correct as of the date of this Agreement
and as of the Subsequent Transfer Date.
(b) Transfer Agreement Conditions. Each of the conditions set forth in
Section 2.3(b) of the Transfer Agreement applicable to the conveyance of
Subsequent Contracts and the Subsequent Collateral Security has been
satisfied.
Ex. A-5
<PAGE>
(c) Additional Information. CFC has delivered to CFSC such information
as was reasonably requested by CFSC to satisfy itself as to (i) the
accuracy of the representations and warranties set forth in Section 4 of
this Agreement and in Section 3.1 of the Transfer Agreement and (ii) the
satisfaction of the conditions set forth in this Section 6.
7. Ratification of Transfer Agreement. As supplemented by this Agreement,
the Transfer Agreement is in all respects ratified and confirmed and the
Transfer Agreement as so supplemented by this Agreement shall be read, taken and
construed as one and the same instrument.
8. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Minnesota without regard to the principles of conflicts of
laws thereof, and the obligations, rights and remedies of the parties under this
Agreement shall be determined in accordance with such laws.
9. Counterparts. For the purposes of facilitating the execution of this
Agreement 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 all of which counterparts shall constitute but one and the same
instrument.
10. Conveyance of the Subsequent Contracts and the Collateral Security to
the Trust. CFC acknowledges that CFSC intends, pursuant to a Subsequent Transfer
Instrument, to convey the Subsequent Contracts and the Subsequent Collateral
Security, together with its rights under this Agreement and under the Transfer
Agreement, to the Trustee on the date hereof. CFC acknowledges and consents to
such conveyance and waives any further notice thereof and covenants and agrees
that the representations and warranties of CFC contained in this Agreement and
the rights of CFSC hereunder and thereunder are intended to benefit Trustee, the
Trust and the Certificateholders. In furtherance of the foregoing, CFC covenants
and agrees to perform its duties and obligations hereunder and under this
Agreement and the Transfer Agreement, in accordance with the terms hereof and
thereof for the benefit of the Trustee, the Trust and the Certificateholders and
that, notwithstanding anything to the contrary in this Agreement or in the
Transfer Agreement, CFC shall be directly liable to the Trustee and the Trust
(notwithstanding any failure by CFSC to perform its duties and obligations
hereunder or under the Pooling and Servicing Agreement or the Transfer
Agreement) and that the Trustee may enforce the duties and obligations of CFC
under this Agreement and the Transfer Agreement against CFC for the benefit of
the Trust and the Certificateholders.
Ex. A-6
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By
------------------------------------------
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
CONSECO FINANCE CORP.,
as Seller
By
------------------------------------------
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
Ex. A-7
<PAGE>
EXHIBIT 8.1
February 8, 2000
Lehman Brothers Inc. Fitch IBCA, Inc.
Three World Trade Center One State Street Plaza
New York, NY 10285 32nd Floor
New York, NY 10084
Merrill Lynch, Pierce, Fenner &
Smith Incorporated Moody's Investors Service
North Tower 99 Church Street
World Financial Center New York, New York 10007
New York, NY 10281
U.S. Bank National Association
J.P. Morgan Securities Inc. Corporate Trust, 2nd Floor
60 Wall Street 180 East Fifth Street
New York, NY 10260 St. Paul, MN 55101
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Re: Conseco Finance Corp./Conseco Finance Securitizations Corp.
Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 2000-1
Ladies and Gentlemen:
We have acted as counsel for Conseco Finance Corp. ("Conseco") and Conseco
Finance Securitizations Corp. ("CFSC") in connection with their execution of a
Pooling and Servicing Agreement, dated as of February 1, 2000 (the "Pooling and
Servicing Agreement"), among Conseco, CFSC and U.S. Bank National Association,
as Trustee (the "Trustee"), and the establishment pursuant to the Pooling and
Servicing Agreement of
<PAGE>
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
Prudential Securities Incorporated
Fitch IBCA, Inc.
Moody's Investors Service, Inc.
U.S. Bank National Association
February 8, 2000
Page 2
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust
2000-1 (the "Trust"). All undefined capitalized terms used in this opinion have
the meanings given them in the Pooling and Servicing Agreement.
Pursuant to the Transfer Agreement, Conseco will transfer to CFSC a pool of
manufactured housing installment sale contracts and installment loan agreements
(the "Contracts"). Pursuant to the Pooling and Servicing Agreement, CFSC will
transfer the Contracts to the Trust and Conseco will act as Servicer of the
Contracts and provide a Limited Guarantee.
Conseco and CFSC have requested that we provide to you our opinion whether
the Master REMIC and Subsidiary REMIC will each be treated as a real estate
mortgage investment conduit ("REMIC") under the Internal Revenue Code of 1986,
as amended through the date hereof (the "Code"), under certain Treasury
Regulations concerning REMICs promulgated by the Treasury Department on December
23, 1992 (the "REMIC Regulations"), and under Minnesota law.
In rendering our opinion, we have examined the Pooling and Servicing
Agreement and such additional related documents, and we have reviewed such
questions of law, as we have considered necessary and appropriate for the
purposes of the opinion expressed herein.
Our opinion is based upon existing law and currently applicable Treasury
Department regulations, current published administrative positions of the
Internal Revenue Service contained in revenue rulings and revenue procedures,
and judicial decisions, all of which are subject to change, either prospectively
or retroactively, and to possibly differing interpretations, and is also based
on the representations and warranties set forth in the Pooling and Servicing
Agreement and the assumptions that Conseco and CFSC and the Trustee will at all
times comply with the requirements of the Pooling and Servicing Agreement,
including, without limitation, the requirement that a proper election to be
taxed as a REMIC is made for each of the Master REMIC and Subsidiary REMIC in
accordance
<PAGE>
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
Prudential Securities Incorporated
Fitch IBCA, Inc.
Moody's Investors Service, Inc.
U.S. Bank National Association
February 8, 2000
Page 3
with the Pooling and Servicing Agreement and the Code, and that the certificates
representing interests in the Trust will be issued as described in the Pooling
and Service Agreement and in the Prospectus Supplement relating to the Class A
Certificates, Class M Certificates and Class B Certificates.
Based upon the foregoing, it is our opinion that
1. The Master REMIC and Subsidiary REMIC created pursuant to the Pooling
and Servicing Agreement will each qualify as a REMIC under the Code and under
the REMIC Regulations. The Class A Certificates, Class M Certificates, Class B
Certificates and Class B-3I Certificates will evidence ownership of the "regular
interests" in the Master REMIC. The Class C Master Certificate will evidence
ownership of the single class of "residual interests" in such REMIC. The
Uncertificated Subsidiary Interests represent the "regular interests" in the
Subsidiary REMIC and the Class C Subsidiary Certificate will evidence the sole
class of "residual interests" in the Subsidiary REMIC.
2. For Minnesota income and franchise tax purposes the Trust will not be
subject to tax and the income of the Trust will be taxable to the holders of
interests therein, all in accordance with the provisions of the Code concerning
REMICs as amended through December 31, 1998.
3. Ownership of a Class A Certificate, Class M Certificate or Class B
Certificate will not be a factor in determining whether the owner thereof is
subject to Minnesota income or franchise taxes. Therefore, if the owner of a
Class A Certificate, Class M Certificate or Class B Certificate is not otherwise
subject to Minnesota income or franchise taxes in the State of Minnesota, the
owner will not become subject to such Minnesota taxes solely by virtue of owning
a Class A Certificate, Class M Certificate or Class B Certificate.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the laws of the State of
Minnesota. This opinion
<PAGE>
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
Prudential Securities Incorporated
Fitch IBCA, Inc.
Moody's Investors Service, Inc.
U.S. Bank National Association
February 8, 2000
Page 4
is delivered to you at the request of Conseco and CFSC solely for your use. This
opinion may not be circulated or republished to, or relied upon by, any other
person without our express prior written consent.
Very truly yours,
/s/ Briggs and Morgan, P.A.
