EXHIBIT 4.1
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 2001-C
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
and
CONSECO FINANCE CORP.
as Originator and Servicer
and
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
of
CONSECO FINANCE HOME EQUITY LOAN TRUST 2001-C
Dated as of August 1, 2001
TABLE OF CONTENTS
Article I DEFINITIONS....................................................2
Section 1.01. General......................................................2
Section 1.02. Specific Terms...............................................2
Section 1.03. Calculations................................................46
Article II ESTABLISHMENT OF TRUST; TRANSFER OF LOANS.....................46
Section 2.01. Closing.....................................................46
Section 2.02. Conditions to the Closing...................................47
Section 2.03. Conveyance of the Subsequent Loans..........................48
Section 2.04. Acceptance by Trustee.......................................51
Section 2.05. REMIC Provisions............................................51
Section 2.06. Seller Option to Substitute for Prepaid Loans...............56
Article III REPRESENTATIONS AND WARRANTIES................................57
Section 3.01. Representations and Warranties Regarding the Seller.........57
Section 3.02. Representations and Warranties Regarding Each Loan..........59
Section 3.03. Additional Representations and Warranties...................62
Section 3.04. Representations and Warranties Regarding the Loans
in the Aggregate............................................62
Section 3.05. Representations and Warranties Regarding the Loan Files.....64
Section 3.06. Repurchases of Loans for Breach of Representations and
Warranties..................................................65
Section 3.07. No Repurchase Under Certain Circumstances...................67
Section 3.08. Certain Representations and Warranties Regarding
Perfection of the Loans.....................................68
Article IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY
INTERESTS.....................................................68
Section 4.01. Transfer of Loans............................................68
Section 4.02. Costs and Expenses...........................................69
Article V SERVICING OF LOANS............................................69
Section 5.01. Responsibility for Loan Administration......................69
Section 5.02. Standard of Care............................................69
Section 5.03. Records.....................................................70
Section 5.04. Inspection..................................................70
Section 5.05. Certificate Account.........................................70
Section 5.06. Enforcement.................................................73
Section 5.07. Trustee to Cooperate........................................75
Section 5.08. Costs and Expenses..........................................75
Section 5.09. Maintenance of Insurance....................................76
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Section 5.10. Merger or Consolidation of Servicer.........................76
Article VI REPORTS AND TAX MATTERS.......................................76
Section 6.01. Monthly Reports.............................................76
Section 6.02. Officer's Certificate.......................................76
Section 6.03. Other Data..................................................77
Section 6.04. Annual Report of Accountants................................77
Section 6.05. Statements to Certificateholders and the Class R
Certificateholder...........................................77
Section 6.06. Payment of Taxes............................................79
Article VII SERVICE TRANSFER..............................................80
Section 7.01. Events of Termination.......................................80
Section 7.02. Transfer....................................................81
Section 7.03. Trustee to Act; Appointment of Successor....................82
Section 7.04. Notification to Certificateholders and Class R
Certificateholder...........................................82
Section 7.05. Effect of Transfer..........................................83
Section 7.06. Transfer of Certificate Account.............................83
Article VIII PAYMENTS......................................................83
Section 8.01. Monthly Payments............................................83
Section 8.02. Advances....................................................84
Section 8.03. [Reserved]..................................................85
Section 8.04. Permitted Withdrawals from the Certificate Account;
Payments....................................................85
Section 8.05. Reassignment of Repurchased and Replaced Loans..............91
Section 8.06. Class R Certificateholder's Purchase Option; Increase
Class A-5 Interest Rate.....................................91
Section 8.07. Intermediate REMIC and Subsidiary REMIC Distributions.......93
Section 8.08. Pre-Funding Account.........................................96
Section 8.09. Yield Maintenance Reserve Fund..............................97
Section 8.10. Basis Risk Reserve Fund.....................................98
Section 8.11. Allocation of Realized Loss Amounts.........................99
Article IX THE CERTIFICATES AND THE CLASS R CERTIFICATE..................99
Section 9.01. The Certificates and the Class R Certificate................99
Section 9.02. Registration of Transfer and Exchange of Certificates
and the Class R Certificate................................100
Section 9.03. No Charge; Disposition of Void Certificates or Class R
Certificate................................................106
Section 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or
Class R Certificate........................................106
Section 9.05. Persons Deemed Owners......................................106
Section 9.06. Access to List of Certificateholders' and Class R
Certificateholder's Names and Addresses....................107
Section 9.07. Authenticating Agents......................................107
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Article X INDEMNITIES..................................................107
Section 10.01. Real Estate................................................107
Section 10.02. Liabilities to Obligors....................................108
Section 10.03. Tax Indemnification........................................108
Section 10.04. Servicer's Indemnities.....................................108
Section 10.05. Operation of Indemnities...................................108
Section 10.06. REMIC Tax Matters..........................................109
Article XI THE TRUSTEE..................................................109
Section 11.01. Duties of Trustee..........................................109
Section 11.02. Certain Matters Affecting the Trustee......................110
Section 11.03. Trustee Not Liable for Certificates, Class R
Certificate or Loans.......................................111
Section 11.04. Trustee May Own Certificates...............................111
Section 11.05. Rights of Certificateholders to Direct Trustee and to
Waive Events of Termination................................112
Section 11.06. The Servicer to Pay Trustee's Fees and Expenses............112
Section 11.07. Eligibility Requirements for Trustee.......................113
Section 11.08. Resignation or Removal of Trustee..........................113
Section 11.09. Successor Trustee..........................................114
Section 11.10. Merger or Consolidation of Trustee.........................114
Section 11.11. Tax Returns................................................115
Section 11.12. Obligor Claims.............................................115
Section 11.13. Appointment of Co-Trustee or Separate Trustee..............116
Section 11.14. Xxxxxxx and U.S. Bancorp...................................117
Section 11.15. Trustee Advances...........................................117
Article XII MISCELLANEOUS................................................117
Section 12.01. Servicer Not to Resign; Delegation of Servicing Duties.....117
Section 12.02. Conseco Finance Corp. and Seller Not to Engage in Certain
Transactions with Respect to the Trust.....................118
Section 12.03. Maintenance of Office or Agency............................118
Section 12.04. Termination................................................118
Section 12.05. Acts of Certificateholders and Class R Certificateholder...121
Section 12.06. Assignment or Delegation by Company........................122
Section 12.07. Amendment..................................................123
Section 12.08. Notices....................................................125
Section 12.09. Merger and Integration.....................................126
Section 12.10. Headings...................................................126
Section 12.11. Governing Law..............................................126
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Exhibit A -- Form of Class A-[1][2][3][4][5][IO] Certificate
Exhibit B -- Form of Class M-[1][2] Certificate
Exhibit C -- Form of Class B-[1][2] Certificate
Exhibit D -- Form of Assignment
Exhibit E -- Form of Certificate of Officer
Exhibit F -- Form of Opinion of Counsel for the Originator
Exhibit G -- Form of Trustee's Acknowledgment
Exhibit H -- Form of Certificate of Servicing Officer
Exhibit I -- Form of Class B-3I Certificate
Exhibit J-1 -- Form of Certificate Regarding Repurchased Loans
Exhibit J-2 -- Form of Certificate Regarding Repurchased Loans
Exhibit J-3 -- Form of Certificate Regarding Substitution for Prepaid Loans
Exhibit K -- Form of Representation Letter
Exhibit L -- List of Initial and Additional Loans
Exhibit M -- Form of Monthly Report
Exhibit N -- Form of Addition Notice
Exhibit O -- Form of Subsequent Transfer Instrument
Exhibit P -- Form of Officer's Certificate (Subsequent Transfer)
Exhibit Q -- Form of Class R Certificate
iv
AGREEMENT, dated as of August 1, 2001, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware as
originator of the home equity loans described herein (the "Originator"), and as
Servicer (the "Servicer"), and U.S. Bank Trust 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 (the "Trustee") of Conseco
Finance Home Equity Loan Trust 2001-C (the "Trust").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
purchases, originates and services home equity loans, which loans provide for
installment payments by or on behalf of the borrowers and grant mortgages, deeds
of trust or security deeds on certain real estate securing such loans;
WHEREAS, the Seller, in the ordinary course of its business, acquires pools
of home equity loans and other receivables from Conseco Finance Corp. and
arranges the securitization of those receivables;
WHEREAS, the Seller intends to sell the Certificates (as defined herein),
to be issued hereunder in twelve classes (each, a "Class"), which, together with
the Class R Certificate (as defined herein), in the aggregate will evidence the
entire beneficial ownership interest in the Trust Fund (as defined herein),
consisting primarily of the Loans (as defined herein);
WHEREAS, the Seller, the Originator, the Servicer and the Trustee wish to
set forth the terms and conditions on which the Trustee, on behalf of the
Certificateholders (as defined herein) and Class R Certificateholder (as defined
herein) will acquire the Loans and the Servicer will service the Loans;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as provided herein:
1
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 this Agreement.
Section 1.02. Specific Terms.
"Addition Notice" means, with respect to the transfer of Subsequent Loans
to the Trust pursuant to Section 2.03 of this Agreement, a notice, substantially
in the form of Exhibit N, which shall be given not later than five Business Days
prior to the related Subsequent Transfer Date, of the Seller's designation of
Subsequent Loans, as applicable, to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Loans.
"Additional Loan" means a Loan identified as such on the List of Loans
attached hereto as Exhibit L.
"Accrual Period" means with respect to any Payment Date, the period from
and including the prior Payment Date (or, with respect to the first Payment
Date, from and including the Closing Date) to but excluding such Payment Date.
"Adjusted Net WAC Cap Rate" means, for any Payment Date, the Net WAC Cap
Rate minus a fraction, expressed as a percentage,
the numerator of which is the product of
(a) the Class A-IO Interest Rate for such Payment Date times
(b) (i) the sum of the Subsidiary Interest Adjusted Principal
Balance of the (1) Class S-2(1) Interest through and including the
August 2002 Payment Date, (2) Class S-2(2) Interest through and
including the February 2003 Payment Date, (3) Class S-2(3) Interest
through and including the August 2003 Payment Date and (4) Class
S-2(4) Interest through and including the February 2004 Payment Date,
and (ii) 0 after the February 2004 Payment Date, and
the denominator of which is the sum of the Subsidiary Interest Principal
Balance of the Class S-1 and Class S-2 Interests.
2
"Advance" means, with respect to any Payment Date, the amounts, if any,
deposited by the Servicer or the Trustee, as applicable, in the Certificate
Account for such Payment Date pursuant to Section 8.02.
"Advance Payment" means any payment by an Obligor in advance of the Due
Period in which it would be due under such Loan 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.
"Aggregate Certificate Principal Balance" means the sum of the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class M-1, Class M-2, Class B-1,
Class B-2 and Class P Principal Balances.
"Agreement" means this Pooling and Servicing Agreement, as it may be
amended from time to time.
"Amount Available" means, for any Payment 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
(other than any amounts therein attributable to Prepayment
Charges), plus
(ii) any Advances deposited in the Certificate Account with
respect to such Payment Date, minus
(b) the sum of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from the
Certificate Account pursuant to clauses (ii) through (v) of
Section 8.04(a), and
(iii) any amounts on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period
representing collections in respect of Principal Prepayments
in Full (other than any amounts referred to in Section
2.06(vii)) on Loans for which a substitution has been made
in accordance with Section 2.06.
3
"Amount Held for Future Distribution" means, for any Payment Date, the
total of the amounts held in the Certificate Account in respect of the Loans on
the last day of the preceding Due Period on account of Advance Payments in
respect of such Due Period.
"Applicants" has the meaning assigned in Section 9.06.
"Authenticating Agent" means any authenticating agent appointed pursuant to
Section 9.07.
"Average Sixty-Day Delinquency Ratio Test" means, to be considered
"satisfied" for any Payment Date, that the arithmetic average of the Sixty-Day
Delinquency Ratio for the Loans for such Payment Date and for the two
immediately preceding Payment Dates is less than or equal to 38% of the Senior
Enhancement Percentage for the Loans.
"Balloon Loan" means a Loan that provides for the payment of the
unamortized principal balance of such Loan in a single payment at the maturity
of such Loan that is greater than the preceding monthly payments.
"Basis Risk Carryover Shortfall" means the Class A Basis Risk Carryover
Shortfall, the Class M-1 Basis Risk Carryover Shortfall, the Class M-2 Basis
Risk Carryover Shortfall, the Class B-1 Basis Risk Carryover Shortfall or the
Class B-2 Basis Risk Carryover Shortfall, as applicable.
"Basis Risk Reserve Fund" means a separate trust account created and
maintained pursuant to Section 8.10 in the name of the Trust in an Eligible
Institution.
"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 the
Person taking action hereunder are authorized or obligated by law,
executive order, or governmental decree to be closed.
"Calculation Agent" means the Person who establishes LIBOR with respect to
each Interest Reset Period. The Calculation Agent shall be the Trustee unless
the Trustee is unable or unwilling so to act, in which case the Calculation
Agent shall be a financial institution appointed by the Seller.
"Cap Provider Fee" means, with respect to each Payment Date occurring prior
to March 1, 2004, $113,500.
4
"Certificate" means a Certificate for Home Equity Loans, Series 2001-C,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-IO, Class M-1,
Class M-2, Class B-1, Class B-2, Class B-3I or Class P Certificate, all (except
the Class P Certificate) executed and delivered by the Trustee substantially in
the form of Exhibit A, B, C or I, as applicable, but does not include the Class
R Certificate.
"Certificate Account" means a separate trust account created and maintained
pursuant to Section 5.05 in the name of the Trust in an Eligible Institution.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate or, if Definitive Certificates have been issued,
Certificateholders.
"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 or Class R 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 Certificate or Class R Certificate
registered in the name of the Originator or the Seller or any of their
Affiliates shall be deemed not to be outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite Percentage Interest necessary to effect any such consent, request,
waiver or demand has been obtained; provided, however, that, solely for the
purpose of determining whether the Trustee is entitled to rely upon any such
consent, waiver, request or demand, only Certificates or Class R Certificate
which the Trustee knows to be so owned shall be so disregarded.
"Class A," "Class A-IO," "Class M," "Class B," `Class B-3I," "Class P" or
"Class R" means pertaining to Class A Certificates, Class A-IO Certificates,
Class M Certificates, Class B Certificates, Class B-3I Certificates, Class P
Certificate and/or Class R Certificate, as the case may be.
"Class A Certificates" means the Class A-1, Class A-2, Class A-3, Class A-4
and Class A-5 Certificates, collectively.
"Class A Current Interest Amount" means, for any Payment Date, an amount
equal to the sum of (a) one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding September 17,
2001) at (i) the Class A-1 Interest Rate on the Class-1 Principal Balance, (ii)
the Class A-2 Interest Rate on the Class-2 Principal Balance, (iii) the Class
A-3 Interest Rate on the Class-3 Principal Balance, (iv) the Class A-4 Interest
Rate on the Class-4 Principal Balance, and (v) the Class A-5 Interest Rate on
the Class-5 Principal Balance, in each case to be calculated immediately prior
to such Payment Date.
"Class A Formula Principal Distribution Amount" means, for any Payment
Date, the excess of:
5
(a) the Class A Principal Balance immediately prior to such Payment Date
over
(b) the lesser of
(i) 61.50% (or 60.50%, if the OC Stepup Trigger is in effect) of the
Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereto, and unscheduled
principal collections received during the related Due Period),
and
(ii) the Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereto, and unscheduled
principal collections received during the related Due Period),
less the OC Floor.
"Class A Interest Carry Forward Amount" means, with respect to any Payment
Date, the excess, if any, of the Class A Current Interest Amount for such
Payment Date over the amount actually paid on the Class A Certificates in
respect of the Class A Current Interest Amount on such Payment Date.
"Class A Principal Balance" means, for any Payment Date, the sum of the
Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Principal Balances.
"Class A-1 Basis Risk Carryover Shortfall" means, for any Payment Date, the
excess, if any, of
(a) the amount of interest that the Class A-1 Certificates would have been
entitled to receive on such Payment Date (but not in excess of 15.00%
per annum) had the Class A-1 Interest Rate not been calculated based
on the Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class A-1 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate (but
not in excess of 15.00% per annum).
"Class A-1 Certificate" means any one of the Class A-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class A-1 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class A-1 Certificateholders pursuant to Sections 8.04,
8.09 and 8.10 on such Payment Date.
6
"Class A-1 Interest Rate" means a floating rate per annum equal to the
lesser of (a) LIBOR plus the Class A-1 Margin, and (b) the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum.
"Class A-1 Margin" means 0.14%.
"Class A-1 Principal Balance" means, for any Payment Date, the Original
Class A-1 Principal Balance less all amounts previously distributed to Holders
of Class A-1 Certificates in respect of principal.
"Class A-2 Basis Risk Carryover Shortfall" means, for any Payment Date, the
excess, if any, of
(a) the amount of interest that the Class A-2 Certificates would have been
entitled to receive on such Payment Date had the Class A-2 Interest
Rate not been calculated based on the Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class A-2 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate.
"Class A-2 Certificate" means any one of the Class A-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class A-2 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class A-2 Certificateholders pursuant to Sections 8.04 and
8.10 on such Payment Date.
"Class A-2 Interest Rate" means a rate equal to the lesser of (a) 5.03% per
annum, and (b) the Adjusted Net WAC Cap Rate.
"Class A-2 Principal Balance" means, for any Payment Date, the Original
Class A-2 Principal Balance less all amounts previously distributed to Holders
of Class A-2 Certificates in respect of principal.
"Class A-3 Basis Risk Carryover Shortfall" means, for any Payment Date, the
excess, if any, of
(a) the amount of interest that the Class A-3 Certificates would have been
entitled to receive on such Payment Date had the Class A-3 Interest
Rate not been calculated based on the Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class A-3 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate.
7
"Class A-3 Certificate" means any one of the Class A-3 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class A-3 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class A-3 Certificateholders pursuant to Sections 8.04 and
8.10 on such Payment Date.
"Class A-3 Interest Rate" means a rate equal to the lesser of (a) 5.39% per
annum, and (b) the Adjusted Net WAC Cap Rate.
"Class A-3 Principal Balance" means, for any Payment Date, the Original
Class A-3 Principal Balance less all amounts previously distributed to Holders
of Class A-3 Certificates in respect of principal.
"Class A-4 Basis Risk Carryover Shortfall" means, for any Payment Date, the
excess, if any, of
(a) the amount of interest that the Class A-4 Certificates would have been
entitled to receive on such Payment Date had the Class A-4 Interest
Rate not been calculated based on the Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class A-4 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate.
"Class A-4 Certificate" means any one of the Class A-4 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class A-4 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class A-4 Certificateholders pursuant to Sections 8.04 and
8.10 on such Payment Date.
"Class A-4 Interest Rate" means a rate equal to the lesser of (a) 6.19% per
annum, and (b) the Adjusted Net WAC Cap Rate.
"Class A-4 Principal Balance" means, for any Payment Date, the Original
Class A-4 Principal Balance less all amounts previously distributed to Holders
of Class A-4 Certificates in respect of principal.
"Class A-5 Basis Risk Carryover Shortfall" means, for any Payment Date, the
excess, if any, of
8
(a) the amount of interest that the Class A-5 Certificates would have been
entitled to receive on such Payment Date had the Class A-5 Interest
Rate not been calculated based on the Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class A-5 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate.
"Class A-5 Certificate" means any one of the Class A-5 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class A-5 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class A-5 Certificateholders pursuant to Sections 8.04 and
8.10 on such Payment Date.
"Class A-5 Interest Rate" means a rate equal to the lesser of (a) 6.79% per
annum (or to the extent provided in Section 8.06(c), 7.29%), and (b) the
Adjusted Net WAC Cap Rate.
"Class A-5 Principal Balance" means, for any Payment Date, the Original
Class A-5 Principal Balance less all amounts previously distributed to Holders
of Class A-5 Certificates in respect of principal.
"Class A-IO Certificates" means the Class A-IO Certificates executed and
delivered by the Trustee and authenticated by the Certificate Registrar
substantially in the term set forth in Exhibit A-2 and evidencing an interest
designated as a "regular interest" in the Master REMIC for purposes of the REMIC
Provisions.
"Class A-IO Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class A-IO Interest Rate on the Class A-IO Notional Amount for the preceding
Payment Date or, in the case of the first Payment Date, the Original Class A-IO
Notional Amount.
"Class A-IO Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class A-IO Certificateholder pursuant to Section 8.04 on
such Payment Date.
"Class A-IO Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class A-IO Current Interest Amount for
such Payment Date over the amount actually paid on the Class A-IO Certificates
in respect of the Class A-IO Current Interest Amount on such Payment Date.
"Class A-IO Interest Rate" means a rate per annum equal to 11.00% for the
Payment Dates in September 2001 to and including August 2002, and 10.75% for
Payment Dates thereafter.
9
"Class A-IO Notional Amount" means, with respect to each Payment Date, the
lesser of (a) from and including the Closing Date through the July 2002 Payment
Date, $130,000,000, from and including the August 2002 Payment Date through the
January 2003 Payment Date, $110,000,000, from and including the February 2003
Payment Date through the July 2003 Payment Date, $75,000,000, from and including
the August 2003 Payment Date through the January 2004 Payment Date, $64,000,000,
and for any Payment Date thereafter, $0, and (b) the Pool Scheduled Principal
Balance.
"Class B Certificates" means the Class B-1 and Class B-2 Certificates,
collectively.
"Class B-1 Allocated Realized Loss Amount" means, for any Payment Date,
that portion, if any, of the Realized Loss Amount for such Payment Date
allocated to the Class B-1 Certificates in accordance with Section 8.11(a).
"Class B-1 Allocated Realized Loss Interest Amount" means, with respect to
any Payment Date, interest accrued during the related Accrual Period at the
Class B-1 Interest Rate on the Unpaid Class B Realized Loss Amount for the
immediately preceding Payment Date (after giving effect to any payment in
reduction thereof on such Payment Date pursuant to Section 8.04(e)(viii)(B)).
"Class B-1 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class B-1 Certificates would have been
entitled to receive on such Payment Date (but not in excess of 15.00%
per annum) had the Interest Rate for the Class B-1 Certificates not
been calculated based on the related Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class B-1 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate (but
not in excess of 15.00% per annum).
"Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class B-1 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class B-1 Interest Rate on the Class B-1 Principal Balance for such Payment
Date.
"Class B-1 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class B-1 Certificateholders pursuant to Sections 8.04,
8.09 and 8.10 on such Payment Date.
10
"Class B-1 Formula Principal Distribution Amount" means, for any Payment
Date, the excess of:
(a) of the sum of:
(i) the Class A Principal Balance (after giving effect to the
distributions of the Class A Formula Principal Distribution
Amount for such Payment Date);
(ii) the Class M-1 Principal Balance (after giving effect to the
distributions of the Class M-1 Formula Principal Distribution
Amount for such Payment Date);
(iii) the Class M-2 Principal Balance (after giving effect to the
distributions of the Class M-2 Formula Principal Distribution
Amount for such Payment Date); and
(iv) the Class B-1 Principal Balance immediately prior to such Payment
Date over
(b) the lesser of
(i) 94.00% (or 93.00%, if an OC Stepup Trigger is in effect) of the
Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period) and
(ii) the Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period),
less the OC Floor.
"Class B-1 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class B-1 Current Interest Amount for
such Payment Date over the amount actually paid on the Class B-1 Certificates in
respect of the Class B-1 Current Interest on such Payment Date.
"Class B-1 Interest Rate" means a floating rate per annum equal to the
lesser of (a) LIBOR plus the Class B-1 Margin, and (b) the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum.
"Class B-1 Margin" means 1.85%.
11
"Class B-1 Principal Balance" means, as to any Payment Date, the Original
Class B Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class B-1 Certificates on prior
Payment Dates on account of principal, plus
(b) all Class B-1 Allocated Realized Loss Amounts prior to such Payment
Date.
"Class B-2 Allocated Realized Loss Amount" means, for any Payment Date,
that portion, if any, of the Realized Loss Amount for such Payment Date
allocated to the Class B-2 Certificates in accordance with Section 8.11(b).
"Class B-2 Allocated Realized Loss Interest Amount" means, with respect to
any Payment Date, interest accrued during the related Accrual Period at the
Class B-2 Interest Rate on the Unpaid Class B-2 Realized Loss Amount for the
immediately preceding Payment Date (after giving effect to any payment in
reduction thereof on such Payment Date pursuant to Section 8.04(e)(x)(B)).
"Class B-2 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class B-2 Certificates would have been
entitled to receive on such Payment Date (but not in excess of 15.00%
per annum) had the Interest Rate for the Class B-2 Certificates not
been calculated based on the related Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class B-2 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate (but
not in excess of 15.00% per annum).
"Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class B-2 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class B-2 Interest Rate on the Class B-2 Principal Balance for such Payment
Date.
"Class B-2 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class B-2 Certificateholders pursuant to Sections 8.04,
8.09 and 8.10 on such Payment Date.
"Class B-2 Formula Principal Distribution Amount" means, for any Payment
Date, the excess of:
12
(a) of the sum of:
(i) the Class A Principal Balance (after giving effect to the
distributions of the Class A Formula Principal Distribution
Amount for such Payment Date);
(ii) the Class M-1 Principal Balance (after giving effect to the
distributions of the Class M-1 Formula Principal Distribution
Amount for such Payment Date);
(iii) the Class M-2 Principal Balance (after giving effect to the
distributions of the Class M-2 Formula Principal Distribution
Amount for such Payment Date);
(iv) the Class B-1 Principal Balance (after giving effect to the
distributions of the Class B-1 Formula Principal Distribution
Amount for such Payment Date); and
(v) the Class B-2 Principal Balance immediately prior to such Payment
Date over
(b) the lesser of
(i) 97.50% (or 96.50%, if an OC Stepup Trigger is in effect) of the
Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period) and
(ii) the Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period),
less the OC Floor.
"Class B-2 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class B-2 Current Interest Amount for
such Payment Date over the amount actually paid on the Class B-2 Certificates in
respect of the Class B-2 Current Interest on such Payment Date.
"Class B-2 Interest Rate" means a floating rate per annum equal to the
lesser of (a) LIBOR plus the Class B-2 Margin, and (b) the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum.
"Class B-2 Margin" means 4.00%
13
"Class B-2 Principal Balance" means, as to any Payment Date, the Original
Class B-2 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class B-2 Certificates on prior
Payment Dates on account of principal, plus
(b) all Class B-2 Allocated Realized Loss Amounts prior to such Payment
Date.
"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 I 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 Payment Date, an amount
equal to the sum of (A) the lesser of (i) the Class B-3I Formula Distribution
Amount for such Payment Date and (ii) the Excess Cashflow for such Payment Date
minus all amounts distributed on that Payment Date under Sections
8.04(e)(i)-(xi) and (B) the amount, if any, by which the Class B-3I Formula
Distribution Amount on the preceding Payment Date exceeds the Class B-3I
Distribution Amount on such preceding Payment Date.
"Class B-3I Formula Distribution Amount" means, as to any Payment Date, an
amount equal to the product of (i) the Class B-3I Interest Rate for such Payment
Date and (ii) the Class B-3I Notional Amount.
"Class B-3I Notional Amount" means $600,000,000 for the first Payment Date
and, for any other Payment Date, the sum of the Pool Scheduled Principal Balance
and the Pre-Funded Amount as of the immediately preceding Payment Date.
"Class B-3I Interest Rate" means the excess of (i) the Adjusted Net WAC Cap
Rate over (ii) the product of (A) two and (B) the weighted average Interest Rate
of the Class I-Accrual Interest and the Intermediate REMIC Accretion Directed
Interests, provided that for this purpose the Interest Rate for the Class
I-Accrual Interest shall be subject to a cap of zero and the Interest Rate for
each Intermediate REMIC Accretion Directed Interest shall not exceed the
Interest Rate on its Corresponding Certificate Class.
"Class C Certificates" means the Class C Certificates as described in the
Prospectus Supplement, dated August 2, 2001 (the "Prospectus Supplement"),
relating to the offering of the Class A, Class M and Class B-1 Certificates.
Neither the Trust nor any of the Subsidiary, Intermediate or Master REMICs will
issue any Class C Certificates. The distribution of amounts to the Class C
Certificates described in the Prospectus Supplement will instead be distributed
to the Class B-3I and Class R Certificates pursuant to Section 8.04 and to Green
Tree Finance Corp.--Two or the Holder of the Class B-3I Certificateholder
pursuant to Sections 8.09 and 8.10.
"Class I-AIO" means any one or more individual components of the Class
I-AIO Interest, as the case may be.
14
"Class I-AIO Interest" means the Class I-AIO(1), Class I-AIO(2), Class
I-AIO(3), Class I-AIO(4), Class I-AIO(5), Class I-AIO(6), Class I-AIO(7) and
Class I-AIO(8) Interests, collectively.
"Class M Certificates" means the Class M-1 and Class M-2 Certificates,
collectively.
"Class M-1 Allocated Realized Loss Amount" means, with respect to any
Payment Date, that portion, if any, of the Realized Loss Amount for such Payment
Date allocated to the Class M-1 Certificates in accordance with Section 8.11(a).
"Class M-1 Allocated Realized Loss Interest Amount" means, with respect to
any Payment Date, interest accrued during the related Accrual Period at the
Class M-1 Interest Rate on the Unpaid Class M-1 Realized Loss Amount for the
immediately preceding Payment Date (after giving effect to any payment in
reduction thereof on such Payment Date pursuant to Section 8.04(e)(iv)(B)).
"Class M-1 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of
(a) the amount of interest that the Class M-1 Certificates would have been
entitled to receive on such Payment Date (but not in excess of 15.00%
per annum) had the Interest Rate for the Class M-1 Certificates not
been calculated based on the related Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class M-1 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate (but
not in excess of 15.00% per annum).
"Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class M-1 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class M-1 Interest Rate on the Class M-1 Principal Balance for such Payment
Date.
"Class M-1 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class M-1 Certificateholders pursuant to Sections 8.04,
8.09 and 8.10 on such Payment Date.
"Class M-1 Formula Principal Distribution Amount" means, for any Payment
Date, the excess of
(a) the sum of
15
(i) the Class A Principal Balance for such Payment Date (after giving
effect to the distribution of the Class A Formula Principal
Distribution Amount for such Payment Date), plus
(ii) the Class M-1 Principal Balance immediately prior to such Payment
Date, over
(b) the lesser of
(i) the product of 76.50% (or 75.50%, if an OC Stepup Trigger is in
effect) of the Pool Scheduled Principal Balance as of the last
day of the related Due Period (after giving effect to scheduled
principal payments during the related Due Period, to the extent
received or advanced pursuant to Section 8.02 hereof, and
unscheduled principal collections received during the related Due
Period), and
(ii) the Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period),
less the OC Floor.
"Class M-1 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class M-1 Current Interest Amount for
such Payment Date over the amount actually paid on the Class M-1 Certificates in
respect of the Class M-1 Current Interest Amount on such Payment Date.
"Class M-1 Interest Rate" means a floating rate per annum equal to the
lesser of (a) LIBOR plus the Class M-1 Margin, and (b) the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum.
"Class M-1 Margin" means 0.70%.
"Class M-1 Principal Balance" means, as to any Payment Date, the Original
Class M-1 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class M-1 Certificates on prior
Payment Dates on account of principal, plus
(b) all Class M-1 Allocated Realized Loss Amounts prior to such Payment
Date.
"Class M-2 Allocated Realized Loss Amount" means, with respect to any
Payment Date, that portion, if any, of the Realized Loss Amount for such Payment
Date allocated to the Class M-2 Certificates in accordance with Section 8.11(c).
16
"Class M-2 Allocated Realized Loss Interest Amount" means, with respect to
any Payment Date, interest accrued during the related Accrual Period at the
Class M-2 Interest Rate on the Unpaid Class M-2 Realized Loss Amount for the
immediately preceding Payment Date (after giving effect to any payment in
reduction thereof on such Payment Date pursuant to Section 8.04(e)(vi)(B)).
"Class M-2 Basis Risk Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any of
(a) the amount of interest that the Class M-2 Certificates would have been
entitled to receive on such Payment Date (but not in excess of 15.00%
per annum) had the Interest Rate for the Class M-2 Certificates not
been calculated based on the related Adjusted Net WAC Cap Rate, over
(b) the amount of interest that the Class M-2 Certificates received on
such Payment Date based on the related Adjusted Net WAC Cap Rate (but
not in excess of 15.00% per annum).
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class M-2 Certificates" means the Class M-2 Certificates issued by the
Issuer pursuant to the Indenture.
"Class M-2 Current Interest Amount" means, with respect to any Payment
Date, an amount equal to interest accrued during the related Accrual Period at
the Class M-2 Interest Rate on the Class M-2 Principal Balance.
"Class M-2 Distribution Amount" means, for any Payment Date, the amount to
be distributed to the Class M-2 Certificateholders pursuant to Sections 8.04,
8.09 and 8.10 on such Payment Date.
"Class M-2 Formula Principal Distribution Amount" means, for any Payment
Date, the excess of
(a) the sum of
(i) the Class A Principal Balance for such Payment Date (after giving
effect to the distribution of the Class A Formula Principal
Distribution Amount for such Payment Date), plus
(ii) the Class M-1 Principal Balance for such Payment Date (after
giving effect to the distribution of the Class M-1 Formula
Principal Distribution Amount for such Payment Date), plus
17
(iii) the Class M-2 Principal Balance immediately prior to such
Payment Date, over
(b) the lesser of
(i) 87.50% (or 86.50%, if an OC Stepup Trigger is in effect) of the
Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period) and
(ii) the Pool Scheduled Principal Balance as of the last day of the
related Due Period (after giving effect to scheduled principal
payments during the related Due Period, to the extent received or
advanced pursuant to Section 8.02 hereof, and unscheduled
principal collections received during the related Due Period),
less the OC Floor.
"Class M-2 Interest Carry Forward Amount" means, with respect to any
Payment Date, the excess, if any, of the Class M-2 Current Interest Amount for
such Payment Date over the amount actually paid on the Class M-2 Certificates in
respect of the Class M-2 Current Interest on such Payment Date.
"Class M-2 Interest Rate" means a floating rate per annum equal to the
lesser of (a) LIBOR plus the Class M-2 Margin, and (b) the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum.
"Class M-2 Margin" means 1.15%.
"Class M-2 Principal Balance" means, as to any Payment Date, the Original
Class M-2 Principal Balance minus the sum of
(a) all amounts distributed to Holders of Class M-2 Certificates on prior
Payment Dates on account of principal, plus
(b) all Class M-2 Allocated Realized Loss Amounts prior to such Payment
Date.
"Class P Certificate" means the uncertificated Class P Certificate,
evidencing an interest designated as a "regular interest" in the Subsidiary
REMIC for purposes of the REMIC Provisions.
"Class P Certificateholder" shall mean Green Tree Finance Corp.--Two.
"Class P Distribution Amount" means, for any Payment Date, that portion of
the Excess Cashflow eligible for distribution in respect of the Class P
Certificate in accordance with the
18
priorities set forth in Section 8.04(e)(xiii) and all Prepayment Charges
distributed pursuant to Section 8.04(g).
"Class P Principal Balance" means, for any Payment Date, the Original Class
P Principal Balance less all amounts previously distributed to the Class P
Certificateholder pursuant to Section 8.04(e)(xiii).
"Class Percentage Interest" means, as to any Certificate (other than the
Class R Certificates), the percentage interest evidenced thereby in
distributions made on the related Class, such percentage interest being equal to
the percentage (carried to eight places) obtained from dividing the denomination
of such Certificate by the aggregate denomination of all Certificates of the
related Class (which equals the Original Class A-1 Principal Balance in the case
of a Class A-1 Certificate, the Original Class A-2 Principal Balance in the case
of the Class A-2 Certificates, the Original Class A-3 Principal Balance in the
case of the Class A-3 Certificates, the Original Class A-4 Principal Balance in
the case of the Class A-4 Certificates, the Original Class A-5 Principal Balance
in the case of the Class A-5 Certificates, the Original Class A-IO Notional
Amount in the case of the Class A-IO Certificates, the Original Class M-1
Principal Balance in the case of a Class M-1 Certificate, the Original Class M-2
Principal Balance in the case of a Class M-2 Certificate, the Original Class B-1
Principal Balance in the case of a Class B-1 Certificate, the Original Class B-2
Principal Balance in the case of the Class B-2 Certificate, the Original Class
B-3I Notional Amount in the case of a Class B-3I Certificate, and the Original
Class P Principal Balance in the case of a Class P Certificate). The aggregate
Class Percentage Interest for each Class of Certificates shall equal 100%. The
Class R Certificate shall each be issued as a single Certificate having a Class
Percentage Interest of 100%.
"Class Principal Balance" means any of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class M-1, Class M-2, Class B-1, Class B-2 or Class P
Principal Balances, as appropriate.
"Class R Certificate" means a Certificate for Home Equity Loans, Series
2001-C, bearing the designation "Class R," executed and delivered by the
Trustee, substantially in the Form of Exhibit R, and evidencing the aggregate of
the Class R-I, Class R-II and Class R-III Interests designated as "residual
interests" in the Subsidiary REMIC, Intermediate REMIC and Master REMIC,
respectively, for purposes of the REMIC provisions.
"Class R Certificateholder" means the person in whose name a Class R
Certificate is registered as the Certificate Register.
"Class R-I Interest" means the uncertificated interest designated as the
"residual interest" in the Subsidiary REMIC for purposes of the REMIC
Provisions.
"Class R-II Interest" means the uncertificated interest designated as the
"residual interest" in the Intermediate REMIC for purposes of the REMIC
Provisions.
19
"Class R-III Interest" means the uncertificated interest designated as the
"residual interest" in the Master REMIC for purposes of the REMIC Provisions.
"Class R-III Distribution Amount" means, for any Payment Date, that portion
of the Amount Available eligible for distribution in respect of the Class R-III
Interest in accordance with the priorities set forth in Sections 8.04(e)(xiv),
8.04(f) and 12.04(c)(iii).
"Class S-1 Interest," "Class S-2(1) Interest," "Class S-2(2) Interest,"
"Class S-2(3) Interest" and "Class S-2(4) Interest" means, respectively, a
regular interest in the Subsidiary REMIC which is held as an asset of the
Intermediate REMIC, is entitled to monthly distributions as provided in Section
8.07(b), and has the Original Principal Balance and bears interest at the
Pass-Through Rate specified in Section 2.05(d).
"Class S-2 Interest" means any one of the Class S-2(1) Interest, Class
S-2(2) Interest, Class S-3(3) Interest and Class S-2(4) Interests.
"Closing Date" means August 22, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined LTV" means, with respect to any Loan, the percentage obtained by
dividing
(a) the sum of
(i) the current principal balance of such Loan, plus
(ii) the outstanding principal balance, as of the date of origination
of such Loan, of any loan secured by a prior lien on the property
which secures the Loan (the "Collateral"), by
(b) the lesser of
(i) the appraised value of the Collateral based on an appraisal made
for the originator of the Loan by an independent fee appraiser
(or by an employee of the Originator who is a licensed appraiser)
at the time of origination of the Loan, and
(ii) the sales price of the Collateral at the time of origination of
the Loan; provided that, in the case of a Loan the proceeds of
which were used to refinance an existing mortgage loan, the
amount described in clause (ii)(A) shall be the amount to be used
for purposes of clause (ii).
"Computer Tape" means the computer tape generated by the Originator which
provides information relating to the Loans and which was used by the Originator
in selecting the Loans, and includes the master file and the history file.
20
"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 12.09.
"Corresponding Certificate Class" means, with respect to each Class of
Uncertificated Intermediate Interests, as follows:
Uncertificated Intermediate Interest Corresponding Certificate Class
------------------------------------ -------------------------------
Class I-A1 Class A-1
Class I-A2 Class A-2
Class I-A3 Class A-3
Class I-A4 Class A-4
Class I-A5 Class A-5
Class I-AIO Class A-IO
Class I-M1 Class M-1
Class I-M2 Class M-2
Class I-B1 Class B-1
Class I-B2 Class B-2
"Counsel for the Originator" means Xxxxxx & Xxxxxxx LLP, or other legal
counsel for the Originator.
"Counsel for the Seller" means Xxxxxx & Xxxxxxx LLP, or other legal counsel
for the Seller.
"Cumulative Realized Loss Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the Cumulative Realized
Losses for the Loans for that Payment Date and the denominator of which is the
sum of the Cut-off Date Pool Scheduled Principal Balance plus the amount on
deposit in the Pre-Funding Account immediately prior to the Post-Funding Payment
Date.
"Cumulative Realized Losses" means, for any Payment Date, the sum of the
Realized Losses for the Loans for that Payment Date and each preceding Payment
Date since the Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied" for
any Payment Date, that the Cumulative Realized Loss Ratio for the Loans for such
Payment Date is less than or equal to the percentage set forth below for the
specified period:
Month Percentage
37-48 4.75%
49-60 5.75%
61-72 6.25%
73 and thereafter 6.50%
21
"Custodian" means at any time an Eligible Institution, or a financial
institution organized under the laws of the United States or any State, which is
not an Affiliate of the Originator, which is subject to supervision and
examination by Federal or State authorities and whose commercial paper or
unsecured long-term debt (or, in the case of a member of a bank holding company
system, the commercial paper or unsecured long-term debt of such bank holding
company) has been rated A-1+ by S&P, P-1 by Xxxxx'x in the case of commercial
paper, or BBB+ or higher by each of S&P and Xxxxx'x in the case of unsecured
long-term debt, as is acting at such time as Custodian of the Loan Files
pursuant to Section 4.01.
"Cut-off Date" means, with respect to each Initial and Additional Loan,
August 1, 2001(or the date of origination, if later); and with respect to each
Subsequent Loan, the applicable Subsequent Cut-off Date.
"Cut-off Date Pool Principal Balance" means the aggregate of the Cut-off
Date Principal Balances of all Loans.
"Cut-off Date Principal Balance" means,
(a) as to any Initial or Additional Loan, the Scheduled Principal Balance
thereof at the Cut-off Date, and
(b) as to any Subsequent Loan, the Scheduled Principal Balance thereof at
the related Subsequent Cut-off Date.
"Defaulted Loan" means a Loan with respect to which the Servicer commenced
foreclosure proceedings, made a sale of such Loan to a third party for
foreclosure or enforcement, or as to which there was a Delinquent Payment 180 or
more days past due.
"Definitive Certificates" has the meaning assigned in Section 9.02(e).
"Delinquent Payment" means, as to any Loan, with respect to any Due Period,
any payment or portion of a payment that was originally scheduled to be made
during such Due Period under such Loan (after giving effect to any reduction in
the principal amount deemed owed on such Loan by the Obligor) and was not
received or applied during such Due Period and deposited in the Certificate
Account, whether or not any payment extension has been granted by the Servicer;
provided, however, that with respect to any Liquidated Loan, the payment
scheduled to be made in the Due Period in which such Loan became a Liquidated
Loan shall not be deemed a Delinquent Payment.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of
(a) one Class A-1 Certificate evidencing $223,734,000 in Original Class
A-1 Principal Balance,
22
(b) one Class A-2 Certificate evidencing $55,246,000 in Original Class A-2
Principal Balance,
(c) one Class A-3 Certificate evidencing $84,857,000 in Original Class A-3
Principal Balance,
(d) one Class A-4 Certificate evidencing $89,015,000 in Original Class A-4
Principal Balance,
(e) one Class A-5 Certificate evidencing $39,148,000 in Original Class A-5
Principal Balance,
(f) one Class A-IO Certificate evidencing $130,000,000 in Original Class
A-IO Notional Amount,
(g) one Class M-1 Certificate evidencing $45,000,000 in Original Class M-1
Principal Balance,
(h) one Class M-2 Certificate evidencing $33,000,000 in Original Class M-2
Principal Balance,
(i) one Class B-1 Certificate evidencing $19,500,000 in Original Class B-1
Principal Balance, and
(j) two Class B-2 Certificates evidencing an aggregate of $10,500,000 in
Original Class B-2 Principal Balance,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(5) of 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 second Business Day preceding each Payment
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
"Due Period" means, for any Payment Date, a calendar month during the term
of this Agreement.
"Electronic Ledger" means the electronic master record of promissory notes
of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following:
23
(a) an account maintained with an Eligible Institution;
(b) an account or accounts the deposits in which are fully insured by
either the Bank Insurance Fund or the Savings Association Insurance
Fund of the Federal Deposit Insurance Corporation;
(c) 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 of not less than $50,000,000; or
(d) an account that will not cause any of the Rating Agencies to downgrade
or withdraw its then-current rating assigned to the Certificates, as
evidenced in writing by each of the Rating Agencies.
"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 Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or State authorities and whose
short-term deposits have been rated A-1+ by S&P and P-1 by Xxxxx'x or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by S&P and Xxxxx'x.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Originator or any Person
(a) which is qualified to act as Servicer of the Loans under applicable
federal and state laws and regulations, and
(b) which 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 home equity loans.
"Eligible Substitute Loan" means, as to
(a) any Replaced Loan for which an Eligible Substitute Loan is being
substituted pursuant to Section 3.06(b), and
(b) any Prepaid Loan for which an Eligible Substitute Loan is being
substituted pursuant to Section 2.06, a Loan that
(i) as of the date of its substitution, satisfies all of the
representations and warranties (which, except when expressly
stated to be as of origination, shall be deemed to be made as of
the date of its substitution rather than as
24
of the applicable 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 Sections 3.03, 3.04 and 3.05, after giving effect
to such substitution, to be incorrect,
(ii) after giving effect to the scheduled payment due in the month of
such substitution, has a Scheduled Principal Balance that is not
greater than the Scheduled Principal Balance of such Replaced
Loan or, but for such Principal Prepayment in Full, the Scheduled
Principal Balance of such Prepaid Loan, as the case may be,
(iii) has a Loan Interest Rate that is at least equal to the Loan
Interest Rate of such Replaced Loan or Prepaid Loan, as the case
may be,
(iv) has a remaining term to scheduled maturity that is not greater
than the remaining term to scheduled maturity of the Replaced
Loan or Prepaid Loan, as the case may be,
(v) as of the date of its origination, was identified by the
Originator under its standard underwriting criteria as the same
credit grade as the Replaced Loan or Prepaid Loan, as the case
may be,
(vi) the mortgage securing such Loan is in a lien position that is the
same or better than the mortgage securing the Replaced Loan or
Prepaid Loan, as the case may be, and
(vii) the Combined LTV of such Loan is not more than 100 basis points
higher than the Combined LTV of the Replaced Loan or Prepaid
Loan, as the case may be.
"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 Loans comprising a
portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Excess Cashflow" means, for any Payment Date, the sum of the amounts, if
any, distributable pursuant to Sections 8.04(b)(ix) and either Section
8.04(c)(vi) or Section 8.04(d)(vi), whichever is applicable, which amounts shall
be distributed pursuant to Section 8.04(e).
"Exemption" means, individual administration exemptions, granted by the
U.S. Department of Labor to Bear, Xxxxxxx & Co. Inc. (Prohibited Transaction
Exemption 90-30;
25
Exemption Application No. D-8207, 55 Fed. Reg. 21461 (1990)) and to Credit
Suisse First Boston Corporation (Prohibited Transaction Exemption 89-90;
Exemption Application No. D-6555, 54 Fed. Reg. 42597 (1989)), from certain of
the prohibited transaction rules of ERISA and the Code.
"Federal Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
FHA-Insured Loan" means a home equity loan that has been or is being
reported to the Federal Housing Administration, or any successor thereto
("FHA"), as eligible for credit insurance provided by FHA pursuant to Title I of
the National Housing Act.
"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 Loans comprising a portion of the corpus of the Trust.
"Final Payment Date" means the Payment Date on which the final distribution
in respect of the Certificates will be made pursuant to Section 12.04.
"Formula Principal Distribution Amount" means, for any Payment Date, the
sum of:
(a) all scheduled payments of principal due on each outstanding Loan
during the prior Due Period as specified in the amortization schedule
at the time applicable thereto (after adjustments for previous Partial
Principal Prepayments and 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); plus
(b) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with respect
to the Loans; plus
(c) the aggregate Scheduled Principal Balance of all Loans that became
Liquidated Loans during the prior Due Period plus the amount of any
reduction in principal balance of any Loan during the prior Due Period
pursuant to bankruptcy proceedings involving the related Obligor; plus
(d) the aggregate Scheduled Principal Balance of all Loans repurchased,
and all amounts deposited in lieu of the repurchase of any Loan,
during the prior Due Period pursuant to Section 3.06(a) or, in the
event of a substitution of a Loan in accordance with Section 3.06(b),
any amount required to be deposited by the Servicer in the Certificate
Account during the prior Due Period pursuant to Section 3.06(b)(vi);
plus
(e) any amount described in clauses (i) through (iv) above that was not
previously distributed because of an insufficient amount of funds
available in the Certificate Account; plus
26
(f) on the Post-Funding Payment Date, any amount withdrawn from the
Pre-Funding Account and deposited in the Certificate Account.
"GNMA" means the Government National Mortgage Association, or any successor
thereto.
"Initial Loan" means a Loan identified as such on the List of Loans
attached hereto, the aggregate Cut-off Date Principal Balance of which Loans is
[$464,488,703.16].
"Interest Funds" means, for any Payment Date, that portion of the Amount
Available for such Payment Date equal to the sum (net of all amounts
distributable pursuant to Section 8.04(b)(i), Section 8.04(b)(ii) (to the extent
such amounts relate to interest) and Section 8.04(b)(iii) hereof on such Payment
Date), without duplication, of:
(a) all scheduled interest collected or advanced pursuant to Section
8.02 hereof in respect of the Loans during the related Due Period;
(b) all Net Liquidation Proceeds collected in respect of the Loans
during the related Due Period (to the extent such Net Liquidation Proceeds
relate to interest);
(c) the interest portion of the Repurchase Price collected in respect
of any Loans repurchased during the related Due Period; and
(d) investment earnings on the funds in the Collection Account.
"Intermediate Interest Principal Balance" means, with respect to each Class
of Intermediate REMIC Accretion Directed Interests, one-half the Principal
Balance of the Corresponding Certificate Class and with respect to the Class
I-Accrual Interest, one-half the sum of the Pool Scheduled Principal Balance,
the Pre-Funded Amount and the Overcollateralization Amount.
"Intermediate Interest Shortfall" means, with respect to each Class of
Uncertificated Intermediate Interests and any Payment Date, the amount, if any,
by which the amount distributed on such Class on such Payment Date pursuant to
Section 8.07(a)(i) is less than the amount specified in Section 8.07(a)(i).
"Intermediate REMIC" means the segregated pool of assets consisting of the
Uncertificated Subsidiary Interests other than the Class P Certificate, as to
which assets a separate REMIC election is to be made.
"Intermediate REMIC Accretion Directed Interests" means the Uncertificated
Intermediate Interests, other than the Class I-Accrual Interest and the Class
I-AIO Interest.
"LIBOR" means, with respect to any Accrual Period, the offered rate, as
established by the Trustee, for United States dollar deposits for one month that
appears on Telerate Page 3750 as of 11:00 A.M., London time, on the LIBOR Rate
Adjustment Date for such Accrual Period. If
27
on any LIBOR Rate Adjustment Date the offered rate does not appear on Telerate
Page 3750, the Calculation Agent will request each of the reference banks (which
shall be major banks that are engaged in transactions in the London interbank
market selected by the Calculation Agent) to provide the Trustee with its
offered quotation for United States dollar deposits for one month to prime banks
in the London interbank market as of 11:00 A.M., London time, on such date. If
at least two reference banks provide the Calculation Agent with such offered
quotations, LIBOR on such date will be the arithmetic mean, rounded upwards, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths
of a percentage point rounded upward, of all such quotations. If on such date
fewer than two of the reference banks provide the Calculation Agent with such
offered quotations, LIBOR on such date will be the arithmetic mean, rounded
upwards, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five
one-millionths of a percentage point rounded upward, of the offered per annum
rates that one or more leading banks in the City of Minneapolis selected by the
Calculation Agent are quoting as of 11:00 A.M., Minnesota time, on such date to
leading European banks for United States dollar deposits for one month;
provided, however, that if such banks are not quoting as described above, LIBOR
for such date will be LIBOR applicable to the Accrual Period immediately
preceding such Accrual Period; and provided, further, that if the result of the
foregoing would be for three consecutive Payment Dates to base LIBOR on the rate
applicable in the immediately preceding Accrual Period, for such third
consecutive Payment Date the Calculation Agent shall instead select an
alternative comparable index (over which the Calculation Agent has no control)
used for determining one-month Eurodollar lending rates that is calculated and
published (or otherwise made available) by an independent third party.
"LIBOR Business Day" as used herein means a day that is both a Business Day
and a day on which banking institutions in the City of London, England are not
required or authorized by law to be closed.
"LIBOR Cap Counterparty" means Bear Xxxxxxx Financial Products, Inc.
"LIBOR Rate Adjustment Date" means the second LIBOR Business Day prior to
the first day of the related Accrual Period.
"Liquidated Loan" means, with respect to any Due Period, either
(a) a Defaulted Loan as to which the Servicer has received from the
Obligor, or a third party purchaser of the Loan, all amounts which the
Servicer reasonably and in good faith expects to recover from or on
account of such Loan, or
(b) a Loan
(i) upon which all or a portion of the first payment of interest due
by the Obligor was added to principal, and
(ii) on which the Obligor failed to pay the full amount of principal
due on the Loan, as computed by the Servicer;
28
provided, however, that any Loan which the Originator is obligated to repurchase
pursuant to Section 3.06, and did so repurchase or substitute therefor an
Eligible Substitute Loan in accordance with Section 3.06, shall be deemed not to
be a Liquidated Loan; and provided, further, that with respect to Due Periods
beginning on or after August 15, 2032, a Liquidated Loan also means any Loan as
to which the Servicer has commenced foreclosure proceedings, or made a sale of
the Loan to a third party for foreclosure or enforcement.
"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 Loan, 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 Loans, whether through
repossession, foreclosure sale or otherwise.
"List of Loans" means the lists identifying each Loan constituting part of
the Trust Fund and attached either to this Agreement as Exhibit L or to a
Subsequent Transfer Instrument, as such lists may be amended from time to time
pursuant to Section 2.06 or Section 3.06(b) to add Eligible Substitute Loans and
delete Replaced Loans or Prepaid Loans, as the case may be. Each List of Loans
shall set forth as to each Loan identified on it
(a) the Cut-off Date Principal Balance,
(b) the amount of monthly payments due from the Obligor,
(c) the Loan Interest Rate, and
(d) the maturity date.
"Loan" means each closed-end home equity loan identified as such in the
List of Loans, which Loan is to be assigned and conveyed by the Company to the
Trust, and includes, without limitation, all related mortgages, deeds of trust
and security deeds and any and all rights to receive payments due pursuant
thereto after the applicable Cut-off Date.
"Loan File" means, as to each Loan,
(a) the original promissory note duly endorsed in blank or in the name of
the Trustee for the benefit of the Certificateholders,
(b) the original or a copy of the mortgage, deed of trust or security deed
or similar evidence of a lien on the related improved property and
evidence of due recording of such mortgage, deed of trust or security
deed, if available,
29
(c) if such Loan was originated by a lender other than the Originator, the
original or a copy of an assignment of the mortgage, deed of trust or
security deed by such lender to the Originator,
(d) an assignment of the mortgage, deed of trust or security deed in
recordable form to the Trustee or in blank, and
(e) any extension, modification or waiver agreements.
"Loan Interest Rate" means, as to any Loan, the annual rate of interest
specified in the Loan.
"Master REMIC" means the segregated pool of assets consisting of the
Uncertificated Intermediate Interests, as to which a separate REMIC election is
to be made.
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, for any Payment Date, with respect to the
Loans, one-twelfth of the product of 0.50% and the Pool Scheduled Principal
Balance for the preceding Payment Date (or, in the case of the first Payment
Date, the Cut-off Date Pool Principal Balance).
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor thereto;
provided that, if Moody's no longer has a rating outstanding on any Class of
Certificates, then references herein to "Xxxxx'x" shall be deemed to refer to
the NRSRO then rating any Class of the Certificates (or, if more than one such
NRSRO is then rating any Class of the Certificates, to such NRSRO as may be
designated by the Servicer), and references herein to ratings by or requirements
of Xxxxx'x shall be deemed to have the equivalent meanings with respect to
ratings by or requirements of such NRSRO.
"Net Liquidation Loss" means, as to a Liquidated Loan, the difference
between
(a) the Repurchase Price of such Loan, and
(b) the Net Liquidation Proceeds with respect to such Liquidated Loan,
where such difference is a positive number.
"Net Liquidation Proceeds" means, as to a Liquidated Loan, the proceeds
received, or, for Loans which become Liquidated Loans pursuant to the last
proviso in the definition of "Liquidated Loan," the estimated proceeds to be
received, as of the last day of the Due Period in which such Loan became a
Liquidated Loan, from the Obligor, from a third party purchaser of the Loan,
under insurance, or otherwise, net of Liquidation Expenses.
"Net WAC Cap Rate" means with respect to any Payment Date, the Weighted
Average Loan Rate, minus the per annum rates at which the Trustee Fee, the
Servicing Fee and (with respect to each Payment Date occurring prior to March 1,
2004) the Cap Provider Fee are paid.
30
"NRSRO" means any nationally recognized statistical rating organization.
"Obligor" means the person who owes payments under a Loan.
"OC Floor" means 0.50% of the sum of
(i) the Cut-off Date Pool Principal Balance plus
(ii) amounts deposited in the Pre-Funding Account, if any.
"OC Stepup Trigger" shall exist for each Payment Date if the Cumulative
Realized Loss Ratio for the Loans for such Payment Date is greater than the
percentage set forth below for the specified period:
Month Percentage
37-48 5.50%
49-60 6.50%
61-72 7.00%
73 and thereafter 7.25%
"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, the Seller or
the Servicer, as applicable, acceptable to the Trustee, the Originator and the
Seller.
"Original Aggregate Certificate Principal Balance" means $600,000,000.
"Original Class Notional Amount" means as to each of the Class A-IO and
Class B-3I Certificates, the amount set forth with respect to such Class in
Section 2.05(b).
"Original Class Principal Balance" means as to each Class of Certificates
(other than the Class A-IO and Class B-3I Certificates), the amount set forth
with respect to such Class in Section 2.05(b).
"Original Pre-Funded Amount" means the amount deposited in the Pre-Funding
Account pursuant to Section 2.02(l).
"Original Principal Balance" means as to each Class of Uncertificated
Intermediate Interests and Uncertificated Subsidiary Interests, the respective
amount set forth with respect to such Class in Sections 2.05(c) and 2.05(d).
"Overcollateralization Amount" means, for any Payment Date, the amount, if
any, by which the Pool Scheduled Principal Balance as of the last day of the
related Due Period exceeds
31
the Aggregate Certificate Principal Balance as of such Payment Date (after
giving effect to distributions in respect of principal on the Certificates on
such Payment Date).
"Overcollateralization Increase Amount" means with respect to (a) Payment
Dates in September 2001 and October 2001, $0, and (b) any Payment Date
thereafter, an amount equal to the lesser of:
(a) the Excess Cashflow for such Payment Date, and
(b) the excess, if any, of (x) the Required Overcollateralization Amount
for such Payment Date over (y) the Overcollateralization Amount for
such Payment 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
proviso in Section 3.06(a) or pursuant to Section 3.06(b).
"Pass-Through Rate" means, with respect to each Class of Certificates, the
rate set forth for such Class in Section 2.05(b), with respect to each Class of
Uncertificated Intermediate Interests, the rate set forth in Section 2.05(c),
and with respect to each Class of Uncertificated Subsidiary Interests, the rate
set forth in Section 2.05(d).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Payment Date" means the fifteenth day of each calendar month during the
term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing in September 2001.
"Percentage Interest" means, as to any Certificate or the Class R
Certificate, the percentage interest evidenced thereby in distributions made on
the related Class, such percentage interest being equal to:
(a) as to any Certificate, the percentage (carried to eight places)
obtained from dividing the denomination of such Certificate by the
Original Principal Balance of the related Class, and
(b) as to the Class B-3I and Class R Certificates, the percentage
specified on the face of such Certificate. The aggregate Percentage
Interests for each Class of Certificates and the Class R Certificate
shall equal 100%, respectively.
"Permitted Transferee" means, in the case of a transfer of the Class R
Certificate, a Person that is not a Plan or a Disqualified Organization, except
as permitted by Sections 9.02(b)(2) and (3), respectively.
32
"Person" means any individual, corporation, partnership, limited liability
company, 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 Certificate Principal Balance at such
time and the denominator of which is the Original Aggregate Certificate
Principal Balance.
"Pool Scheduled Principal Balance" means, for any Payment Date, the
aggregate Scheduled Principal Balance for such Payment Date of all Loans that
were outstanding during the immediately preceding Due Period.
"Post-Funding Payment Date" means the Payment Date on, or the first Payment
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 Loans to the Trust on such date.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.08.
"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 $10,000.00, or
(b) the close of business on November 14, 2001, or
(c) the date on which an Event of Termination occurs.
"Prepaid Loan" has the meaning assigned in Section 2.06.
"Prepayment Charges" means all prepayment premiums, penalties and similar
charges paid by any Obligor in connection with, and as a condition to,
prepayment in part or in full of a Loan.
"Principal Funds" means, for any Payment Date, that portion of the Amount
Available for such Payment Date equal to the sum (net of all amounts distributed
pursuant to Section 8.04(b)(ii) hereof (to the extent such amounts relate to
principal) on such Payment Date), without duplication, of:
(a) the scheduled principal collected or advanced pursuant to Section
8.02 hereof in respect of the Loans during the related Due Period;
33
(b) prepayments collected in respect of the Loans during the related
Due Period;
(c) the principal portion of the Repurchase Price collected in respect
of any Loan repurchased during the related Due Period; and
(d) all Net Liquidation Proceeds in respect of the Loans collected
during the related Due Period (to the extent such Net Liquidation Proceeds
relate to principal).
"Principal Prepayment" means a payment or other recovery of principal on a
Loan (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
prepayment, upon the next scheduled payment date on such Loan) to reduce the
outstanding principal amount due on such Loan 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 Loan.
"Qualified Plan Investor" shall mean a plan investor or group of plan
investors on whose behalf the decision to purchase the Certificates, as the case
may be, is made by an independent fiduciary that is
(a) qualified to analyze and understand the terms and conditions of the
Yield Maintenance Agreements and the effect of the Yield Maintenance
Agreements on the credit ratings of the Certificates, and
(b) a "qualified professional asset manager," as defined in Part V(a) of
PTE 84-14, an "in-house asset manager" as defined in Part IV(a) of PTE
96-23, or a plan fiduciary with a total plan and non-plan assets under
management of at least $100,000,000 at the time of the acquisition of
the Certificates.
"Rating Agencies" means S&P and Xxxxx'x.
"Realized Loss Amount" means, as to any Payment Date, the excess, if any,
of the Aggregate Certificate Principal Balance, after giving effect to
distributions in respect of principal on the Certificates on such Payment Date,
but prior to any reduction in Class Principal Balances as a result of any
Realized Loss Amount for such Payment Date, over the aggregate of the Pool
Scheduled Principal Balance as of the last day of the preceding Due Period.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date.
"Regular Certificates" means a Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-IO, Class M-1, Class M-2, Class B-1, Class B-2, Class B-3I or
Class P Certificate.
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
34
"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.
"Replaced Loan" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Loan to be repurchased pursuant
to Section 3.06 or which becomes a Liquidated Loan, an amount equal to
(a) the remaining principal amount outstanding on such Loan (without
giving effect to any Advances paid by the Servicer or the Trustee, as
applicable, with respect to such Loan pursuant to Section 8.02), plus
(b) interest at the weighted average pass-through rate on such Loan from
the end of the Due Period with respect to which the Obligor last made
a scheduled payment (without giving effect to any Advances paid by the
Servicer or the Trustee, as applicable, with respect to such Loan
pursuant to Section 8.02) through the date of such repurchase or
liquidation.
"Required Overcollateralization Amount" means, for any Payment Date
(a) for which an OC Stepup Trigger is not in effect
(i) prior to the Stepdown Date, an amount equal to 1.25% of the
Cut-off Date Principal Balance plus amount deposited in the
Pre-Funding Account, if any, on the Closing Date; or
(ii) on or after the Stepdown Date, an amount equal to 2.50% of the
Pool Scheduled Principal Balance as of the last day of the
related Due Period, but in no event (x) less than the OC Floor in
each case, or (y) greater than the aggregate Scheduled Principal
Balance as of the last day of the related Due Period;
(b) for which an OC Stepup Trigger is in effect
(i) prior to the Stepdown Date, an amount equal to 1.75% of the
Cut-off Date Pool Scheduled Principal Balance plus amount
deposited in the Pre-Funding Account, if any, on the Closing
Date; or
(ii) on or after the Stepdown Date, an amount equal to 3.50% of the
Pool Scheduled Principal Balance as of the last day of the
related Due Period, but in no event (x) less than the OC Floor in
each case, or (y) greater than the Pool Scheduled Principal
Balance as of the last day of the related Due Period.
35
"Reserve Fund Addition" means the amount, if any, received from the LIBOR
Cap Counterparty pursuant to the applicable Yield Maintenance Agreement.
"Residual Interests" means the Class R-I, Class R-II and Class R-III
Interests, each one evidencing the sole class of "residual interests" in the
Subsidiary REMIC, Intermediate REMIC and Master REMIC, respectively, and
represented in the aggregate by the Class R Certificate.
"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.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto; provided that, if S&P no
longer has a rating outstanding on any Class of the Certificates, then
references herein to "S&P" 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 S&P shall be deemed to
have the equivalent meanings with respect to ratings by or requirements of such
NRSRO.
"Scheduled Principal Balance" means, with respect to any Loan and any
Payment Date, the Cut-off Date or any Subsequent Cut-off Date, the principal
balance of such Loan as of the due date in the Due Period immediately preceding
such Payment Date, Cut-off Date or Subsequent Cut-off Date, as the case may be,
as specified in the amortization schedule at the time relating thereto (before
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. If for
any Loan the Cut-off Date is the date of origination of the Loan, its Scheduled
Principal Balance as of the Cut-off Date is the principal balance of the Loan on
its date of origination.
"Senior Enhancement Percentage" means, for any Payment Date, a fraction,
expressed as a percentage, obtained by dividing:
(a) the excess of
(i) the Pool Scheduled Principal Balance as of the first day of the
related Due Period over
(ii) the Class A Principal Balance immediately prior to such Payment
Date, by
36
(b) the Pool Scheduled Principal Balance as of the first day of the
related Due Period.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicer" means the Originator until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Loans whose name appears on
a list of servicing officers appearing in an Officer's Certificate furnished to
the Trustee by the Servicer, as the same may be amended from time to time.
"Sixty-Day Delinquency Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Loans that were delinquent 60 days or more as of the
end of the prior Due Period (including such Loans in respect of which the
related real estate has been foreclosed upon but is still in inventory), and the
denominator of which is the Pool Scheduled Principal Balance of the Loans for
such Payment Date.
"Stepdown Date" means the later of
(a) the Payment Date in September 2004, and
(b) the first Payment Date on which the Class A Principal Balance is less
than or equal to 61.50% of the Pool Scheduled Principal Balance or, if
an OC Stepup Trigger is in effect, 60.50% of the Pool Scheduled
Principal Balance.
"Subsequent Cut-off Date" means, with respect to a Subsequent Loan, the
last day of the month in which the Subsequent Transfer Date occurs.
"Subsequent Loan" means a Loan sold by the Seller to the Trust pursuant to
Section 2.03, such Loan being identified as such in the Subsequent Transfer
Instrument.
"Subsequent Transfer Date" means, with respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Loans are sold to the
Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer Instrument
dated as of a Subsequent Transfer Date executed by the Seller substantially in
the form of Exhibit O, by which the Seller sells Subsequent Loans to the Trust.
"Subsidiary Interest Adjusted Principal Balance" means, as to any Payment
Date and each Class of Uncertificated Subsidiary Interests, the Subsidiary
Interest Principal Balance of such Class less its allocable share of the amount,
if any, by which the aggregate Subsidiary Interest Principal Balance of the
Class S-1 and Class S-2 Interests exceeds the Pool Scheduled Principal Balance
plus the Pre-Funded Amount, such excess to be allocated sequentially, i.e.,
first to the Class S-1 Interest up to its Subsidiary Interest Principal Balance,
then to the Class
37
S-2(1) Interest any remaining excess, up to its Subsidiary Interest Principal
Balance, and last to the Class S-2(4) Interest.
"Subsidiary Interest Principal Balance" means, as to any Payment Date and
each Class of Uncertificated Subsidiary Interests, the Original Principal
Balance of such Class less all amounts previously distributed under Section
8.07(b) in respect of such Class on account of principal.
"Subsidiary Interest Shortfall" means, with respect to each Class of
Uncertificated Subsidiary Interests and any Payment Date, the amount, if any, by
which the amount distributed on such Class on such Payment Date pursuant to
Section 8.07(b)(i) is less than the amount specified in Section 8.07(b)(i).
"Subsidiary REMIC" means the segregated pool of assets described as
follows, which a separate REMIC election is to be made:
(a) all the rights, benefits, and obligations arising from and in
connection with each Loan, including rights to receive payments due on
the Loans after the Cut-Off Date and any liens on the related real
estate,
(b) all remittances, deposits and payments made into the Certificate
Account and amounts in the Certificate Account (other than payments on
the Uncertificated Subsidiary Interests),
(c) all proceeds in any way derived from any of the foregoing items, and
(d) all documents contained in the Loan Files.
"Transfer Agreement" means that Transfer Agreement between Conseco Finance
Securitizations Corp., as purchaser, and Conseco Finance Corp., as seller, dated
as of August 1, 2001.
"Trigger Event" exists for any Payment Date if
(a) Average Sixty-Day Delinquency Ratio Test for the Loans is not
satisfied or
(b) the Cumulative Realized Losses Test for the Loans is not satisfied.
"Trust" means Conseco Finance Home Equity Loan Trust 2001-C.
"Trust Fund" means the corpus of the Trust created by this Agreement which
consists of
(a) all the rights, benefits and obligations arising from and in
connection with the Loans, including without limitation all related
mortgages, deeds of trust and security deeds and any and all rights to
receive payments on or with respect to the Loans due after the
applicable Cut-off Date,
38
(b) all rights under any hazard, flood or other individual insurance
policy on the real estate securing a Loan for the benefit of the
creditor of such Loan,
(c) all rights of the Seller under the Transfer Agreement,
(d) all rights the Originator may have against the originating lender with
respect to Loans originated by a lender other than the Originator,
(e) all rights under the Errors and Omissions Protection Policy and the
Fidelity Bond as such policy and bond relate to the Loans,
(f) all rights under any title insurance policies, if applicable, on any
of the properties securing Loans,
(g) all documents contained in the Loan Files,
(h) all rights under the Yield Maintenance Agreements,
(i) amounts in the Certificate Account, the Pre-Funding Account, the Basis
Risk Reserve Fund, and the Yield Maintenance Reserve Fund (including
all proceeds of investments of funds in the Certificate Account), and
(j) all proceeds and products of the foregoing.
"Trustee Advance" has the meaning assigned in Section 11.15.
"Uncertificated Intermediate Interests" means the Class I-A1, Class I-A2,
Class I-A3, Class I-A4, Class I-A5, Class I-AIO(1), Class I-AIO(2), Class
I-AIO(3), Class I-AIO(4), Class I-AIO(5), Class I-AIO(6), Class I-AIO(7), Class
I-AIO(8), Class I-M1, Class I-M2, Class I-B1, Class I-B2 and Class I-Accrual
Interests, collectively.
"Uncertificated Subsidiary Interests" means the Class S-1 and Class S-2
Interests and Class P Certificate, collectively.
"Underwriters" means Bear, Xxxxxxx & Co., Inc., Credit Suisse First Boston
Corporation, Banc One Capital Markets, Inc., Deutsche Banc Xxxx. Xxxxx, Xxxxxx
Brothers Inc., and Xxxxxxx Xxxxx & Co.
"Underwriting Agreement" means the Underwriting Agreement and related Terms
Agreement, each dated August 2, 2001, among the Originator, the Seller and the
Underwriters.
"Unpaid Class A Basis Risk Carryover Shortfall" means, as to any Payment
Date, the sum of the Unpaid Class A-1, Class A-2, Class A-3, Class A-4 and Class
A-5 Basis Risk Carryover Shortfalls.
"Unpaid Class A Interest Carry Forward Amount" means, as to any Payment
Date, the excess of
39
(a) the aggregate amount of all Class A Interest Carry Forward Amounts,
over
(b) the sum of all payments in reduction of Unpaid Class A Interest Carry
Forward Amount on all previous Payment Dates pursuant to Section
8.04(e)(ii),
plus interest (to the extent payment thereof is legally permissible) at the
Class A Interest Rate for such Payment Date on the Unpaid Class A Interest Carry
Forward Amount for the immediately preceding Payment Date (after giving effect
to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(ii)), accrued during the related Accrual Period.
"Unpaid Class A-1 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class A-1 Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class A-1 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Sections 8.09 and 8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class A-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class A-1 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Sections 8.09
and 8.10), accrued during the related Accrual Period.
"Unpaid Class A-2 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class A-2 Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class A-2 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to Section
8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class A-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class A-2 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Section
8.10), accrued during the related Accrual Period.
"Unpaid Class A-3 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class A-3 Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class A-3 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to Section
8.10;
40
plus interest (to the extent payment thereof is legally permissible) at the
Class A-3 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class A-3 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Section
8.10), accrued during the related Accrual Period.
"Unpaid Class A-4 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class A-4 Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class A-4 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to Section
8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class A-4 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class A-4 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Section
8.10), accrued during the related Accrual Period.
"Unpaid Class A-5 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class A-5 Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class A-5 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to Section
8.10;
plus interest (to the extent payment thereof is legally permissible) at the
Class A-5 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class A-5 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Section
8.10), accrued during the related Accrual Period.
"Unpaid Class A-IO Interest Carry Forward Amount" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class A-IO Interest Carry Forward Amounts,
over
(b) the sum of all payments in reduction of Unpaid Class A-IO Interest
Carry Forward Amount on all previous Payment Dates pursuant to Section
8.04(e)(ii),
plus interest (to the extent payment thereof is legally permissible) at the
Class A-IO Interest Rate for such Payment Date on the Unpaid Class A-IO Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction
41
thereof on such Payment Date pursuant to Section 8.04(e)(ii)), accrued during
the related Accrual Period.
"Unpaid Class B-1 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class B Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class B Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Sections 8.09 and 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class B Interest Rate for such Payment Date (calculated without giving effect to
the Adjusted Net WAC Cap Rate) on the Unpaid Class B Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Sections 8.09
and 8.10), accrued during the related Accrual Period.
"Unpaid Class B-1 Interest Carry Forward Amount" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class B-1 Interest Carry Forward Amounts,
over
(b) the sum of all payments in reduction of Unpaid Class B-1 Interest
Carry Forward Amount on all previous Payment Dates pursuant to Section
8.04(e)(vii),
plus interest (to the extent payment thereof is legally permissible) at the
Class B-1 Interest Rate for such Payment Date on the Unpaid Class B-1 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(vii)), accrued during the related Accrual Period.
"Unpaid Class B-1 Realized Loss Amount" means, with respect to any Payment
Date,
(a) the sum of all Class B-1 Allocated Realized Loss Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid Class B-1
Realized Loss Amount on all previous Payment Dates pursuant to Section
8.04(e)(viii)(B).
"Unpaid Class B-1 Realized Loss Interest Amount" means, with respect to any
Payment Date,
(a) the sum of all Class B-1 Allocated Realized Loss Interest Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid Class B-1
Realized Loss Interest Amount on all previous Payment Dates pursuant
to Section 8.04(e)(viii)(A).
42
"Unpaid Class B-2 Basis Risk Carryover Shortfall" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class B-2 Basis Risk Carryover Shortfalls,
over
(b) the sum of all payments in reduction of Unpaid Class B-2 Basis Risk
Carryover Shortfalls on all previous Payment Dates pursuant to
Sections 8.09 and 8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class B-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class B-2 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Sections 8.09
and 8.10), accrued during the related Accrual Period.
"Unpaid Class B-2 Interest Carry Forward Amount" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class B-2 Interest Carry Forward Amounts,
over
(b) the sum of all payments in reduction of Unpaid Class B-2 Interest
Carry Forward Amount on all previous Payment Dates pursuant to Section
8.04(e)(ix),
plus interest (to the extent payment thereof is legally permissible) at the
Class B-2 Interest Rate for such Payment Date on the Unpaid Class B-2 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(ix)), accrued during the related Accrual Period.
"Unpaid Class B-2 Realized Loss Amount" means, with respect to any Payment
Date,
(a) the sum of all Class B-2 Allocated Realized Loss Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid Class B-2
Realized Loss Amount on all previous Payment Dates pursuant to Section
8.04(e)(x)(B).
"Unpaid Class B-2 Realized Loss Interest Amount" means, with respect to any
Payment Date,
(a) the sum of all Class B-2 Allocated Realized Loss Interest Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid Class B-2
Realized Loss Interest Amount on all previous Payment Dates pursuant
to Section 8.04(e)(x)(A).
"Unpaid Class M-1 Basis Risk Carryover Shortfall" means, with respect to
the Class M-1 Certificates and as to any Payment Date, the excess of
43
(a) the aggregate amount of all Class M-1 Basis Risk Carryover Shortfalls
over
(b) the sum of all payments in reduction of Class M-1 Basis Risk Carryover
Shortfalls on all previous Payment Dates pursuant to Sections 8.09 and
8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class M-1 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class M-1 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment made in reduction thereof on such Payment Date pursuant to Sections 8.09
and 8.10), accrued during the related Accrual Period.
"Unpaid Class M-1 Interest Carry Forward Amount" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class M-1 Interest Carry Forward Amounts,
over
(b) the sum of all payments in reduction of Unpaid Class M-1 Interest
Carry Forward Amount on all previous Payment Dates pursuant to Section
8.04(e)(iii),
plus interest (to the extent payment thereof is legally permissible) at the
Class M-1 Interest Rate for such Payment Date on the Unpaid Class M-1 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment made in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(iii)), accrued during the related Accrual Period.
"Unpaid Class M-1 Realized Loss Amount" means, with respect to any Payment
Date,
(a) the sum of all Class M-1 Allocated Realized Loss Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid Class M-1
Realized Loss Amount on all previous Payment Dates pursuant to Section
8.04(e)(iv)(B).
"Unpaid Class M-1 Realized Loss Interest Amount" means, with respect to any
Payment Date,
(a) the sum of all Class M-1 Allocated Realized Loss Interest Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid Class M-1
Realized Loss Interest Amount on all previous Payment Dates pursuant
to Section 8.04(e)(iv)(A).
"Unpaid Class M-2 Basis Risk Carryover Shortfall" means, with respect to
the Class M-2 Certificates and as to any Payment Date, the excess of
(a) the aggregate amount of all Class M-2 Basis Risk Carryover Shortfalls,
over
44
(b) the sum of all payments in reduction of Class M-2 Basis Risk Carryover
Shortfalls on all previous Payment Dates pursuant to Sections 8.09 and
8.10,
plus interest (to the extent payment thereof is legally permissible) at the
Class M-2 Interest Rate for such Payment Date (calculated without giving effect
to the Adjusted Net WAC Cap Rate) on the Unpaid Class M-2 Basis Risk Carryover
Shortfall for the immediately preceding Payment Date (after giving effect to any
payment in reduction thereof on such Payment Date pursuant to Sections 8.09 and
8.10), accrued during the related Accrual Period.
"Unpaid Class M-2 Interest Carry Forward Amount" means, as to any Payment
Date, the excess of
(a) the aggregate amount of all Class M-2 Interest Carry Forward Amounts,
over
(b) the sum of all payments in reduction of Unpaid Class M-2 Interest
Carry Forward Amount on all previous Payment Dates pursuant to Section
8.04(e)(v),
plus interest (to the extent payment thereof is legally permissible) at the
Class M-2 Interest Rate for such Payment Date on the Unpaid Class M-2 Interest
Carry Forward Amount for the immediately preceding Payment Date (after giving
effect to any payment in reduction thereof on such Payment Date pursuant to
Section 8.04(e)(v)), accrued during the related Accrual Period.
"Unpaid Class M-2 Realized Loss Amount" means, with respect to any Payment
Date,
(a) the sum of all Class M-2 Allocated Realized Loss Amounts, minus
(b) the sum of all amounts distributed in respect of the Unpaid Class M-2
Realized Loss Amount on all previous Payment Dates pursuant to Section
8.04(e)(vi)(B).
"Unpaid Class M-2 Realized Loss Interest Amount" means, with respect to any
Payment Date,
(a) the sum of all Class M-2 Allocated Realized Loss Interest Amounts,
minus
(b) the sum of all amounts distributed in respect of the Unpaid Class M-2
Realized Loss Interest Amount on all previous Payment Dates pursuant
to Section 8.04(e)(vi)(A).
"Weighted Average Debt Consolidation Percentage" means the weighted
average, by Scheduled Principal Balance, of Loans the proceeds of which were
used by the related Obligors for the purpose of debt consolidation.
"Weighted Average Loan Rate" means, for any Payment Date, the weighted
average (determined by Scheduled Principal Balance) of the Loan Interest Rates
for all Loans that were outstanding during the immediately preceding month.
45
"Weighted Average Pass-Through Rate" means, for any Payment Date, with
respect to any Payment Date, the sum of (i) the weighted average (expressed as a
percentage and rounded to four decimal places) of the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-IO, Class M-1, Class M-2, Class B-1 and
Class B-2 Pass-Through Rates, weighted on the basis of the respective Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-IO, Class M-1, Class M-2,
Class B-1 and Class B-2 Principal Balances or Notional Amount, as applicable,
for such Payment Date.
"Yield Maintenance Agreements" means the five Yield Maintenance Agreements,
each dated as of August 22, 2001, between the Trust and the LIBOR Cap
Counterparty.
Section 1.03. Calculations. Except as otherwise provided in this Agreement,
(a) interest payable on the Class A-1, Class M and Class B Certificates
for each Accrual Period shall be calculated on the basis of actual
days in a 360-day year, and
(b) interest payable on the Class A-2, Class A-3, Class A-4, Class A-5 and
Class A-IO Certificates for each Accrual Period shall be calculated on
the basis of a 360-day year comprised of twelve 30-day months.
Article II
ESTABLISHMENT OF TRUST; TRANSFER OF LOANS
Section 2.01. Closing.
(a) There is hereby created, by the Seller as settlor, a separate
trust which shall be known as Conseco Finance Home Equity Loan Trust
2001-C. The Trust shall be administered pursuant to the provisions of this
Agreement for the benefit of the Certificateholders and the Class R
Certificateholder.
(b) The Seller hereby transfers, assigns, sets over and otherwise
conveys to the Trustee on behalf of the Trust, by execution and delivery of
an assignment substantially in the form of Exhibit D hereto, all the right,
title and interest of the Seller in and to the Initial Loans and Additional
Loans, including all rights to receive payments on or with respect to the
Initial Loans and Additional Loans due after the applicable Cut-off Date,
all rights of the Seller under the Transfer Agreement and all other assets
now or hereafter included in the Trust Fund. Each such transfer and
assignment is intended by the Seller to be a sale of such assets for all
purposes, including, without limitation, the Federal Bankruptcy Code, to
the end that all such assets will hereafter cease to be the property of the
Seller and would not be includable in the estate of the Seller or the
Originator for purposes of Section 541 of the Federal Bankruptcy Code.
(c) Although the parties intend that each conveyance pursuant to this
Agreement of the Seller's right, title and interest in and to the Loans
(including the Subsequent Loans) shall constitute a purchase and sale and
not a loan, if such conveyances are deemed to be loans, the
46
parties intend that the rights and obligations of the parties to such loans
shall be established pursuant to the terms of this Agreement. If the
conveyances are deemed to be loans, the parties further intend and agree
that the Originator and the Seller shall be deemed to have granted to the
Trustee and the Originator and the Seller do hereby grant to the Trustee, a
perfected first-priority security interest in the Trust Fund 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 Certificate or Class R Certificate, 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 Loans attached to this Agreement as Exhibit L,
certified by the Chairman of the Board, President or any Vice President of
the Seller.
(b) A certificate of an officer of the Originator substantially in the
form of Exhibit E hereto on behalf of the Seller and the Originator.
(c) An Opinion of Counsel for the Seller substantially in the form of
Exhibit F hereto.
(d) A letter, acceptable to the Underwriters, from
PricewaterhouseCoopers LLP or another nationally recognized accounting
firm, stating that such firm has reviewed the Initial Loans and Additional
Loans on a statistical sampling basis and setting forth the results of such
review.
(e) 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 and the
transactions contemplated hereunder, certified in each case by the
secretary or an assistant secretary of the Seller.
(f) Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota.
(g) An Officer's Certificate listing the Servicer's Servicing
Officers.
(h) Evidence of continued coverage of the Servicer under the Errors
and Omissions Protection Policy.
(i) Evidence of deposit in the Certificate Account of all funds
received with respect to the Loans from the Cut-off Date to the Closing
Date, other than principal due on or before the Cut-off Date, together with
an Officer's Certificate to the effect that such amount is correct.
(j) The Loan Files for the Initial Loans and Additional Loans and an
Officer's Certificate confirming that the Originator has reviewed the
original or a copy of each related promissory note and each related Loan
File, that each such Loan and Loan File conforms in all
47
material respects with the List of Loans and that each such Loan File is
complete in accordance with the definition thereof and has been delivered
to the Trustee (or its custodian).
(k) Assignments in recordable form to the Trustee or in blank of the
mortgages, deeds of trust and security deeds relating to the Initial Loans.
(l) Evidence of the deposit of $1,046.75 in the Pre-Funding Account.
(m) Letters from each of the Rating Agencies evidencing the following
ratings for the Certificates:
Class S&P Rating Xxxxx'x Rating
----------- -------------------- ---------------------
A-1 AAA Aaa
A-2 AAA Aaa
A-3 AAA Aaa
A-4 AAA Aaa
A-5 AAA Aaa
A-IO AAA Aaa
M-1 AA+ Aa3
M-2 A A3
B-1 BBB Baa1
B-2 BB+ Ba1
Section 2.03. Conveyance of the Subsequent Loans.
(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 Loans identified
on the List of Loans attached to the Subsequent Transfer Instrument,
including all rights to receive payments on or with respect to the
Subsequent Loans due after the related Subsequent Cut-off Date, and all
items with respect to such Subsequent Loans in the related Loan Files. The
transfer to the Trustee by the Seller of the Subsequent Loans shall be
absolute and is intended by the Seller, the Trustee, the Certificateholders
and the Class R Certificateholder to constitute and to be treated as a sale
of the Subsequent Loans by the Seller or the Originator to the Trust. Such
transfer and assignment is intended by the Seller to be a sale of such
assets for all purposes, including, without limitation, the Federal
Bankruptcy Code, to the end that all such assets will hereafter cease to be
the property of the Seller and would not be includable in the estate of the
Seller for purposes of Section 541 of the Federal Bankruptcy Code.
The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Loans. The purchase price of
48
Subsequent Loans 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 to the Trustee the Subsequent Loans, 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 Loans;
(ii) the Seller shall have delivered the related Loan File for each
Subsequent Loan to the Trustee at least two Business Days prior
to the Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Trustee a duly executed
Subsequent Transfer Instrument substantially in the form of
Exhibit O, which shall include a List of Loans identifying the
related Subsequent Loans;
(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,
Intermediate REMIC or Subsidiary REMIC) or the Certificateholders
or Class R Certificateholder;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an Officer's
Certificate, substantially in the form attached hereto as Exhibit
P, confirming the satisfaction of each condition precedent and
the representations specified in this Section 2.03 and in
Sections 3.01, 3.02, 3.03, 3.04 and 3.05;
(viii) the Seller and the Originator shall have delivered to the
Trustee Opinions of Counsel addressed to S&P, Xxxxx'x and the
Trustee with respect to the transfer of the Subsequent Loans
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) no Subsequent Loan will have a Combined LTV greater than 100%;
and
49
(x) the Seller shall have delivered assignments in recordable form to
the Trustee of the mortgages, deeds of trust and security deeds
relating to the Subsequent Loans.
(c) On or 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 S&P, Xxxxx'x, the Underwriters and the Trustee) that
is in form, substance and methodology the same as that dated
August 22, 2001 and delivered under Section 2.02(d) of this
Agreement, except that it shall address the Subsequent Loans and
their conformity in all material respects to the characteristics
described in Sections 2.03 (b)(ix) and 3.04(b) of this Agreement.
(ii) Evidence that, as a result of the purchase by the Trust of the
Subsequent Loans, none of the ratings assigned to the Class A
Certificates as of the Closing Date by S&P or Xxxxx'x will be
reduced, withdrawn or qualified.
(iii) Evidence that the aggregate Cut-off Date Principal Balances of
the Subsequent Loans, not specifically identified as Subsequent
Loans as of the Closing Date, do not exceed 25% of the Original
Aggregate Certificate Principal Balance.
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 (an "Acknowledgment")
acknowledging conveyance of the Loans identified on the applicable List of
Loans and the related Loan Files to the Trustee and declaring that the
Trustee, directly or through a Custodian, will hold all Loans that have
been delivered in trust, upon the trusts herein set forth, for the use and
benefit of all Certificateholders and the Class R Certificateholder.
(b) The Trustee or a Custodian shall review each Loan File, as
described in Exhibit G, within 60 days of the Closing Date or later receipt
by it of the Loan File. If, in its review of the Loan Files as described in
Exhibit G, the Trustee or a Custodian discovers a breach of the
representations or warranties set forth in Sections 2.03, 3.02, 3.03, 3.04
or 3.05 of this Agreement, or in the Officer's Certificates delivered
pursuant to Section 2.02(j) or 2.03(b)(vii) of this Agreement, the Trustee
or Custodian, as the case may be, shall notify the Seller and the
Originator shall cure such breach or repurchase or replace such Loan
pursuant to Section 3.06.
50
Section 2.05. REMIC Provisions.
(a) The Originator, as Servicer, and each holder of the Class R-I
Interest, the Class R-II Interest and the Class R-III Interest, by
acceptance thereof, each agree that, in accordance with the requirements of
Section 860D(b)(1) of the Code, the federal tax return of each of the
Subsidiary REMIC, Intermediate REMIC and Master REMIC for its first taxable
year shall provide an election for the Subsidiary REMIC, Intermediate REMIC
or Master REMIC, as the case may be (excluding the Pre-Funding Account, the
Basis Risk Reserve Fund and the Yield Maintenance Reserve Fund), to be
treated as a REMIC under the Code for such taxable year and all subsequent
taxable years, and the Trustee shall sign such return. In furtherance of
the foregoing, the Trustee (at the direction of the Originator, the Seller
or the Servicer), the Originator, the Seller and the Servicer shall take,
or refrain from taking, all such action as is necessary to maintain the
status of each of the Subsidiary REMIC, Intermediate REMIC or Master REMIC
as a REMIC under the REMIC Provisions of the Code, including, but not
limited to, the taking of such action as is necessary to cure any
inadvertent termination of REMIC status.
(b) The Regular Certificates (except for the Class P Certificate) are
being issued in eleven classes and are hereby designated by the Seller as
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
(except for the Class P Certificate) are irrevocably established as of the
Closing Date:
51
Original Class
Principal Balance
Interest Rate Xxx Xxxxx (or Notional Assumed Final
Class (Pass-Through Rate) Amount) Maturity Date
----------------------- ------------------------------------------ ------------------------- --------------------
Class A-1 a floating rate equal to the lesser of $ 223,734,000 August 15, 2033
one month LIBOR plus 0.14% per year or
the Adjusted Net WAC Cap Rate, but in no
event greater than 15.00% per year
Class A-2 the lesser of 5.03% per year or the
Adjusted Net WAC Cap Rate $ 55,246,000 August 15, 2033
Class A-3 the lesser of 5.39% per year or the
Adjusted Net WAC Cap Rate $ 84,857,000 August 15, 2033
Class A-4 the lesser of 6.19%per year or the
Adjusted Net WAC Cap Rate $ 89,015,000 August 15, 2033
Class A-5 the lesser of 6.79% (or, to the extent
provided in Section 8.06(c), 7.29%) per
year or the Adjusted Net WAC Cap Rate $ 39,148,000 August 15, 2033
Class A-IO (2) (2) August 15, 2033
Class M-1 a floating rate equal to lesser of one
month LIBOR plus 0.70% per year or the
Adjusted Net WAC Cap Rate, but in no
event greater than 15.00% $ 45,000,000 August 15, 2033
Class M-2 a floating rate equal to lesser of
one month LIBOR plus 1.15% per year or
the Adjusted Net WAC Cap Rate, but in no
event greater than 15.00% $ 33,000,000 August 15, 2033
Class B-1 a floating rate equal to lesser of one
month LIBOR plus 1.85% per year or the
Adjusted Net WAC Cap Rate, but in no
event greater than 15.00% $ 19,500,000 August 15, 2033
Class B-2 a floating rate equal lesser of one
month LIBOR plus 4.00% per year or the
Adjusted Net WAC Cap Rate, but in no
event greater than 15.00% $ 10,500,000 August 15, 2033
Class B-3I (3) $ (600,000,000) August 15, 2033
-----------------
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Payment Date in the month 24 months following the month of the maturity
date for the Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each class of Certificates that
represents one or more of the "regular interests" in the Master REMIC.
(2) Collectively, the Class A-IO Certificates will receive on each Payment Date
the distribution on such Payment Date to the Class I-AIO Interest under
Section 8.07(a)(i)(B), which is equivalent to interest accrued at the Class
A-IO Pass-Through Rate on the Class A-IO Notional Amount. Thus, the Class
A-IO Certificates shall effectively accrue interest on an initial Notional
Amount and at a rate as described in the Prospectus Supplement. For federal
tax purposes and pursuant to Treas. Reg. 1.860G-1(a)(2)(v), the Class A-IO
Certificates will be collectively entitled to 100% of the interest payable
on the Class I-AIO Interest.
52
(3) The Class B-3I Certificate is an interest-only regular interest certificate
entitled to the payment of the Class B-3I Distribution Amount. Nonetheless,
solely for federal tax purposes, the Class B-3I Certificate shall be
entitled to the payment of the Class B-3I Formula Distribution Amount.
The Seller does not represent that any regular interest in the Master
REMIC will, in fact, mature on any given date, except that each regular
interest of the Master REMIC will absolutely mature by the Assumed Final
Maturity Date as indicated above. Solely for federal income tax purposes,
the Master REMIC will issue a Class R-III Interest, which is hereby
designated by the Seller as constituting the sole class of "residual
interests" in the Master REMIC for purposes of Section 860G(a)(2) of the
Code. For purposes of certification, a Class R Certificate will represent
the Class R-III Interest, as well as the Class R-I and Class R-II Interests
described in Section 2.05(c) and Section 2.05(d).
(c) The Uncertificated Intermediate Interests are being issued in
eighteen classes and are hereby designated by the Seller as constituting
the "regular interests" in the Intermediate REMIC for the purposes of
Section 860G(a)(1) of the Code. The following terms of the Uncertificated
Intermediate Interests are irrevocably established as of the Closing Date:
Assumed
Original Class Principal Final
Interest Rate Per Annum Balance (or Notional Maturity Date
Class (Pass-Through Rate) Amount ) (1)
------------------- ------------------------------------------ -------------------------- --------------------
Class I-A1 Adjusted Net WAC Cap Rate $ 111,867,000 August 15, 2033
Class I-A2 Adjusted Net WAC Cap Rate $ 27,623,000 August 15, 2033
Class I-A3 Adjusted Net WAC Cap Rate $ 42,428,500 August 15, 2033
Class I-A4 Adjusted Net WAC Cap Rate $ 44,507,500 August 15, 2033
Class I-A5 Adjusted Net WAC Cap Rate $ 19,574,000 August 15, 2033
Class I-AIO(1) (2) (2) August 15, 2033
Class I-AIO(2) (2) (2) August 15, 2033
Class I-AIO(3) (2) (2) August 15, 2033
Class I-AIO(4) (2) (2) August 15, 2033
Class I-AIO(5) (2) (2) August 15, 2033
Class I-AIO(6) (2) (2) August 15, 2033
Class I-AIO(7) (2) (2) August 15, 2033
Class I-AIO(8) (2) (2) August 15, 2033
Class I-M1 Adjusted Net WAC Cap Rate $ 22,500,000 August 15, 2033
Class I-M2 Adjusted Net WAC Cap Rate $ 16,500,000 August 15, 2033
Class I-B1 Adjusted Net WAC Cap Rate $ 9,750,000 August 15, 2033
Class I-B2 Adjusted Net WAC Cap Rate $ 5,250,000 August 15, 2033
Class I-Accrual Adjusted Net WAC Cap Rate $ 300,000,000 August 15, 2033
-------------------
53
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Payment Date in the month 24 months following the month of the maturity
date for the Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each class of interests that represents
one or more of the "regular interests" in the Intermediate REMIC.
(2) Each Class I-AIO Interest comprising the Class I-AIO Interest is entitled
to that specified portion of the interest paid on a Class S-2 Interest as
designated in Section 8.07(a)(i)(B). Therefore, solely for federal income
tax purposes, the corresponding Pass-Through Rate and initial Notional
Amount of each Class I-AIO Interest as of the Closing Date is that
designated in Section 8.07(a)(i)(B) and applicable at such time.
The Seller does not represent that any Class of Uncertificated
Intermediate Interests will, in fact, mature on any given date, except that
each regular interest of the Intermediate REMIC will absolutely mature by
the Assumed Final Maturity Date as indicated above. Solely for federal
income tax purposes, the Intermediate REMIC will issue a Class R-II
Interest, which is hereby designated by the Seller as constituting the sole
class of "residual interests" in the Intermediate REMIC for purposes of
Section 860G(a)(2) of the Code.
(d) The Uncertificated Subsidiary Interests are being issued in six
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:
Interest Assumed Final
Rate Per Annum Original Maturity Date
Class (Pass-Through Rate) Principal Balance (1)
-------------------- ---------------------------------- -------------------------- -------------------
Class S-1 Net WAC Cap Rate $ 470,000,000 August 15, 2033
Class S-2(1) Net WAC Cap Rate $ 64,000,000 August 15, 2033
Class S-2(2) Net WAC Cap Rate $ 11,000,000 August 15, 2033
Class S-2(3) Net WAC Cap Rate $ 35,000,000 August 15, 2033
Class S-2(4) Net WAC Cap Rate $ 20,000,000 August 15, 2033
Class P (2) $ 100 August 15, 2033
----------------------
(1) Solely for purposes of Treas. Reg. 1.860G-1(a)(4)(iii), a hypothetical
Payment Date in the month 24 months following the month of the maturity
date for the Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each class of interests that represents
one or more of the "regular interests" in the Subsidiary REMIC.
(2) The Class P Certificate is entitled to all Prepayment Charges.
The Seller does not represent that any Class of Uncertificated
Subsidiary Interests will, in fact, mature on any given date, except that
each regular interest of the Subsidiary REMIC will absolutely mature by the
Assumed Final Maturity Date as indicated above. Solely for federal income
tax purposes, the Subsidiary REMIC will issue a Class R-I Interest, which
is hereby designated by the Seller as the sole class of "residual
interests" in the Subsidiary REMIC for purposes of Section 860G(a)(2) of
the Code.
(e) The Closing Date, which is the day on which each of the Subsidiary
REMIC, the Intermediate REMIC and the Master REMIC will issue all of its
regular and residual interests, is
54
hereby designated as the "startup day" of each of the Subsidiary REMIC, the
Intermediate REMIC and the Master REMIC within the meaning of Section
860G(a)(9) of the Code.
(f) After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall:
(i) accept any contribution of assets to the Subsidiary REMIC, the
Intermediate REMIC or the Master REMIC,
(ii) dispose of any portion of the Subsidiary REMIC, the Intermediate
REMIC or the Master REMIC, other than as provided in Sections
3.06, 3.08 and 8.06,
(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 3.07,
(iv) accept any contribution after the Closing Date that is subject to
the tax imposed by Section 860G(d) of the Code or
(v) engage in any activity or enter into any agreement that would
result in the receipt by the Subsidiary REMIC, the Intermediate
REMIC or the Master REMIC of any "net income from foreclosure
property" as defined in Section 860G(c)(2) of the Code, unless,
prior to any such action set forth in clauses (i), (ii), (iii),
(iv) or (v) the Trustee shall have received an unqualified
Opinion of Counsel, which opinion shall not be an expense of the
Trust, stating that such action will not, directly or indirectly,
(A) adversely affect the status of the Subsidiary REMIC, the
Intermediate REMIC or the Master REMIC as a REMIC or the
status of the Uncertificated Subsidiary Interests as
"regular interests" in the Subsidiary REMIC, the status of
the Class R-I Interest as the sole class of "residual
interests" in the Subsidiary REMIC, the status of the
Uncertificated Intermediate Interests as "regular interests"
in the Intermediate REMIC, the status of the Class R-II
Interest as the sole class of "residual interests" in the
Intermediate REMIC, the status of the Regular Certificates
as "regular interests" in the Master REMIC, or the status of
the Class R-III Interest as the sole class of "residual
interests" in the Master REMIC,
(B) affect the distributions payable hereunder to the
Certificateholders or
(C) result in the imposition of any lien, charge or encumbrance
upon the Subsidiary REMIC, the Intermediate REMIC or the
Master REMIC.
55
(g) Upon the acquisition of any real property (including interests in
real property), or any personal property incident thereto, in connection
with the default of a Contract, the Servicer and the Trustee (at the
direction of the Servicer) shall take, or cause to be taken, such action as
is necessary to sell or otherwise dispose of such property within such
period as is then required by the Code in order for such property to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8)
of the Code, unless the Servicer and the Trustee receive an Opinion of
Counsel to the effect that the holding by the Subsidiary REMIC, the
Intermediate 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, the
Intermediate REMIC or the Master REMIC, as defined in Section 860F of the
Code, or cause the Subsidiary REMIC, the Intermediate REMIC or the Master
REMIC to fail to qualify as a REMIC at any time that the Uncertificated
Subsidiary Interests, Class R Certificate, Uncertificated Intermediate
Interests or Regular 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, the
Intermediate REMIC or the Master REMIC of any "income from nonpermitted
assets," within the meaning of Section 860F(a)(2)(B) of the Code.
Section 2.06. Seller Option to Substitute for Prepaid Loans. The Seller
may, at its option, substitute new loans for Loans as to which a Principal
Prepayment in Full has been received by the Servicer prior to November 1, 2001
("Prepaid Loans"), up to a maximum of 5% of the Cut-Off Date Pool Principal
Balance, upon satisfaction of the following conditions:
(i) the Seller shall have conveyed to the Trustee the Loan to be
substituted for the Prepaid Loan and the Loan File related to such
Loan and the Seller shall have marked the Electronic Ledger indicating
that such Loan constitutes part of the Trust;
(ii) the Loan to be substituted is an Eligible Substitute Loan and the
Seller delivers an Officers' Certificate, substantially in the form of
Exhibit J-3 hereto, to the Trustee certifying that such Loan is an
Eligible Substitute Loan;
(iii) 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 Loan
to be substituted as collateral;
(iv) the Seller shall have delivered to the Trustee an executed assignment
to the Trustee on behalf of the Trust in recordable form for the
mortgage securing such Loan to be substituted;
(v) such substitution shall be accomplished prior to the Determination
Date immediately following the calendar month in which the Principal
56
Prepayment in Full was received by the Servicer, and no such
substitution shall take place after November 1, 2001.
(vi) the Seller shall have delivered to the Trustee an Opinion of Counsel
(A) to the effect that the substitution of such Loan for such Prepaid
Loan 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
(vii) if the Principal Prepayment received in respect of such Prepaid Loan
is greater than the Scheduled Principal Balance of the Loan to be
substituted, such excess shall be distributed to Certificateholders on
the related Payment Date as a prepayment of principal.
Upon satisfaction of such conditions, the Trustee shall add such Loan to be
substituted to the List of Loans.
Any substitutions pursuant to this Section 2.06 may be accomplished on a
loan-by-loan basis or on an aggregate basis as to all Prepaid Loans with respect
to a given calendar month.
Article III
REPRESENTATIONS AND WARRANTIES
The Seller and the Originator make the following representations and
warranties. The Trustee will rely on the representations and warranties in
accepting the Loans in trust and issuing the Certificates and the Class R
Certificate on behalf of the Trust. The repurchase or substitution and
indemnification obligations of the Originator set forth in Section 3.06
constitute the sole remedies available to the Trust, the Certificateholders or
the Class R Certificateholder for a breach of a representation or warranty of
the Originator set forth in Sections 2.03, 3.02, 3.03, 3.04 or 3.05 of this
Agreement, or in the Officer's Certificates delivered pursuant to Sections
2.02(j) or 2.03(b)(vii) of this Agreement.
Section 3.01. Representations and Warranties Regarding the Seller. The
Seller represents and warrants to the Certificateholders and the Class R
Certificateholder, 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
57
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 Certificate of
Incorporation or Bylaws of the Seller, or constitute a material breach of
any mortgage, indenture, contract or other agreement to which the Seller is
a party or by which the Seller may be bound.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement, the Certificates or the Class
R Certificate 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 licensed in each state in which
Loans were originated to the extent the Seller is required to be licensed
by applicable law in connection with the origination and servicing of the
Loans.
(g) Chief Executive Office. The chief executive office of the Seller
is at 300 Landmark Towers, 000 Xx. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx
00000-0000. The Seller is a corporation organized and existing under the
laws of the State of Minnesota.
(h) No Default. The Seller 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 is condition (financial or other) or operations or its
properties or the consequences of which would materially and adversely
affect its performance hereunder and under its other Related Documents. The
Seller is not in default under any agreement involving financial
obligations or on any outstanding obligation which
58
would materially adversely impact its financial condition or operations or
legal documents associated with the transaction contemplated by this
Agreement or the other Related Documents.
(i) Lawful Assignment. The Seller has duly executed a valid blanket
assignment of the Loans transferred to the Trust, and has transferred all
its right, title and interest in such Loans. The Assignment, any and all
documents executed and delivered by the Seller pursuant to Section 2.01(a),
and this Agreement each constitutes the legal, valid and binding obligation
of the Seller enforceable in accordance with its respective terms.
(j) Good Title. The Seller is the sole owner of the Loans and has the
authority to sell, transfer and assign such Loans to the Trust under the
terms of this Agreement. There has been no assignment, sale or
hypothecation of the Loans by the Seller, which hypothecation terminates
upon sale of the Loans to the Trust. The Seller has good and marketable
title to the Loans, free and clear of any encumbrance, equity, loan,
pledge, charge, claim, or security interest of any type and has full right
to transfer the Loans to the Trust.
Section 3.02. Representations and Warranties Regarding Each Loan. 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 and the Class
R Certificateholder, as of the Closing Date with respect to each Loan identified
on the List of Loans attached to this Agreement as Exhibit L and as of each
Subsequent Transfer Date with respect to each Subsequent Loan identified on the
List of Loans attached to the related Subsequent Transfer Instrument:
(a) List of Loans. The information set forth in the List of Loans is
true and correct as of its date.
(b) Payments. No scheduled payment due under the Loan was delinquent
over 59 days as of the Cut-off Date if an Initial Loan or Additional Loan,
or 29 days as of the related Cut-off Date or Subsequent Cut-off Date, if a
Subsequent Loan.
(c) Costs Paid and No Waivers. The terms of the Loan have not been
waived, altered or modified in any respect, except by instruments or
documents identified in the Loan File. All costs, fees and expenses
incurred in making, closing and perfecting the lien of the Loan have been
paid. The subject real property has not been released from the lien of such
Loan.
(d) Binding Obligation. The Loan 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 Loan 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 Loan or the exercise of any right
thereunder will not render the Loan 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.
59
(f) Insurance Coverage. The Originator has been named as an additional
insured party under any hazard insurance on the property described in the
Loan, to the extent required by the Originator's underwriting guidelines.
If upon origination of the Loan, the property securing the Loan was in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and if flood insurance was required
by federal regulation and such flood insurance has been made available in
the locale where the property is located), the property is covered by a
flood insurance policy of the nature and in an amount which is consistent
with the servicing standard set forth in Section 5.02.
(g) Combined LTV. The Combined LTV for each Initial Loan and
Additional Loan is not greater than 100%. The Combined LTV for each
Subsequent Loan is not greater than 100%.
(h) Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Loan under this Agreement or pursuant to transfers of the
Certificates or Class R Certificate unlawful or render the Loan
unenforceable. The Originator has duly executed a valid blanket assignment
of the Loans transferred to the Seller, and has transferred all its right,
title and interest in such Loans, including all rights the Originator may
have against the originating lender with respect to Loans originated by a
lender other than the Originator, to the Seller. The blanket assignment,
any and all documents executed and delivered by the Originator pursuant to
Sections 2.01(b) and 2.03(b), and this Agreement each constitutes the
legal, valid and binding obligation of the Originator enforceable in
accordance with its respective terms.
(i) Compliance with Law. At the date of origination of the Loan, all
requirements of any federal and state laws, rules and regulations
applicable to the Loan, including, without limitation, usury and truth in
lending 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.
(j) Loan in Force. The Loan has not been satisfied or subordinated in
whole or in part or rescinded, and the real estate securing such Loan has
not been released from the lien of such Loan in whole or in part.
(k) Valid Lien. The Loan has been duly executed and delivered by the
Obligor, and the lien created thereby has been duly recorded, or has been
delivered to the appropriate governmental authority for recording and will
be duly recorded within 180 days, and constitutes a valid and perfected
first, second or third priority lien, as the case may be, on the real
estate described in such Loan.
(l) Capacity of Parties. The signature(s) of the Obligor(s) on the
Loan are genuine and all parties to the Loan had full legal capacity to
execute the Loan.
(m) Good Title. The Originator is the sole owner of the Loan and has
the authority to sell, transfer and assign such Loan to the Seller under
the terms of the Transfer Agreement.
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There has been no assignment, sale or hypothecation of the Loan by the
Originator except the usual past hypothecation of the Loan in connection
with the Originator's normal banking transactions in the conduct of its
business, which hypothecation terminates upon sale of the Loan to the
Seller. The Originator has good and marketable title to the Loan, free and
clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Loan to the
Seller.
(n) No Defaults. As of the applicable Cut-off Date, there was no
default, breach, violation or event permitting acceleration existing under
the Loan 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 Loan (except payment delinquencies
permitted by clause (b) above). The Originator has not waived any such
default, breach, violation or event permitting acceleration except payment
delinquencies permitted by clause (b) above.
(o) Equal Installments. The Loan provides for monthly payments
(except, in the case of a Balloon Loan, for the final monthly payment of
such Loan) which fully amortize the Loan over its term.
(p) Enforceability. Each Loan 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
lien provided thereby.
(q) One Original. There is only one original executed promissory note,
which promissory note has been delivered to the Trustee or its Custodian on
or before the Closing Date or Subsequent Transfer Date if a Subsequent
Loan.
(r) Genuine Documents. All documents submitted are genuine, and all
other representations as to each Loan, including the List of Loans, are
true and correct. Any copies of documents provided by the Originator are
accurate and complete (except that, with respect to each Loan that was
originated by a lender other than the Originator, the Originator makes such
representation and warranty only to the best of the Originator's
knowledge).
(s) Origination. Each Loan was originated by a home equity lender in
the ordinary course of such lender's business or was originated by the
Originator directly.
(t) Underwriting Guidelines. Each Loan was originated or purchased in
accordance with the Originator's then-current underwriting guidelines.
(u) Good Repair. The property described in the Loan is, to the best of
the Originator's knowledge, free of damage and in good repair.
(v) Qualified Mortgage. The Loan is a "qualified mortgage" within the
meaning of the REMIC Provisions. The Originator represents and warrants
that, either as of (i) the date of origination (within the meaning of the
REMIC Provisions) or (ii) the Closing Date or, if a Subsequent Loan, the
Subsequent Transfer Date, the fair market value of the interest in real
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property securing each Loan was not less than 80% of the "adjusted issue
price" (in each case within the meaning of the REMIC Provisions) of such
Loan.
(w) Prepayment Term. No Prepayment Charges are payable under the Loan
after the 60th month following the origination date of the Loan.
Section 3.03. Additional Representations and Warranties. The Seller hereby
represents and warrants to the Trustee for the benefit of the Certificateholders
and the Class R Certificateholder, as of the Closing Date with respect to each
Loan identified on the List of Loans attached to this Agreement as Exhibit L and
as of each Subsequent Transfer Date with respect to each Subsequent Loan
identified on the List of Loans attached to the related Subsequent Transfer
Instrument:
(a) Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Loan under this Agreement or pursuant to transfers of the
Certificates or Class R Certificate unlawful or render the Loan
unenforceable. The Seller has duly executed a valid blanket assignment of
the Loans transferred to the Trust, and has transferred all its right,
title and interest in such Loans. 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 Loan and has the
authority to sell, transfer and assign such Loan to the Trust under the
terms of this Agreement. There has been no assignment, sale or
hypothecation of the Loan by the Seller. The Seller has good and marketable
title to the Loan, free and clear of any encumbrance, equity, loan, pledge,
charge, claim, lien or encumbrance of any type and has full right to
transfer the Loan to the Trust.
Section 3.04. Representations and Warranties Regarding the Loans 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 and the Class R
Certificateholder, as of the Closing Date with respect to the Initial Loans and
Additional Loans, and as of each Subsequent Transfer Date with respect to the
related Subsequent Loans, that:
(a) Amounts. As of the Closing Date, the sum of the Cut-off Date Pool
Principal Balance, plus the Original Pre-Funded Amount, equals at least the
Original Aggregate Certificate Principal Balance. By Cut-off Date Principal
Balance, the Initial Loans and Additional Loans plus the Subsequent Loans
specifically identified as of the Closing Date represent at least 75% of
the Original Aggregate Certificate Principal Balance.
(b) Characteristics. The Loans have the following characteristics:
(i) 100% are secured by a mortgage, deed of trust or security
deed creating a first, second or third lien on the related
real estate;
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(ii) none has a remaining or original maturity of more than 360
months;
(iii) no Initial Loan has a final scheduled payment date later
than January 23, 2032, no Additional Loan has a final
scheduled payment date later than September 8, 2031 and no
such Subsequent Loan has a final scheduled payment date
later than December 22, 2031
(iv) none had a principal balance at origination of more
$634,500.00; and
(v) none of the Initial or Additional Loans have a Loan Interest
Rate less than 6.00%.
The weighted average (by Scheduled Principal Balance) loan to value
ratio of the Loans as of the Post-Funding Payment Date will not be more
than 200 basis points more than such ratio with respect to the Initial
Loans.
The weighted average (by Scheduled Principal Balance) of the Loan
Interest Rates of the Loans as of the Post-Funding Payment Date will not be
more than 25 basis points less than the weighted average of the Loan
Interest Rates of the Initial Loans.
The percentage (by Scheduled Principal Balance) of the Loans as of the
Post-Funding Payment Date which are identified by the Originator under its
standard underwriting criteria as "B," "C," and "D" credits will not be
more than 300 basis points, 200 basis points, and 100 basis points,
respectively, more than the percentage of Initial Loans identified as "B,"
"C," and "D" credits.
All Loans. 79.62% (by Scheduled Principal Balance) of the Initial
Loans are secured by a first priority lien, 20.11% by a second priority
lien and 0.28% by a third priority lien. As of the Post-Funding Payment
Date, the percentage of the Loans secured by a second priority lien is not
more than 22% and not more than 0.50% are secured by a third priority lien.
The percentage (by Scheduled Principal Balance) of the Loans as of the
Closing Date which are identified by the Originator as debt consolidation
loans is 10.05%. As of the Subsequent Transfer Date, such percentage of
debt consolidation loans will not be greater than 11%.
(c) Geographic Concentrations. By Cut-off Date Principal Balance,
11.86% of the Initial and Additional Loans are secured by property located
in California, 9.12% in Florida, 6.75% in Texas and 6.61% in Michigan. No
other state represents more than 5.00% of the aggregate Cut-off Date
Principal Balances of the Initial and Additional Loans.
The percentage (by Scheduled Principal Balance) of the Loans as
of the Post-Funding Payment Date which are owner-occupied will be at
least 97%.
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The percentage (by Scheduled Principal Balance) of the Loans as
of the Post-Funding Payment Date which are single family will be at
least 92%.
No more than 1% of the Loans by Cut-off Date Principal Balance
are secured by property located in an area with the same five-digit
zip code.
(d) Marking Records. The Originator has caused the portions of the
Electronic Ledger relating to the Loans to be clearly and unambiguously
marked to indicate that such Loans constitute part of the Trust and are
owned by the Trust in accordance with the terms of the Trust created
hereunder.
(e) No Adverse Selection. No adverse selection procedures have been
employed in selecting the Loans.
(f) Lender Concentration. No more than 5.0% of the Loans, by Cut-off
Date Principal Balance, were originated by any one lender (other than the
Originator).
(g) Home Ownership and Equity Protection Act. With respect to any Loan
subject to the Home Ownership and Equity Protection Act of 1994, each such
Loan has been originated and serviced in compliance with the provisions
thereof.
Section 3.05. Representations and Warranties Regarding the Loan 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 and the Class R
Certificateholder that:
(a) Possession. On the Closing Date, the Trustee or a Custodian will
have possession of each original Initial Loan and Additional Loan and the
related Loan File. On each Subsequent Transfer Date, the Originator will
have possession of each original Subsequent Loan being transferred to the
Trust on that Subsequent Transfer Date and the related Loan File. There are
and there will be no custodial agreements or servicing contracts in effect
materially and adversely affecting the rights of the Originator to make, or
cause to be made, any delivery required hereunder or under the Transfer
Agreement.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Loans and the Loan 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. Repurchases of Loans for Breach of Representations and
Warranties.
(a) Subject to Section 3.07, the Originator shall repurchase a Loan,
at its Repurchase Price, not later than 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 set forth
in Sections 2.03, 3.02, 3.03, 3.04 or 3.05, or in the Officer's
Certificates delivered pursuant to Sections 2.02(j) or 2.03(b)(vii), that
materially and adversely affects the Trust's, the
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Certificateholders' or the Class R Certificateholder's interest in such
Loan and which breach has not been cured within such time; 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 5 Business Days of the date of such
discovery and
(ii) with respect to any Loan incorrectly described on the List of
Loans with respect to Cut-off Date Principal Balance, which the
Originator would otherwise be required to repurchase pursuant to
this Section, the Originator may, in lieu of repurchasing such
Loan, deliver to the Seller for deposit in the Certificate
Account within 90 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
and the Class R Certificateholder on the immediately following
Payment Date as a collection of principal or interest on such
Loan, 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.
(b) On or prior to the date that is the second anniversary of the
Closing Date, the Originator may, at its election, substitute an Eligible
Substitute Loan for a Loan that it is obligated to repurchase pursuant to
Section 3.06(a) (such Loan being referred to as the "Replaced Loan") upon
satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the Loan to be
substituted for the Replaced Loan and the Loan File related to
such Loan and the Originator shall have marked the Electronic
Ledger indicating that such Loan constitutes part of the Trust;
(ii) the Loan to be substituted is an Eligible Substitute Loan and the
Originator delivers an Officers' Certificate, substantially in
the form of Exhibit J-2 hereto, to the Trustee certifying that
such Loan is an Eligible Substitute Loan;
(iii) the Originator shall have delivered to the Trustee evidence of
filing of a UCC-1 financing statement executed by the Originator
as debtor, naming the Seller as secured party and filed in
Minnesota, listing such Loan to be substituted as collateral;
(iv) the Originator shall have delivered to the Trustee an executed
assignment to the Seller and to the Trustee on behalf of the
Trust in recordable form for the mortgage securing such Loan to
be substituted;
(v) the Originator shall have delivered to the Trustee an Opinion of
Counsel
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(A) to the effect that the substitution of such Loan for such
Replaced Loan 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 Scheduled Principal Balance of such Replaced Loan is
greater than the Scheduled Principal Balance of the Loan to be
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 Loan to be
substituted to, and delete such Replaced Loan from, the List of Loans. 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 such substitution of a
Loan, the Originator shall give written notice of such substitution to S&P
and Xxxxx'x.
(c) If the Originator is required to repurchase a Loan under Section
3.06(a) or has elected to substitute an Eligible Substitute Loan for a Loan
under Section 3.06(b), and if the reason for such repurchase or
substitution is that the Originator has failed to deliver to the Trustee
the Loan File for the Loan to be repurchased or substituted for (except in
the case of a failure to deliver evidence of the lien on the related
improved property and evidence of due recording of such mortgage, deed of
trust or security deed, if available), then, notwithstanding the time
periods set out in Sections 3.06(a) and 3.06(b), the Originator shall
either
(i) repurchase such Loan, at its respective Repurchase Price, within
30 days of the Closing Date, or
(ii) substitute an Eligible Substitute Loan for the Loan within 90
days of the Closing Date.
(d) The Originator shall defend and indemnify the Seller, the Trustee,
the Certificateholders, and the Class R Certificateholder 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 any third-party action arising out
of any breach of any such representation and warranty.
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Section 3.07. No Repurchase Under Certain Circumstances. Notwithstanding
any provision of this Agreement to the contrary, no repurchase or substitution
pursuant to Section 3.06 shall be made unless the Originator (at its own
expense) 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 Trust to fail to qualify as a REMIC while any regular
interest in such REMIC 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 Originator diligently shall attempt to obtain such Opinion of Counsel. In
the case of a repurchase or deposit pursuant to Section 3.06(a) or (b), 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
Loan 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 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)(i) of the Code
or imposed on "contributions after startup date" under Section 860G(d) of the
Code from amounts otherwise distributable to the Class R Certificateholder. 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 give notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
In the event any tax that is guaranteed by the Originator pursuant to this
Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
Section 3.08. Certain Representations and Warranties Regarding Perfection
of the Loans. The Seller represents that:
(a) This Agreement creates a valid and continuing security interest
(as defined in the UCC) in the Loans in favor of the Trustee, which
security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from the Seller.
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(b) The Loans constitute "instruments" within the meaning of the
applicable UCC.
(c) Seller owns and has good and marketable title to the Loans free
and clear of any Lien, claim or encumbrance of any Person.
(d) The Seller has received all consents and approvals required by the
terms of the Loans to the sale of the Loans hereunder to the Trust.
(e) The Seller has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Loans granted to the Trust hereunder.
(f) Other than the security interest granted to the Trust pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Loans. The Seller
has not authorized the filing of and is not aware of any financing
statements against the Seller that include a description of collateral
covering the Loans other than any financing statement relating to the
security interest granted to the Trust hereunder or that has been
terminated. The Seller is not aware of any judgment or tax lien filings
against the Seller.
(g) The Seller has in its possession all original copies of the
mortgage notes and promissory notes that constitute or evidence the Loans.
The mortgage notes and promissory notes that constitute or evidence the
Loans do not have any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Trust.
All financing statements filed or to be filed against the Seller in favor
of the Trust in connection herewith describing the Loans contain a
statement to the following effect: "A purchase of or security interest in
any collateral described in this financing statement will violate the
rights of the Trust."
Article IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
Section 4.01. Transfer of Loans.
(a) On or prior to the Closing Date, the Originator shall deliver the
Loan Files to the Trustee. The Trustee shall maintain the Loan Files at its
office or with a duly appointed Xxxxxxxxx, who shall act as the agent of
the Trustee on behalf of the Certificateholders. The Trustee may release a
Loan File to the Servicer pursuant to Section 5.07. The Originator has
filed a form UCC-1 financing statement regarding the sale of the Loans to
the Seller, and shall file continuation statements in respect of such UCC-1
financing statement as if such financing statement were necessary to
perfect the security interest granted pursuant to Section 2.01(c). The
Originator shall take any other actions necessary to maintain the
perfection of such security interest.
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(b) The Originator shall file promptly in the appropriate recording
offices the assignments to the Trustee on behalf of the Trust of the
mortgage, deed of trust or security deed securing each Loan relating to
real estate located in Maryland, and shall deliver to the Trustee an
Opinion of Counsel to the effect that the recordation of assignments of the
mortgages, deeds of trust and security deeds, securing Loans relating to
real estate located in any state other than Maryland, is not necessary to
effect the assignment to the Trustee of the Originator's lien on the real
property securing such Loans.
Section 4.02. Costs and Expenses. The Servicer agrees to pay all reasonable
costs and disbursements in connection with the vesting (including the perfection
and the maintenance of perfection, as against all third parties) in the Trust of
all right, title and interest in and to the Loans (including, without
limitation, the mortgage or deed of trust on the related real estate granted
thereby).
Article V
SERVICING OF LOANS
Section 5.01. Responsibility for Loan Administration. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Loans and perform or cause to be performed all contractual and customary
undertakings of the holder of the Loans 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 Loans 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 loans
(including manufactured housing contracts) serviced by the Servicer; provided,
however, that such degree of skill and care shall be at least as favorable as
the degree of skill and care generally applied by prudent servicers of home
equity loans for prudent institutional investors.
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 Loan.
Section 5.04. Inspection.
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(a) At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business
hours to the Servicer's records relating to the Loans, which have not
previously been provided to the Trust, and will cause its personnel to
assist in any examination of such records by the Trustee. The examination
referred to in this Section will be conducted in a manner which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination
the Trustee may make, the Trustee may, using generally accepted audit
procedures, verify the status of each Loan 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 Loan in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Loans at its principal executive office for
inspection by Certificateholders.
(c) A Certificateholder holding Certificates representing in the
aggregate at least 5% of the Aggregate Certificate Principal Balance shall
have the rights of inspection afforded to the Trustee pursuant to this
Section 5.04.
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 shall be an Eligible
Account. The Servicer shall pay into the Certificate Account, as promptly
as practicable (but not later than the next Business Day) following receipt
thereof, all amounts received with respect to the Loans, including
Prepayment Charges, other than extension fees and assumption fees, which
fees shall be retained by the Servicer as compensation for servicing the
Loans, and other than Liquidation Expenses permitted by Section 5.08. The
Trustee shall hold all amounts paid into the Certificate Account under this
Agreement in trust for the Trustee, the Certificateholders and the Class R
Certificateholder 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
Payment Date. Any investment of funds in the Certificate Account shall be
made in Eligible Investments held by a financial institution in accordance
with the following requirements:
(i) all Eligible Investments shall be held in an account with such
financial institution in the name of the Trustee, and the
agreement governing such account shall be governed by the laws of
the State of Minnesota,
(ii) with respect to securities held in such account, such securities
shall be
(A) certificated securities (as such term is used in N.Y.
X.X.X.xx. 8-102(4)(i)), securities deemed to be certificated
securities under applicable regulations of the United States
government, or
70
uncertificated securities issued by an issuer organized
under the laws of the State of New York or the State of
Delaware,
(B) either
(1) in the possession of such institution,
(2) in the possession of a clearing corporation (as such
term is used in Minn. Stat. ss. 8-102(5)) in the State
of New York, registered in the name of such clearing
corporation or its nominee, not endorsed for collection
or surrender or any other purpose not involving
transfer, not containing any evidence of a right or
interest inconsistent with the Trustee's security
interest therein, and held by such clearing corporation
in an account of such institution,
(3) held in an account of such institution with the Federal
Reserve Bank of New York or the Federal Reserve Bank of
Minneapolis, or
(4) in the case of uncertificated securities, issued in the
name of such institution, and
(C) identified, by book entry or otherwise, as held for the
account of, or pledged to, the Trustee on the records of
such institution, and such institution shall have sent the
Trustee a confirmation thereof, and
(iii) with respect to repurchase obligations held in such account,
such repurchase obligations shall be identified by such
institution, by book entry or otherwise, as held for the account
of, or pledged to, the Trustee on the records of such
institution, and the related securities shall be held in
accordance with the requirements of clause (ii) above.
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 Payment Date
pursuant to Section 8.04. An amount equal to any net loss on such
investments shall be deposited in the Certificate Account by the Seller 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, or any agency or instrumentality of the
United States of
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America the obligations of which are backed by the full faith and
credit of the United States of America;
(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 debt obligations of
such depository institution or trust company are rated at
least A-1+ by S&P and P-1 by Xxxxx'x, 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 a rating of AAA by both S&P and
Xxxxx'x, and whose only investments are in securities described
in clauses (i) and (ii) above;
(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 AA from each of the Rating Agencies that has rated the
corporation; 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 S&P and at
least P-1 from Xxxxx'x at the time of such investment;
(vii) money market funds rated AAAm or AAAm-G by S&P ; and
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(viii) other obligations or securities that are acceptable to each of
the Rating Agencies as an Eligible Investment hereunder and will
not reduce the rating assigned to any Class of Certificates by
each of the Rating Agencies below the lower of the then-current
rating or the rating assigned to such Certificates as of the
Closing Date by each of the Rating Agencies, as evidenced in
writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
The Trustee may trade with itself or an Affiliate in the purchase or
sale of such Eligible Investments. The Servicer acknowledges that to the
extent that regulations of the Comptroller of the Currency or other
applicable regulatory agency grant the Servicer the right to receive
brokerage confirmations of security transactions as they occur, the
Servicer specifically waives receipt of such confirmations.
(c) If at any time the Trustee receives notice (from any of the Rating
Agencies, the Servicer or otherwise) that the Certificate Account has
ceased to be an Eligible Account, the Trustee shall, as soon as practicable
but in no event later than five 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 shall notify each of the Rating Agencies and the Servicer of
the location of the Certificate Account.
Section 5.06. Enforcement.
(a) The Servicer shall, consistent with customary servicing
procedures, act with respect to the Loans in such manner as will maximize
the receipt of principal and interest on such Loans and Liquidation
Proceeds with respect to Liquidated Loans. The Servicer shall exercise its
discretion, consistent with customary servicing procedures and the terms of
this Agreement, with respect to the enforcement of defaulted Loans in such
manner as will maximize the receipt of principal and interest with respect
thereto, including but not limited to the sale of such Loan to a third
party, the modification of such Loan, or foreclosure upon the related real
property and disposition thereof.
(b) In accordance with the standard of care specified in Section 5.02,
the Servicer may, in its own name, if possible, or as agent for the Trust,
commence proceedings for the foreclosure of any subject real estate, or may
take such other steps that in the Servicer's reasonable judgment will
maximize Liquidation Proceeds with respect to the Loan, including, for
example, the sale of the Loan to a third party for foreclosure or
enforcement and, in the case of any default on a related prior mortgage
loan, the advancing of funds to correct such default and the advancing of
funds to pay off a related prior mortgage loan, which advances are
Liquidation Expenses that will be reimbursed to the Servicer out of related
Liquidation Proceeds before the related Net Liquidation Proceeds are paid
to Certificateholders and the Class R Certificateholder. The Servicer shall
also deposit in the Certificate Account any Net Liquidation Proceeds
received in connection with any Loan which became a Liquidated Loan in a
prior Due Period.
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(c) The Servicer may sue to enforce or collect upon Loans, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Loan, the act of commencement
shall be deemed to be an automatic assignment of the Loan 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 Loan on the
ground that it is not a real party in interest or a holder entitled to
enforce the Loan, the Trustee on behalf of the Trust shall, at the
Servicer's expense, take such steps as the Servicer deems necessary to
enforce the Loan, including bringing suit in its name or the names of the
Certificateholders and the Class R Certificateholder.
(d) The Servicer may grant to the Obligor on any Loan any rebate,
refund or adjustment out of the Certificate Account that the Servicer in
good faith believes is required because of the Principal Prepayment in Full
of the Loan. The Servicer will not permit any rescission or cancellation of
any Loan.
(e) The Servicer shall enforce any due-on-sale clause in a Loan if
such enforcement is called for under its then current servicing policies
for obligations similar to the Loans, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Loan is permitted by the Servicer,
upon conveyance of the related property the Servicer shall use its best
efforts to obtain an assumption agreement in connection therewith.
(f) Any provision of this Agreement to the contrary notwithstanding,
the Servicer shall not agree to the modification or waiver of any provision
of a Loan at a time when such Loan is not in default or such default is not
reasonably foreseeable, if such modification or waiver would both (i) be
treated as a taxable exchange under Section 1001 of the Code or any
proposed, temporary or final Treasury Regulations promulgated thereunder
and (ii) cause the Trust to fail to qualify as a REMIC or cause the
imposition of any tax on "prohibited transactions" or "contributions after
the startup date" under the REMIC Provisions.
Section 5.07. Trustee to Cooperate.
(a) Upon payment in full on any Loan, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the
Servicer) on the next succeeding Payment 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) and shall request delivery of the Loan and
Loan File to the Servicer. Upon receipt of such delivery and request, the
Trustee shall promptly release or cause to be released such Loan and Loan
File to the Servicer. Upon receipt of such Loan and Loan File, each of
Conseco Finance Corp. (if different from the Servicer) and the Servicer is
authorized to execute an instrument in satisfaction of such Loan and to do
such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate any lien on the
related real estate. The Servicer shall determine when a Loan has been paid
in full; provided that, to the extent that insufficient payments are
received on a Loan credited by the
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Servicer as prepaid or paid in full and satisfied, the shortfall shall be
paid by the Servicer out of its own funds, without any right of
reimbursement therefor (except from additional amounts recovered from the
related Obligor or otherwise in respect of such Loan), and deposited in the
Certificate Account.
(b) From time to time as appropriate for servicing and foreclosing in
connection with a Loan, 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 Loan and the related Loan 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 Loan to be released to the
Servicer with a notation that the Loan 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 R
Certificateholder's rights and remedies with respect to Loans.
(c) The Servicer's receipt of a Loan and/or Loan File shall obligate
the Servicer to return the original Loan and the related Loan File to the
Trustee when its need by the Servicer has ceased unless the Loan shall be
liquidated or repurchased or replaced as described in Section 3.06 or
Section 8.06.
Section 5.08. Costs and Expenses. Except as provided in Section 8.04 for
the reimbursement of Advances, all costs and expenses incurred by the Servicer
in carrying out its duties hereunder (including payment of the Trustee's fees
pursuant to Section 11.06, fees and expenses of accountants and payments of all
fees and expenses incurred in connection with the enforcement of Loans
(including enforcement of Loans and foreclosures upon real estate securing any
such Loans) and all other fees and expenses not expressly stated hereunder to be
for the account of the Trust) 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 Loan for customary
out-of-pocket 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 Loan.
Section 5.09. Maintenance of Insurance. The Servicer shall at all times
keep in force a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement, and a fidelity
bond. Such policy or policies and such fidelity bond shall be in such form and
amount as is generally customary among persons who service a portfolio of home
equity loans having an aggregate principal amount of $10,000,000 or more, and
which are generally regarded as servicers acceptable to institutional investors.
The Servicer shall cause to be maintained with respect to the real property
securing a Loan hazard insurance (excluding flood insurance coverage) if such
Loan is secured by a first priority mortgage, deed of trust or security deed or
the initial principal balance of such Loan exceeds $30,000.
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Section 5.10. Merger or Consolidation of Servicer. Any Person into which
the Servicer 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
Servicer shall be a party shall be the successor of the Servicer hereunder,
provided such Person shall be an Eligible Servicer, 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 Servicer shall promptly
notify each of the Rating Agencies in the event it is a party to any merger,
conversion or consolidation.
Article VI
REPORTS AND TAX MATTERS
Section 6.01. Monthly Reports. No later than one Business Day following
each Determination Date, the Servicer shall deliver to the Trustee and the
Rating Agencies a Monthly Report, substantially in the form of Exhibit M hereto.
Section 6.02. Officer's Certificate. Each Monthly Report pursuant to
Section 6.01 shall be accompanied by a certificate of a Servicing Officer
substantially in the form of Exhibit H, 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 or any of the
Rating Agencies, furnish the Trustee and/or any such Rating Agencies such
underlying data as may be reasonably requested.
Section 6.04. Annual Report of Accountants. On or before May 1 of each
year, commencing May 1, 2002, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to issue to the Servicer a report that such firm
has examined selected documents, records and management's assertions relating to
loans serviced by the Servicer and stating that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers, or any successor
uniform program, except for such significant exceptions or errors in records
that, in the opinion of such firm, generally accepted attestation standards
requires it to report.
Section 6.05. Statements to Certificateholders and the Class R
Certificateholder.
(a) The Servicer shall prepare and furnish to the Trustee the
statements specified below relating to the Class A, Class M, Class B, Class
C, Class P and Class R Certificates on or before the third Business Day
next preceding each Payment Date.
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(b) Concurrently with each distribution to Certificateholders, the
Trustee shall, so long as it has received the Monthly Report from the
Servicer, forward or cause to be forwarded by mail to each Holder of a
Class A, Class M, Class B, Class C, Class P and Class R 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
Certificates allocable to interest (including Unpaid Class
Interest Carry Forward Amount, Unpaid Class Basis Risk Carryover
Shortfall and Unpaid Class Realized Loss Interest Amount);
(ii) the amount of such distribution to Holders of each Class of
Certificates allocable to principal and to Unpaid Class Realized
Loss Amount;
(iii) the Class Interest Carry Forward Amount, Unpaid Class Interest
Carry Forward Amount (after giving effect to any payment to be
made in reduction thereof on such Payment Date), Class Basis Risk
Carryover Shortfall and Unpaid Class Basis Risk Carryover
Shortfall (after giving effect to any payment to be made in
reduction thereof on such Payment Date), if any, for each Class;
(iv) the Class Allocated Realized Loss Interest Amount, Unpaid Class
Realized Loss Interest Amount (after giving effect to any payment
to be made in reduction thereof on such Payment Date) and Unpaid
Class Realized Loss Amount (after giving effect to any payment to
be made in reduction thereof on such Payment Date), if any, for
each of the Class M-1, M-2, B-1 and B-2 Certificates;
(v) the Class A-1, the Class A-2, the Class A-3, the Class A-4, the
Class A-5, the Class M-1, the Class M-2, the Class B-1, the Class
B-2, and the Class P Principal Balances after giving effect to
the distribution of principal and any Class Allocated Realized
Loss Amount on such Payment Date;
(vi) the amount of the Monthly Servicing Fee with respect to the
immediately preceding Due Period;
(vii) the Class R-III Distribution Amount (if any);
(viii) the Pool Scheduled Principal Balance and the
Overcollateralization Amount for such Payment Date;
(ix) the number and aggregate Scheduled Principal Balances of the
Loans delinquent (a) 30-59 days, (b) 60-89 days, and (c) 90 or
more days;
(x) the number and aggregate Scheduled Principal Balance of the Loans
that became Defaulted Loans during the immediately preceding Due
Period;
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(xi) the number and aggregate Scheduled Principal Balance of the Loans
that were Defaulted Loans as of the last day of the immediately
preceding Due Period;
(xii) the number and aggregate Scheduled Principal Balance of the
Loans that became Liquidated Loans during the immediately
preceding Due Period and the related Net Liquidation Losses;
(xiii) the number and aggregate Scheduled Principal Balance of the
Loans (x) in foreclosure, (y) as to which foreclosure of the
related real property lien was completed during the related Due
Period, exclusive of any such Loans that are Liquidated Loans and
(z) foreclosed upon and in the Underlying Servicer's inventory;
and
(xiv) the amount of any distribution to Holders of the Class P
Certificate allocable to Prepayment Charges.
In the case of information furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount per $1,000
denomination of Security.
(c) Copies of all reports and statements provided to the Trustee for
the Certificateholders shall also be provided to the Rating Agencies and
the Class R Certificateholder.
Section 6.06. Payment of Taxes. The Servicer shall be responsible for and
agrees to prepare, make and timely 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 Trust
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 Trust by the Trustee. The Trustee shall have no responsibility whatsoever
for the accuracy or completeness of any such return, statement or document. The
Servicer agrees to indemnify the Trustee and hold it harmless for, from, against
and in respect to any and all liability, loss, damage and expense which may be
incurred by the Trustee based upon or as a result of the Trustee's execution of
any and all such tax returns, statements and documents. The Servicer, if and for
so long as it is a Class R Certificateholder, shall be designated the "tax
matters person" on behalf of the Trust 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 the Class R 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 Trust if, and during such time as, the
Servicer is not the holder of the Class R Certificate. The Servicer may, at its
expense, retain such outside assistance as it deems necessary in the performance
of its obligations under this paragraph. The Servicer shall provide to the
Internal Revenue Service the name, title, address and telephone number of the
person who will serve as the representative of the REMIC.
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Each of the Holders of the Certificates or the Class R Certificate, 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 Trust. The Servicer, as tax
matters person or as agent for the tax matters person, shall represent the Trust
in connection with all examinations of the Trust's affairs by tax authorities,
including resulting administrative and judicial proceedings. Each of the Holders
of the Certificates and the Class R Certificate, by acceptance thereof, agrees
to cooperate with the Servicer in such matters and to do or refrain from doing
any or all things reasonably required by the Servicer to conduct such
proceedings, provided that no such action shall be required by the Servicer of
any Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class R Certificateholder shall pay, on behalf of the Trust, 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
Trust 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, or a failure by
any Servicer to comply with the provisions of this Section 6.06, the Trustee,
the Originator or such Servicer, as the case may be, shall indemnify the Class R
Certificateholder for the payment of any such tax or charge. The Trustee shall
be entitled to withhold from amounts otherwise distributable to the Class R
Certificateholder any taxes or charges payable by the Class R Certificateholder
hereunder.
In the event the Class R 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 Originator shall provide to the Internal
Revenue Service and the persons specified in Sections 860(E)(e)(5) 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 the
Class R Certificate to such disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class R Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Originator shall, upon the written request of
persons designated in Section 860E(e)(5) of the Code, furnish to such requesting
party and the Internal Revenue Service information sufficient to compute the
present value of anticipated excess inclusions within 60 days of the receipt of
such written request.
Article VII
SERVICE TRANSFER
Section 7.01. Events of Termination. "Event of Termination" means the
occurrence of any of the following:
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(i) Any failure by the Servicer to make any payment or deposit required to
be made hereunder (including an Advance) and the continuance of such
failure for a period of four Business Days;
(ii) Failure on the Servicer's part to observe or perform in any material
respect any covenant or agreement in this Agreement (other than a
covenant or agreement which is elsewhere in this Section specifically
dealt with) which continues unremedied for 30 days;
(iii) Any assignment or delegation by the Servicer of its duties or rights
hereunder except as specifically permitted hereunder, or any attempt
to make such an assignment or delegation;
(iv) A court 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;
(v) 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;
(vi) The failure of the Servicer to be an Eligible Servicer; or
(vii) If Conseco Finance Corp. is the Servicer, Conseco Finance Corp.'s
servicing rights under its master seller-servicer agreement with GNMA
are terminated by GNMA.
Section 7.02. Transfer. If an Event of Termination has occurred and is
continuing, either the Trustee or Certificateholders, in the aggregate,
representing 25% or more of the Aggregate Certificate Principal Balance, by
notice in writing to the Servicer (and to the Trustee if given by the
Certificateholders) may terminate all (but not less than all) of the Servicer's
management, administrative, servicing and collection functions (such termination
being herein called a "Service Transfer"). On receipt of such notice (or, if
later, on a date designated therein), all authority and power of the Servicer
under this Agreement, whether with respect to the Loans, the Loan 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
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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, and to do any and all
acts or things necessary or appropriate to effect the purposes of such notice of
termination. The Trustee shall cause all assignments of mortgages, deeds of
trust or security deeds securing the Loans to be duly recorded. 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 Loans. The Servicer shall transfer to the new
servicer (i) the Servicer's records relating to the Loans in such electronic
form as the new servicer may reasonably request and (ii) any Loan 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, 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 Loans as it and such successor
shall agree; provided, however, that no such monthly compensation shall, without
the written consent of 100% of the Certificateholders, exceed the Monthly
Servicing Fee. 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 and Class R
Certificateholder.
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(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to S&P, to
Xxxxx'x, to the Certificateholders and to the Class R Certificateholder at
their respective addresses appearing on the Certificate Register.
(b) Within 10 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 S&P, to Xxxxx'x, to the Certificateholders
and to the Class R Certificateholder at their respective addresses
appearing on the Certificate Register.
Section 7.05. Effect of Transfer.
(a) After the Service Transfer, the Trustee or new Servicer shall
notify Obligors to make payments directly to the new Servicer that are due
under the Loans 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 Loans 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 Loans.
(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 3.07, 11.06
and 11.12(f)) other than those relating to the management, administration,
servicing or collection of the Loans after the Service Transfer.
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 a new account or accounts in trust for the Certificateholders and the
Class R Certificateholder conforming with the requirements of this Agreement at
the corporate trust department of the Trustee or with an institution other than
the Servicer and promptly cause the Trustee to transfer all funds in the
Certificate Account to such new account, which shall thereafter be deemed the
Certificate Account for the purposes hereof.
Article VIII
PAYMENTS
Section 8.01. Monthly Payments.
(a) Subject to the terms of this Article VIII, each Holder of a
Certificate or Class R Certificate as of a Record Date shall be paid on the
next succeeding Payment Date by check
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mailed to such Certificateholder or Class R Certificateholder at the
address for such Certificateholder or Class R Certificateholder appearing
on the Certificate Register (or, if such Certificateholder holds
Certificates of a Class with an aggregate Percentage Interest of at least
5% of such Class and so requests, by wire transfer pursuant to instructions
delivered to the Trustee at least 10 days prior to such Payment Date), the
sum equal to such Certificateholder's or Class R Certificateholder's
Percentage Interest of the Class A-1 Distribution Amount, the Class A-2
Distribution Amount, the Class A-3 Distribution Amount, the Class A-4
Distribution Amount, the Class A-5 Distribution Amount, the Class A-IO
Distribution Amount, the Class M-1 Distribution Amount, the Class M-2
Distribution Amount, the Class B-1 Distribution Amount, the Class B-2
Distribution Amount, the Class B-3I Distribution Amount, the Class P
Distribution Amount and the Class R-III Distribution Amount, as applicable.
Final payment of any Certificate or the Class R Certificate shall be made
only upon presentation and surrender of such Certificate or Class R
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 Seller nor the Originator 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 form of the Certificates as set forth in Exhibits A
through C hereto, the Class B-3I Certificate as set forth in Exhibit I
hereto and the Class R Certificate as set forth in Exhibit Q hereto.
(c) The Trustee shall either act as the paying agent or appoint an
Eligible Institution to be the paying agent (in either such case, the
"Paying Agent") to make the payments to the Certificateholders and the
Class R Certificateholder required hereunder. The Trustee's corporate trust
operations department, with an office at 000 Xxxx Xxxxx Xxxxxx, Xxxxx
Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxx-Xxxx, shall
initially act as Paying Agent. The Trustee shall require the Paying Agent
(if other than the Trustee) to agree in writing that all amounts held by
the Paying Agent for payment hereunder will be held in trust for the
benefit of the Certificateholders and the Class R Certificateholder 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 and the Class R Certificate.
Section 8.02. Advances.
(a) Not later than one Business Day following the Determination Date,
the Servicer shall advance all Delinquent Payments for the immediately
preceding Due Period by depositing the aggregate amount of such Delinquent
Payments in the Certificate Account; provided,
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however, that the Servicer shall be obligated to advance Delinquent
Payments only to the extent that the Servicer, in its sole discretion,
expects to be able to recover such Advances from funds subsequently
available therefor in the Certificate Account in accordance with Section
8.04(b). If the Servicer fails to advance all Delinquent Payments required
under this Section 8.02, the Trustee shall be obligated to advance such
Delinquent Payments pursuant to Section 11.15.
(b) The Servicer and the Trustee shall be entitled to reimbursement of
an Advance from subsequent funds available therefor in the Certificate
Account in accordance with Section 8.04(b).
Section 8.03. [Reserved].
Section 8.04. Permitted Withdrawals from the Certificate Account; Payments.
(a) The Trustee shall, 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 Loans for the
following purposes:
(i) to make payments in the amounts and in the manner provided for in
Section 8.04(b), (c), (d) and (e);
(ii) to pay to the Originator with respect to each Loan or property
acquired in respect thereof that has been repurchased or replaced
pursuant to Section 3.06, all amounts received thereon and not
required to be distributed to Certificateholders as of the date
on which the related Scheduled Principal Balance or Repurchase
Price is determined;
(iii) to reimburse the Servicer out of Liquidation Proceeds for
Liquidation Expenses incurred by it and not otherwise reimbursed,
to the extent such reimbursement is permitted pursuant to Section
5.08;
(iv) to withdraw any amount deposited in the Certificate Account that
was not required to be deposited therein; or
(v) to make any rebates or adjustments deemed necessary by the
Servicer pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clause (iii), the
Servicer's entitlement thereto is limited to collections or other
recoveries on the related Loan, the Servicer shall keep and maintain
separate accounting, on a Loan by Loan basis, for the purpose of justifying
any withdrawal from the Certificate Account pursuant to such clause.
(b) On each Payment Date, the Trustee shall make the following
deposits and distributions by 11:00 a.m. (New York time), to the extent of
the Interest Funds for such Payment Date and in the following order of
priority:
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(i) Servicing Fee and Trustee Fee. To pay the Monthly Servicing Fee
and any other compensation owed to the Servicer pursuant to
Section 5.08 and the Trustee Fee;
(ii) Reimbursement of Advances. After payment of the amounts specified
in clause (i) above, to reimburse the Servicer or the Trustee for
unreimbursed Advances
(A) at any time from that portion of the Amount Available
consisting of related Delinquent Payments or Net Liquidation
Proceeds, and
(B) as to any Advances that the Servicer or the Trustee has
determined are nonrecoverable from amounts to be derived in
respect of the related Loan, from any portion of the Amount
Available.
(iii) Cap Provider Fee. After payment of the amounts specified in
clauses (i) and (ii) above, for any Payment Date occurring in and
including September 2001 through and including February 2004, to
the LIBOR Cap Counterparty, the Cap Provider Fee;
(iv) Class A Interest. After payment of the amounts specified in
clauses (i) through (iii) above, to the Certificate Distribution
Account, the Class A Current Interest Amount and the Class A-IO
Current Interest Amount, to be distributed to the Class A and
Class A-IO Certificates concurrently (or, if the remaining
Interest Funds are not sufficient to pay such amounts in full,
the remaining Interest Funds shall be distributed pro rata among
the Class A Certificates and the Class A-IO Certificates based
upon the ratio of (x) the Class Current Interest Amount for each
such Class to (y) the aggregate of the Class Current Interest
Amount for all such Classes);
(v) Class M-1 Interest. After payment of the amounts specified in
clauses (i) through (iv) above, to the Certificate Distribution
Account, the Class M-1 Current Interest Amount, to be distributed
to the Class M-1 Certificates;
(vi) Class M-2 Interest. After payment of the amounts specified in
clauses (i) through (v) above, to the Certificate Distribution
Account, the Class M-2 Current Interest Amount, to be distributed
to the Class M-2 Certificates;
(vii) Class B-1 Interest. After payment of the amounts specified in
clauses (i) through (vi) above, to the Certificate Distribution
Account, the Class B-1 Current Interest Amount, to be distributed
to the Class B-1 Certificates;
(viii) Class B-2 Interest. After payment of the amounts specified in
clauses (i) through (vii) above, to the Certificate Distribution
Account, the Class B-2 Current Interest Amount, to be distributed
to the Class B-2 Certificates;
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(ix) Excess Cashflow. After payment of the amounts specified in
clauses (i) through (viii) above, any remaining Interest Funds
shall be treated as Excess Cashflow and distributed as described
in subsection (e) below.
(c) On each Payment Date prior to the Stepdown Date or on which a
Trigger Event is in effect, the Trustee shall make the following deposits
and distributions by 11:00 a.m. (New York time), to the extent of the
Principal Funds for such Payment Date and in the following order of
priority:
(i) Class A Principal. To the Class A Certificates in the following
order of priority:
(A) first, to the Class A-1 Certificates, until the Class A-1
Principal Balance has been reduced to zero;
(B) then, to the Class A-2 Certificates, until the Class A-2
Principal Balance has been reduced to zero;
(C) then, to the Class A-3 Certificates, until the Class A-3
Principal Balance has been reduced to zero;
(D) then, to the Class A-4 Certificates, until the Class A-4
Principal Balance has been reduced to zero;
(E) then, to the Class A-5 Certificates, until the Class A-5
Principal Balance has been reduced to zero;
(ii) Class M-1 Principal. After payment of the amounts specified in
clause (i) above, to the Class M-1 Certificates until the Class
M-1 Principal Balance has been reduced to zero;
(iii) Class M-2 Principal. After payment of the amounts specified in
clauses (i) through (ii) above, to the M-2 Certificates until the
Class M-2 Principal Balance has been reduced to zero;
(iv) Class B-1 Principal. After payment of the amounts specified in
clauses (i) through (iii) above, to the Class B-1 Certificates
until the Class B-1 Principal Balance has been reduced to zero;
(v) Class B-2 Principal. After payment of the amounts specified in
clauses (i) through (iv) above, to the Class B-2 Certificates
until the Class B-2 Principal Balance has been reduced to zero;
and
(vi) Excess Cashflow. After payment of the amounts specified in
clauses (i) through (v) above, the remaining Principal Funds
shall be treated as Excess Cashflow and distributed as specified
in subsection (e) below.
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(d) On each Payment Date on and after the Stepdown Date and so long as
a Trigger Event is not then in effect, the Trustee shall make the following
deposits and distributions by 11:00 a.m. (New York time), to the extent of
the Principal Funds for such Payment Date and in the following order of
priority:
(i) Class A Principal. To the Certificate Distribution Account, the
Class A Formula Principal Distribution Amount to be distributed
to the Class A Certificates in the following order of priority:
(A) first, to the Class A-1 Certificates, until the Class A-1
Principal Balance has been reduced to zero;
(B) then, to the Class A-2 Certificates, until the Class A-2
Principal Balance has been reduced to zero;
(C) then, to the Class A-3 Certificates, until the Class A-3
Principal Balance has been reduced to zero;
(D) then, to the Class A-4 Certificates, until the Class A-4
Principal Balance has been reduced to zero;
(E) then, to the Class A-5 Certificates, until the Class A-5
Principal Balance has been reduced to zero;
(ii) Class M-1 Principal. After payment of the amounts specified in
clause (i) above, to the Certificate Distribution Account, the
Class M-1 Formula Principal Distribution Amount to the Class M-1
Certificates until the Class M-1 Principal Balance has been
reduced to zero;
(iii) Class M-2 Principal. After payment of the amounts specified in
clauses (i) through (ii) above, to the Certificate Distribution
Account, the Class M-2 Formula Principal Distribution Amount to
the Class M-2 Certificates until the Class M-2 Principal Balance
has been reduced to zero;
(iv) Class B-1 Principal. After payment of the amounts specified in
clauses (i) through (iii) above, to the Certificate Distribution
Account, the Class B-1 Formula Principal Distribution Amount to
the Class B-1 Certificates until the Class B-1 Principal Balance
has been reduced to zero;
(v) Class B-2 Principal. After payment of the amounts specified in
clauses (i) through (iv) above, to the Certificate Distribution
Account, the Class B-2 Formula Principal Distribution Amount to
the Class B-2 Certificates until the Class B-2 Principal Balance
has been reduced to zero; and
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(vi) Excess Cashflow. After payment of the amounts specified in
clauses (i) through (v) above, the remaining Principal Funds
shall be treated as Excess Cashflow and distributed as specified
in subsection (e) below.
(e) Subject to Section 8.06(f) below, on each Payment Date, the
Trustee shall make the following deposits and distributions by 11:00 a.m.
(New York time), to the extent of the Excess Cashflow for such Payment Date
and in the following order of priority:
(i) Overcollateralization Increase Amount. To the Class A, Class M
and Class B Certificates, the Overcollateralization Increase
Amount in the order provided in Section 8.04(c) or 8.04(d), as
applicable;
(ii) Unpaid Class A Interest Carry Forward Amount. After payment of
the amount specified in clause (i) above, to the Certificate
Distribution Account, the Unpaid Class A Interest Carry Forward
Amount and the Unpaid Class A-IO Interest Carry Forward Amount,
to be distributed to the Class A and Class A-IO Certificates
concurrently in accordance with their respective Unpaid Class
Interest Carry Forward Amounts (or, if the remaining Excess
Cashflow is not sufficient to pay such amounts in full, the
remaining Excess Cashflow shall be distributed pro rata among the
Class A Certificates and the Class A-IO Certificates based upon
the ratio of (x) the Unpaid Class Interest Carry Forward Amount
for each such Class to (y) the aggregate of the Unpaid Class
Interest Carry Forward Amount for all such Classes);
(iii) Unpaid Class M-1 Interest Carry Forward Amount. After payment of
the amounts specified in clauses (i) and (ii) above, to the
Certificate Distribution Account, the Unpaid Class M-1 Interest
Carry Forward Amount, to be distributed to the Class M-1
Certificates;
(iv) Unpaid Class M-1 Realized Loss Interest Amount and Unpaid Class
M-1 Realized Loss Amount. After payment of the amounts specified
in clauses (i) through (iii) above, to the Certificate
Distribution Account, in the following order of priority (A) the
Unpaid Class M-1 Realized Loss Interest Amount and (B) the Unpaid
Class M-1 Realized Loss Amount, to be distributed to the Class
M-1 Certificates;
(v) Unpaid Class M-2 Interest Carry Forward Amount. After payment of
the amounts specified in clauses (i) through (iv) above, to the
Certificate Distribution Account, the Unpaid Class M-2 Interest
Carry Forward Amount, to be distributed to the Class M-2
Certificates;
(vi) Unpaid Class M-2 Realized Loss Interest Amount and Unpaid Class
M-2 Realized Loss Amount. After payment of the amounts specified
in clauses (i) through (v) above, to the Certificate Distribution
Account, in the following order of priority (A) the Unpaid Class
M-2 Realized Loss
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Interest Amount and (B) the Unpaid Class M-2 Realized Loss
Amount, to be distributed to the Class M-2 Certificates;
(vii) Unpaid Class B-1 Interest Carry Forward Amount. After payment of
the amounts specified in clauses (i) through (vi) above, to the
Certificate Distribution Account, the Unpaid Class B-1 Interest
Carry Forward Amount, to be distributed to the Class B-1
Certificates;
(viii) Unpaid Class B-1 Realized Loss Interest Amount and Unpaid Class
B-1 Realized Loss Amount. After payment of the amounts specified
in clauses (i) through (vii) above, to the Certificate
Distribution Account, in the following order of priority (A) the
Unpaid Class B-1 Realized Loss Interest Amount and (B) the Unpaid
Class B-1 Realized Loss Amount, to be distributed to the Class
B-1 Certificates;
(ix) Unpaid Class B-2 Interest Carry Forward Amount. After payment of
the amounts specified in clauses (i) through (viii) above, to the
Certificate Distribution Account, the Unpaid Class B-2 Interest
Carry Forward Amount, to be distributed to the Class B-2
Certificates;
(x) Unpaid Class B-2 Realized Loss Interest Amount and Unpaid Class
B-2 Realized Loss Amount. After payment of the amounts specified
in clauses (i) through (ix) above, to the Certificate
Distribution Account, in the following order of priority (A) the
Unpaid Class B-2 Realized Loss Interest Amount and (B) the Unpaid
Class B-2 Realized Loss Amount, to be distributed to the Class
B-2 Certificates;
(xi) Unpaid Basis Risk Carryover Shortfall. After payment of the
amounts specified in clauses (i) through (x) above, to the Basis
Risk Reserve Fund, the sum of all Unpaid Basis Risk Carryover
Shortfalls for the Class A, Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates after taking into account any amounts to
be applied to the payment thereof in accordance with Section 8.09
hereof;
(xii) Class B-3I Certificates. After payment of the amounts specified
in clauses (i) through (xi) above, to the Class B-3I
Certificateholders the Class B-3I Distribution Amount;
(xiii) Class P Certificate. After payment of the amounts specified in
clauses (i) through (xii) above, to the Class P Certificateholder
until the Class P Principal Balance is reduced to zero; and
(xiv) Class R-III Interest. After payment of the amounts specified in
clauses (i) through (xiii) above, to pay the remainder, if any,
of the Excess Cashflow
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(A) first, to the Class R Certificateholder, as reimbursement
for any taxes or charges paid by the Class R
Certificateholder pursuant to Section 6.06, and
(B) any remainder to the Class R Certificateholder in respect of
the Class R-III Interest.
If the Trustee shall not have received the applicable Monthly Report
by any Payment Date, the Trustee shall, in accordance with this Section
8.04, distribute all funds then in the Certificate Account to
Certificateholders, to the extent of such funds, on such Payment Date.
(f) For the Payment Dates in September 2001 and October 2001, all
Excess Cashflow shall be deposited in the Certificate Distribution Account
to be paid in respect of the Class R-III Interest to the Class R
Certificate for such Payment Date.
(g) On each Payment Date, the Trustee will pay to the Class P
Certificateholder, all Prepayment Charges included in the Certificate
Account for such Payment Date.
(h) 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-1, Class A-2, Class A-3, Class A-4 and Class A-5
Certificates until reduced to zero, then to the Class M-1, Class M-2 and
Class B-1 Certificates, in that order of priority.
Section 8.05. Reassignment of Repurchased and Replaced Loans. Upon receipt
by the Trust, by deposit in the Certificate Account, of the Repurchase Price
under Section 3.06(a), or upon receipt by the Trust of an Eligible Substitute
Loan under Section 3.06(b) and receipt by the Trust, by deposit in the
Certificate Account, of any additional amount under Section 3.06(b)(vi), and
upon receipt of a certificate of a Servicing Officer in the form attached hereto
as Exhibit J-1 or J-2, as applicable, the Trustee shall convey and assign to the
Originator all of the Certificateholders' right, title and interest in the
repurchased Loan or Replaced Loan 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. Upon such deposit of the Repurchase Price
or receipt of such Eligible Substitute Loan and related deposit of any
additional amount under Section 3.06(b)(vi), the Servicer shall be deemed to
have released any claims to such Loan as a result of Advances with respect to
such Loan.
Section 8.06. Class R Certificateholder's Purchase Option; Increase in
Class A-5 Interest Rate.
(a) The Class R Certificateholder shall, subject to subsection (b)
hereof, have the option to purchase all of the Loans and all property
acquired in respect of any Loan remaining in the Trust at a price (such
price being referred to as the "Minimum Purchase Price") equal to the
greater of:
(i) the sum of
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(x) 100% of the principal balance of each Loan (other than any
Loan as to which title to the underlying property has been
acquired and whose fair market value is included pursuant to
clause (y) below), together with accrued and unpaid interest
on each such Loan at a rate per annum equal to the Weighted
Average Pass-Through Rate, plus
(y) the fair market value of such acquired property (as
reasonably determined by the Servicer as of the close of
business on the third Business Day preceding the date of
such purchase), and
(ii) the Aggregate Certificate Principal Balance as of the date of
such purchase (less any amounts on deposit in the Certificate
Account on such purchase date and representing payments of
principal in respect of the Loans) plus an amount necessary to
pay the Class A Current Interest Amount, any Unpaid Class A
Interest Carry Forward Amount, any Unpaid Class A Basis Risk
Carryover Shortfall, the Class A-IO Current Interest Amount, any
Unpaid Class A-IO Current Interest Carry Forward Amount, the
Class M-1 Current Interest Amount, any Unpaid Class M-1 Interest
Carry Forward Amount, any Class M-1 Realized Loss Interest
Amount, any Class M-1 Realized Loss Amount, any Unpaid Class M-1
Basis Risk Carryover Shortfall, the Class M-2 Current Interest
Amount, any Unpaid Class M-2 Interest Carry Forward Amount, any
Class M-2 Realized Loss Interest Amount, any Class M-2 Realized
Loss Amount, any Unpaid Class M-2 Basis Risk Carryover Shortfall,
the Class B-1 Current Interest Amount, any Unpaid Class B-1
Interest Carry Forward Amount, any Class B-1 Realized Loss
Interest Amount, any Class B-1 Realized Loss Amount, any Unpaid
Class B-1 Basis Risk Carryover Shortfall, the Class B-2 Current
Interest Amount, any Unpaid Class B-2 Interest Carry Forward
Amount, any Class B-2 Realized Loss Interest Amount, any Class
B-2 Realized Loss Amount, any Unpaid Class B-2 Basis Risk
Carryover Shortfall and the Class B-3I Distribution Amount due on
the Payment Date occurring in the calendar month following such
purchase date (less any amounts on deposit in the Certificate
Account on such purchase date and representing payments of
interest in respect of the Loans at a rate per annum equal to the
Weighted Average Pass-Through Rate).
(b) The purchase by the Class R Certificateholder of all of the Loans
pursuant to this Section 8.06 shall be conditioned upon:
(i) the Pool Scheduled Principal Balance, at the time of any such
purchase, aggregating not more than 10% of the Cut-off Date Pool
Principal Balance plus amounts deposited in the Pre-Funding
Account on the Closing Date, if any,
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(ii) such purchase being made pursuant to a plan of complete
liquidation in accordance with Section 860F of the Code, as
provided in Section 12.04,
(iii) the Class R Certificateholder having provided the Trustee and
the Depository (if any) with at least 30 days' written notice,
and
(iv) the Trustee not having accepted a qualifying bid for the Loans
pursuant to subsection (e) below.
If such option is exercised, the Class R Certificateholder shall provide to
the Trustee (at the Class R Certificateholder's expense) the certification
required by Section 12.04, which certificate shall constitute a plan of
complete liquidation within the meaning of Section 860F of the Code, and
the Trustee shall promptly sign such certification and release to the Class
R Certificateholder the Loan Files pertaining to the Loans being purchased.
(c) If the Class R Certificateholder has not delivered to the Trustee
the notice of exercise of its purchase option required by subsection (b) by
the Payment Date occurring in the month following the Determination Date
relating to the first Due Period which includes the date on which the Pool
Scheduled Principal Balance first becomes less than 10% of the Cut-off Date
Pool Principal Balance, then on the following Payment Date and each Payment
Date thereafter that portion of the Class A-5 Interest Rate described in
clause (a) of the definition thereof will increase to 7.29%.
Section 8.07. Intermediate REMIC and Subsidiary REMIC Distributions.
(a) On each Payment Date, the Uncertificated Intermediate Interests
shall receive distributions, to the extent of the Amount Available, in the
following order of priority:
(i) to each Class of Uncertificated Intermediate Interests, pro rata
based on its respective entitlement, accrued interest as follows:
(A) for such Class other than the Class I-AIO Interest, 1/12th
of the Adjusted Net WAC Cap Rate times the Intermediate
Interest Principal Balance of such Class; provided that
interest accrued on the Class I-Accrual Interest shall be
paid as principal to the Intermediate REMIC Accretion
Directed Interests pursuant to Section 8.07(a)(ii), and
added to the Intermediate Interest Principal Balance of the
Class I-Accrual Interest, in an amount equal to the sum of
(x) one-half the Overcollateralization Increase Amount for
that Payment Date plus (y) any amount by which one-half the
aggregate of the Overcollateralization Increase Amount on
prior Payment Dates exceeds the aggregate amount so paid to
the Intermediate REMIC Accretion Directed Interests and
added to the Class I-Accrual Interest (such excess not to
accrue interest);
(B) for the Class I-AIO Interest, interest equal to the sum of:
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(1) with respect to the Class I-AIO(1) Interest, interest
at a rate of: (A) 0.25% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(1)
Interest from and including the Closing Date through
and including the August 2002 Payment Date, and (B)
0.0% thereafter;
(2) with respect to the Class I-AIO(2) Interest, interest
at a rate of (A) 0.25% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(2)
Interest from and including the Closing Date through
and including the August 2002 Payment Date and (B) 0.0%
thereafter;
(3) with respect to the Class I-AIO(3) Interest, interest
at a rate of (A) 0.25% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(3)
Interest from and including the Closing Date through
and including the August 2002 Payment Date, and (B)
0.0% thereafter;
(4) with respect to the Class I-AIO(4) Interest, interest
at a rate of (A) 0.25% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(4)
Interest from and including the Closing Date through
and including the July 2002 Payment Date, and (B) 0.0%
thereafter;
(5) with respect to the Class I-AIO(5) Interest, interest
at a rate of (A) 10.75% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(1)
Interest from and including the Closing Date through
and including the January 2004 Payment Date, and (B)
0.0% thereafter;
(6) with respect to the Class I-AIO(6) Interest, interest
at a rate of (A) 10.75% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(2)
Interest from and including the Closing Date through
and including the July 2003 Payment Date, and (B) 0.0%
thereafter;
(7) with respect to the Class I-AIO(7) Interest, interest
at a rate of (A) 10.75% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(3)
Interest from and including the Closing Date through
and including the January 2003 Payment Date, and (B)
0.0% thereafter;
(8) with respect to the Class I-AIO(8) Interest, interest
at a rate of (A) 10.75% per annum on the Subsidiary
Interest Adjusted Principal Balance of the Class S-2(4)
Interest
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from and including the Closing Date through and
including the July 2002 Payment Date, and (B) 0.0%
thereafter; and
(C) any Unpaid Intermediate Interest Shortfall with respect to
such Class;
(ii) To the Class I-Accrual Interest, principal in an amount equal to
one-half the principal distributed on the Class A, Class M and
Class B Certificates on such Payment Date; and to each
Intermediate REMIC Accretion Directed Interest, principal
(including that payable to the Intermediate REMIC Accretion
Directed Interests as described in Section 8.07(a)(i)(A) in an
amount equal to one-half the principal distributed to its
Corresponding Certificate Class on such Payment Date. Realized
losses shall be allocated to each Class of Uncertificated
Intermediate Interests in an amount sufficient to reduce the
Intermediate REMIC Principal Balance of
(A) the Class I-Accrual Interest to one-half the sum of (1) the
Pool Scheduled Principal Balance, (2) the Pre-Funded Amount
and (3) the Overcollateralization Amount and
(B) each Class of Intermediate REMIC Accretion Directed
Interests to one-half the Class Principal Balance of its
Corresponding Certificate Class after giving effect to
distributions on such Payment Date; and
(iii) To the holder of the Class R-II Interest, any remaining Amount
Available.
(b) On each Payment Date, the Uncertificated Subsidiary Interests
shall receive distributions, to the extent of the Amount Available, in the
following order of priority:
(i) Payment of the Trustee Fee, the Servicing Fee and the Cap
Provider Fee, in the amounts specified in Sections 8.04(b)(i) and
8.04(b)(iii);
(ii) Each of the Class S-1 and Class S-2 Interests shall receive
distributions of interest, pro rata based on their respective
entitlements, in an amount equal to (i) 1/12 of the Net WAC Cap
Rate times the Subsidiary Interest Principal Balance of such
Class, plus (ii) any Unpaid Subsidiary Interest Shortfall with
respect to such Class;
(iii) Distributions of principal shall be made to each Class S-1 and
Class S-2 Interest sequentially, i.e., first to the Class S-1
Interest, second to the Class S-2(1) Interest and last (after
each other Class S-2 Interest) to the Class S-2(4) Interest, up
to an amount equal to its respective Subsidiary Interest
Principal Balance;
(iv) Any remaining Amount Available shall be distributed to the holder
of the Class R-I Interest; and
(v) all Prepayment Charges shall be paid to the Class P
Certificateholder.
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Section 8.08. 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, and shall deposit therein the amount received from the Seller
pursuant to Section 2.02(l). The Pre-Funding Account shall be entitled
"Pre-Funding Account, U.S. Bank Trust National Association as Trustee for
the benefit of holders of Home Equity Loan Certificates, Series 2001-C."
Funds deposited in the Pre-Funding Account shall be held in trust by the
Trustee for the Holders of the Certificates and the Class R Certificate for
the uses and purposes set forth herein.
(b) On or before the Closing Date the Originator shall deposit in the
Pre-Funding Account the amount specified in Section 2.02(l). Amounts on
deposit in such account shall be withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw from
the Pre-Funding Account an amount equal to 100% of the Cut-off
Date Principal Balance of each Subsequent Loan transferred and
assigned to the Trustee on such Subsequent Transfer Date and pay
such amount to or upon the order of the Originator 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
Payment Date, the Trustee shall deposit into the Certificate
Account any amounts remaining in the Pre-Funding Account, net of
investment earnings.
(c) The Pre-Funding Account shall be part of the Trust but not part of
any REMIC. The Trustee on behalf of the Trust shall be the legal owner of
the Pre-Funding Account. The Seller shall be the beneficial owner of the
Pre-Funding Account, subject to the foregoing power of the Trustee to
transfer amounts in the Pre-Funding Account to the Certificate Account.
Funds in the Pre-Funding Account shall, at the direction of the Servicer,
be invested in Eligible Investments of the kind described in clauses (i)
and (ii)(A) of the definition of "Eligible Investments" 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 first Payment Date after the end of the
Pre-Funding Period.
Section 8.09. Yield Maintenance Reserve Fund.
(a) On or before the Closing Date, the Trustee shall establish the
Yield Maintenance Reserve Fund on behalf of the Trust, which must be an
Eligible Account, and shall deposit therein any Reserve Fund Addition
received from the LIBOR Cap Counterparty pursuant to the Yield Maintenance
Agreements. The Yield Maintenance Reserve Fund shall be entitled "Yield
Maintenance Reserve Fund, U.S. Bank Trust National Association as Trustee
for the benefit of holders of Home Equity Loan Certificates, Series
2001-C." On any Payment Date the Trustee shall pay directly the following
amounts in the order of priority indicated:
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(i) Unpaid Class A-1 Basis Risk Carryover Shortfall. To the Class A-1
Certificates, the Unpaid Class A-1 Basis Risk Carryover
Shortfall;
(ii) Unpaid Class M-1 Basis Risk Carryover Shortfall. After payment of
the amount specified in clause (i) above, to the Class M-1
Certificates, the Unpaid Class M-1 Basis Risk Carryover
Shortfall;
(iii) Unpaid Class M-2 Basis Risk Carryover Shortfall. After payment
of the amounts specified in clauses (i) and (ii) above, to the
Class M-2 Certificates, the Unpaid Class M-2 Basis Risk Carryover
Shortfall;
(iv) Unpaid Class B-1 Basis Risk Carryover Shortfall. After payment of
the amounts specified in clauses (i) through (iii) above, to the
Class B-1 Certificates, the Unpaid Class B-1 Basis Risk Carryover
Shortfall;
(v) Unpaid Class B-2 Basis Risk Carryover Shortfall. After payment of
the amounts specified in clauses (i) through (iv) above, to the
Class B-2 Certificates, the Unpaid Class B-2 Basis Risk Carryover
Shortfall; and
(vi) Payment of Remainder. After payment of the amounts specified in
clauses (i) through (v) above, any remainder to Green Tree
Finance Corp.--Two.
(b) The Yield Maintenance Reserve Fund is an outside reserve fund and
shall be part of the Trust but not part of any REMIC. The Trustee on behalf
of the Trust shall be the nominal owner of the Yield Maintenance Reserve
Fund. The Holder of the Class B-3I Certificate shall be the beneficial
owner of the Yield Maintenance Reserve Fund, subject to the power of the
Trustee to transfer amounts under Section 8.09(a). For all Federal tax
purposes, all amounts transferred by a REMIC to the Yield Maintenance
Reserve Fund pursuant to Section 8.04(b)(iii) shall be treated as amounts
distributed by a REMIC to the Holder of the Class B-3I Certificate or its
transferee. Funds in the Yield Maintenance Reserve Fund shall, at the
direction of the Seller, be invested in Eligible Investments that mature no
later than the Business Day prior to the next succeeding Payment Date. All
net income and gain from such investments shall be distributed to the
Seller on such Payment Date. All amounts earned on amounts on deposit in
the Yield Maintenance Reserve Fund shall be taxable to the Seller. Any
losses on such investments shall be deposited in the Yield Maintenance
Reserve Fund by the Seller out of its own funds immediately as realized.
Section 8.10. Basis Risk Reserve Fund.
(a) On or before the Closing Date, the Trustee shall establish the
Basis Risk Reserve Fund on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein on each Payment Date any amount pursuant
to Section 8.04(e)(xi) or Section 12.04(c)(i)(F), as applicable. The Basis
Risk Reserve Fund shall be entitled "Basis Risk Reserve Fund, U.S. Bank
Trust National Association as Trustee for the benefit of holders of Home
Equity Loan Certificates, Series 2001-C." On any Payment Date the Trustee
shall pay the following amounts in the order of priority indicated:
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(i) Unpaid Class A Basis Risk Carryover Shortfall. To the Class A-1,
Class A-2, Class A-3, Class A-4 and Class A-5 Certificates,
concurrently, the respective Unpaid Class A Basis Risk Carryover
Shortfall for each such Class, and, if the amount available
therefor is not sufficient to pay the full amount of Unpaid Class
A Basis Risk Carryover Shortfall, then to each Class of Class
A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates
pro rata based upon the respective Unpaid Class A Basis Risk
Carryover Shortfall for each such Class;
(ii) Unpaid Class M-1 Basis Risk Carryover Shortfall. After payment of
the amount specified in clause (i) above, to the Class M-1
Certificates, the Unpaid Class M-1 Basis Risk Carryover
Shortfall;
(iii) Unpaid Class M-2 Basis Risk Carryover Shortfall. After payment
of the amounts specified in clauses (i) and (ii) above, to the
Class M-2 Certificates, the Unpaid Class M-2 Basis Risk Carryover
Shortfall;
(iv) Unpaid Class B-1 Basis Risk Carryover Shortfall. After payment of
the amounts specified in clauses (i) through (iii) above, to the
Class B-1 Certificates, the Unpaid Class B-1 Basis Risk Carryover
Shortfall;
(v) Unpaid Class B-2 Basis Risk Carryover Shortfall. After payment of
the amounts specified in clauses (i) through (iv) above, to the
Class B-2 Certificates, the Unpaid Class B-2 Basis Risk Carryover
Shortfall; and
(vi) Payment of Remainder. After payment of the amounts specified in
clauses (i) through (v) above, any remainder to Green Tree
Finance Corp.--Two.
(b) The Basis Risk Reserve Fund is an outside reserve fund and shall
be part of the Trust but not part of any REMIC. The Trustee on behalf of
the Trust shall be the nominal owner of the Basis Risk Reserve Fund. The
Holder of the Class B-3I Certificate shall be the beneficial owner of the
Basis Risk Reserve Fund, subject to the power of the Trustee to transfer
amounts under Section 8.10(a). For all Federal tax purposes, all amounts
transferred by a REMIC to the Basis Risk Reserve Fund pursuant to Section
8.04(e)(xi) shall be treated as amounts distributed by a REMIC to the
Holder of the Class B-3I Certificate or its transferee. Funds in the Basis
Risk Reserve Fund shall, at the direction of the Seller, be invested in
Eligible Investments that mature no later than the Business Day prior to
the next succeeding Payment Date. All net income and gain from such
investments shall be distributed to the Seller on such Payment Date. All
amounts earned on amounts on deposit in the Basis Risk Reserve Fund shall
be taxable to the Seller. Any losses on such investments shall be deposited
in the Basis Risk Reserve Fund by the Seller out of its own funds
immediately as realized.
Section 8.11. Allocation of Realized Loss Amounts. On each Payment Date,
the Trustee shall allocate any Realized Loss Amounts for such Payment Date as
follows:
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(a) to the Class B-2 Certificates up to an amount equal to the Class
B-2 Principal Balance (after giving effect to all distributions of
principal on the Class B-2 Certificates on such Payment Date);
(b) any remainder, after allocation pursuant to clause (a) above, to
the Class B-1 Certificates up to an amount equal to the Class B-1 Principal
Balance (after giving effect to all distributions of principal on the Class
B-1 Certificates on such Payment Date);
(c) any remainder, after allocation pursuant to clauses (a) and (b)
above, to the Class M-2 Certificates up to an amount equal to the Class M-2
Principal Balance (after giving effect to all distributions of principal on
the Class M-2 Certificates on such Payment Date); and
(d) any remainder, after allocation pursuant to clauses (a), (b) and
(c) above, to the Class M-1 Certificates up to an amount equal to the Class
M-1 Principal Balance (after giving effect to all distributions of
principal on the Class M-1 Certificates on such Payment Date).
Article IX
THE CERTIFICATES AND THE CLASS R CERTIFICATE
Section 9.01. The Certificates and the Class R Certificate. The Class A,
Class M, Class B, Class B-3I and Class R Certificates shall be substantially in
the forms set forth in Exhibits A, B, C, I, and Q, as applicable, 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 evidencing
$223,734,000 in Original Class A-1 Principal Balance, (ii) one or more Class A-2
Certificates evidencing $55,246,000 in Original Class A-2 Principal Balance,
(iii) one or more Class A-3 Certificates evidencing $84,857,000 in Original
Class A-3 Principal Balance, (iv) one or more Class A-4 Certificates evidencing
$89,015,000 in Original Class A-4 Principal Balance, (v) one or more Class A-5
Certificates evidencing $39,148,000 in Original Class A-5 Principal Balance,
(vi) one or more Class A-IO Certificates evidencing $130,000,000 in Original
Class A-IO Notional Amount, (vii) one or more Class M-1 Certificates evidencing
$45,000,000 in Original Class M-1 Principal Balance, (viii) one or more Class
M-2 Certificates evidencing $33,000,000 in Original Class M-2 Principal Balance,
(ix) one or more Class B-1 Certificates evidencing $19,500,000 in Original Class
B-1 Principal Balance (x) one or more Class B-2 Certificates evidencing
$10,500,000 in Original Class B-2 Principal Balance, and (xi) one Class B-3I
Certificate evidencing the entire Class B-3I Notional Amount, beneficial
ownership of such Classes of Certificates (other than the Class B-3I and Class P
Certificate) to be held through Book-Entry Certificates in minimum dollar
denominations of $25,000 and integral multiples of $1.00 in excess thereof. The
Class B-3I Certificate shall each be evidenced by a single certificate issued on
the Closing Date to the Originator. The Class P Certificate shall be an
Uncertificated interest, the owner of which will be the Class P
Certificateholder. The Class R-I, Class R-II and Class R-III Interests shall be
evidenced by a single Class R Certificate, issued on the Closing Date to Green
Tree Finance Corp.--Two and shall represent 100% of the Percentage Interest of
the Class R Certificate, respectively.
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The Certificates (other than the Class P Certificate) and the Class R
Certificate shall be executed by manual signature on behalf of the Trustee by a
duly authorized Responsible Officer or authorized signatory. Certificates or the
Class R Certificate 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 Class R Certificate, or did not
hold such offices at the date of such Certificates or Class R Certificate. No
Certificate (other than the Class P Certificate) or Class R Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless such Certificate or Class R Certificate has been executed by manual
signature in accordance with this Section, and such signature upon any
Certificate or Class R Certificate shall be conclusive evidence, and the only
evidence, that such Certificates or Class R Certificate has been duly executed
and delivered hereunder. All Certificates and the Class R Certificate shall be
dated the date of their execution, except for those Certificates and the Class R
Certificate executed on the Closing Date, which shall be dated the Closing Date.
Section 9.02. Registration of Transfer and Exchange of Certificates and the
Class R Certificate.
(a) The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.03 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and the Class R
Certificate and of transfers and exchanges of Certificates and the Class R
Certificate as herein provided. The Trustee initially appoints itself to be
the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and the Class R Certificate and transfers and
exchanges of Certificates and the Class R Certificate as provided herein.
The Trustee will give prompt written notice to Certificateholders, the
Class R Certificateholder and the Servicer of any change in the Certificate
Registrar.
(b)
(i) Subject to clauses (ii) and (iii) below, no transfer of Class R
Certificate shall be made by the Seller or any other Person
unless such transfer is exempt from the registration requirements
of the Securities Act of 1933 (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 K
attached hereto, which
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investment letter shall not be an expense of the Trustee or
the Originator. The Class R 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.
(ii) No transfer of a Class B-3I or Class R Certificate or any
interest therein shall be made to any employee benefit plan that
is subject to ERISA, or that is described in Section 4975(e)(1)
of the Code or to any person or entity purchasing on behalf of,
or with assets of, such an employee benefit plan (each, a
"Plan"), unless the Plan delivers to the Originator and the
Trustee, an Opinion of Counsel in form satisfactory to the
Originator and the Trustee that the purchase and holding of such
Class B-3I Certificate or Class R Certificate by such Plan will
not result in the assets of the Trust being deemed to be "plan
assets" and subject to the prohibited transaction provisions of
ERISA and the Code and will not subject the Trustee, the
Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in this Agreement.
Unless such opinion is delivered and in the case of Definitive
Certificates, each person acquiring such a Certificate or Class R
Certificate will be deemed to represent to the Trustee, the
Originator, the Seller and the Servicer either
(A) that such person is neither a Plan, nor acting on behalf of
a Plan, subject to ERISA or to Section 4975 of the Code, or
(B) that the purchase and holding of the Class B-3I Certificate
or Class R Certificate by such Plan will not result in the
assets of the Trust being deemed to be Plan assets and
subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the
Originator or the Servicer to any obligation or liability in
addition to those undertaken in this Agreement.
(iii) Notwithstanding anything to the contrary contained herein,
(A) no Class B-3I or Class R Certificate, nor any interest
therein, shall be transferred, sold or otherwise disposed of
to a "disqualified organization," within the meaning of
Section 860E(e)(5) of the Code (a "Disqualified
Organization"), including, but not limited to,
(1) 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,
(2) an organization (other than a cooperative described in
Section 521 of the Code) which is exempt from the taxes
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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
(3) 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 a Class B-3I or Class R 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 to 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
non-economic 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 B-3I or
Class R Certificate, as applicable, by any Disqualified
Organization will not result in the imposition of federal
income tax upon the Trust or any Class B-3I
Certificateholder or Class R Certificateholder or any other
person or otherwise adversely affect the status of the Trust
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 a Class B-3I or Class R 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 not to be a Class
B-3I or Class R Certificateholder, as applicable, for any
purpose hereunder, including, but not limited to, the
receipt of distributions on such Class B-3I or Class R
Certificate, and shall be deemed to have no interest
whatsoever in such Class B-3I or Class R Certificate. Each
Class B-3I or Class R Certificateholder, by his acceptance
thereof, shall be deemed for all purposes to have consented
to the provisions of this Section 9.02(b)(3).
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(iv) 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 not to be the Class B-3I Certificateholder or
Class R Certificateholder, as applicable, for any purpose
hereunder, including, but not limited to, the receipt of
distributions on the Class B-3I Certificate or Class R
Certificate, and shall be deemed to have no interest whatsoever
in the Class B-3I Certificate or Class R Certificate.
(v) The Trustee shall give notice to the Rating Agencies promptly
following any transfer, sale or other disposition of a Class B-3I
or Class R Certificate.
(c) At the option of a Certificateholder (other than the Class P
Certificateholder) or a Class R Certificateholder, Certificates (other than
the Class P Certificate) and the Class R Certificate may be exchanged for
other Certificates or Class R Certificate of authorized denominations of a
like aggregate original denomination, upon surrender of such Certificates
or the Class R Certificate to be exchanged at the Corporate Trust Office.
Whenever any Certificates or the Class R Certificate are so surrendered for
exchange, the Trustee shall execute and deliver the Certificates or Class R
Certificate which the Certificateholder or Class R Certificateholder making
the exchange is entitled to receive. Every Certificate or Class R
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 such 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 Certificates;
(iii) ownership and transfers of registration of such 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 such Certificates for purposes of
exercising the rights of Holders under
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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)
(i) the Seller or the Depository advises the Trustee in writing
that the Depository is no longer willing or able properly to
discharge its responsibilities as Depository, and
(ii) the Trustee or the Originator is unable to locate a
qualified successor,
(y) 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 Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same.
Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither
the Originator nor the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates
all references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee,
to the extent applicable with respect to such Definitive Certificates and
the Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(f) On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1 Certificate, one Class A-2 Certificate, one Class
A-3 Certificate, one Class A-4 Certificate, one Class A-5 Certificate, one
Class A-IO Certificate, one Class M-1 Certificate, one Class M-2
Certificate, one Class B-1 Certificate and one Class B-2 Certificates, each
in registered form registered in the name of the Depository's nominee, Cede
& Co., the total face
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amount of which represents 100% of the Original Class Principal Balance of
each Class, respectively. Each such 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 the
Trustee or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or 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."
(g) Each of the Certificates (other than the Class P Certificates) and
the Class R Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(8) of the Uniform Commercial Code and shall be governed
by such Article 8 as in effect in the State of Minnesota from time to time.
(h) Each of the Class A-1, Class M-1, Class M-2 and Class B-1
Certificates, as beneficiaries of the Yield Maintenance Agreements, may be
sold under the Exemption only to a Qualified Plan Investor.
(i) The Class P Certificate shall be nontransferable.
Section 9.03. No Charge; Disposition of Void Certificates or Class R
Certificate. No service charge shall be made to a Certificateholder or Class R
Certificateholder for any transfer or exchange of a Certificate or a Class R
Certificate, 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 a Certificate or a Class R
Certificate. All Certificates and Class R Certificate 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 or Class R
Certificate. If
(i) any mutilated Certificate or Class R 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 or Class R Certificate, and
(ii) 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 or Class R
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 or
Class R
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Certificate, a new Certificate or Class R Certificate of like
tenor and original denomination.
Upon the issuance of any new Certificate or Class R Certificate under this
Section 9.04, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses connected therewith. Any duplicate Certificate or Class R
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 or
Class R Certificate shall be found at any time.
Section 9.05. Persons Deemed Owners. Prior to due presentation of a
Certificate or Class R 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 or Class R Certificate is
registered as the owner of such Certificate or Class R 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' and Class R
Certificateholder's 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 and the Class R Certificateholder as of the most
recent Record Date. If Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance apply in writing to
the Trustee (hereinafter referred to as "Applicants"), and such application
states that the Applicants desire to communicate with other Certificateholders
or the Class R Certificateholder with respect to their rights under this
Agreement or under the Certificates or the Class R Certificate 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 and the Class R Certificateholder
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 and the Class R Certificateholder, by receiving and holding a
Certificate or a Class R 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 or the Class
R Certificateholder hereunder, regardless of the source from which such
information was derived.
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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 or the Class R
Certificate. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class R Certificate by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class R Certificate "by the Trustee."
Article X
INDEMNITIES
Section 10.01. Real Estate. The Seller and Originator will jointly and
severally defend and indemnify the Trust, the Trustee (including the Custodian
and any other agents of the Trustee) and the Certificateholders and the Class R
Certificateholder 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 the use or ownership of any real
estate related to a Loan 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 Loans is intended to be assumed by the Trust, the
Certificateholders or the Class R Certificateholder 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, the
Certificateholders and the Class R Certificateholder 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 and any other agents of the Trustee), the Certificateholders and the
Class R Certificateholders from, any taxes which may at any time be asserted
with respect to, and as of the date of, the transfer of the Loans 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 and the Class R Certificate) 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,
a Class R Certificateholder or otherwise.
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Section 10.04. Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian and any other agents
of the Trustee), the Certificateholders and the Class R Certificateholder
against any and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation, in
respect of any action taken or omitted to be taken by the Servicer with respect
to any Loan. 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 Loan.
Section 10.05. Operation of Indemnities. Indemnification under this Article
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Originator or the Servicer has made any indemnity
payments to the Trustee pursuant to this Article and the Trustee thereafter
collects any of such amounts from others, the Trust will repay such amounts
collected to the Originator or the Servicer, as the case may be, without
interest.
Section 10.06. REMIC Tax Matters. If a Class R Certificateholder, pursuant
to Section 6.06, pays any taxes or charges imposed upon the Master REMIC,
Intermediate REMIC or Subsidiary REMIC, as the case may be, 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 R Certificateholder shall be
entitled to be reimbursed therefor out of the Certificate Account as provided in
Section 8.04; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class R Certificateholder be
entitled to reimbursement therefor out of the Certificate Account, if and to the
extent that such taxes or charges resulted from a failure (i) by the Originator,
the Trustee or any Servicer to comply with the provisions of Section 2.05, (ii)
by any Servicer to comply with the provisions of Section 6.06, or (iii) by the
Trustee to execute any tax returns pursuant to Section 11.11.
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 to the requirements of this Agreement.
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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 representing, in
the aggregate, 25% or more of the Aggregate Certificate Principal Balance
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 event from the Servicer or the
Certificateholders representing, in the aggregate, 25% or more of the
Aggregate Certificate Principal Balance.
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
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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 the Trustee 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 Certificateholders
representing, in the aggregate, 25% or more of the Aggregate Certificate
Principal Balance; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition
to so proceeding. The reasonable expense of every such examination shall be
paid by the Servicer or, if paid by the Trustee, shall be reimbursed by the
Servicer upon demand; 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.
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Section 11.03. Trustee Not Liable for Certificates, Class R Certificate or
Loans. The Trustee assumes no responsibility for the correctness of the recitals
contained herein, in the Certificates or in the Class R Certificate (other than
the Trustee's execution thereof). The Trustee makes no representations as to the
validity or sufficiency of this Agreement, of the Certificates or of the Class R
Certificate (other than its execution thereof) or of any Loan, Loan 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
Loans to the Trust by the Originator and the Seller or deposited in or withdrawn
from the Certificate Account by the Servicer.
Section 11.04. Trustee May Own Certificates. The Trustee in its individual
or other capacity may become the owner or pledgee of Certificates representing
less than all the beneficial interest in the Trust with the same rights as it
would have if it were not Trustee.
Section 11.05. Rights of Certificateholders to Direct Trustee and to Waive
Events of Termination. Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance 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. Holders of the Certificates
representing, in the aggregate, 51% or more of the Aggregate Certificate
Principal Balance may on behalf of all Certificateholders waive any past Event
of Termination hereunder and its consequences, except a default in respect of a
covenant or provision hereof which under Section 12.08 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.
Section 11.06. The Servicer to Pay Trustee's Fees and Expenses. The
Servicer agrees:
(i) 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);
(ii) 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
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reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith;
and
(iii) 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 the 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.
The covenants in this Section 11.06 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 11.07. 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 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 11.07, 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
(or, if the Trustee is U.S. Bank National Association, the parent company of
U.S. Bank Trust National Association) shall at all times have
(i) a long-term deposit rating from S&P of at least BBB or as shall
be otherwise acceptable to S&P, and
(ii) have a long-term deposit rating from Xxxxx'x of at least Baa2 or
as shall be otherwise acceptable to Xxxxx'x.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 11.07, the Trustee shall resign immediately
in the manner and with the effect specified in Section 11.08.
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Section 11.08. 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. 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 11.07 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 11.08 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.09.
Section 11.09. Successor Trustee. Any successor Trustee appointed as
provided in Section 11.08 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 Loans and the Loan Files
and any related documents and statements held by it hereunder; and, if the Loans
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
11.09 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.07.
Upon acceptance of appointment by a successor Xxxxxxx as provided in this
Section 11.09, the Servicer shall cause notice of the succession of such Trustee
hereunder to be
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mailed to the Rating Agencies and to each Certificateholder and the Class R
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 11.10. 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 11.07,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall promptly notify the Rating Agencies in the event it is a party to
any merger, conversion or consolidation.
Section 11.11. 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 Trust and the
Trustee shall execute such returns.
Section 11.12. Obligor Claims. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Loans based upon provisions therein complying with, or upon
other rights or remedies arising from, any legal requirements applicable to the
Loans, 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:
(i) 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 home equity lender, in the
arrangement, origination or making of Loans. The Trustee is the
holder of the Loans only as trustee on behalf of the
Certificateholders and the Class R Certificateholder, and not as
a principal or in any individual or personal capacity;
(ii) The Trustee shall not be personally liable for or obligated to
pay Obligors any affirmative claims asserted thereby, or
responsible to Certificateholders or the Class R
Certificateholder for any offset defense amounts applied against
Loan payments, pursuant to such legal actions;
(iii) 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;
(iv) The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors'
legal actions to
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recover affirmative claims against Certificateholders and the
Class R Certificateholder;
(v) The Trustee will cooperate with and assist Certificateholders and
the Class R Certificateholder in their defense of legal actions
by Xxxxxxxx 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
(vi) The Originator hereby agrees to indemnify, hold harmless and
defend the Trustee, Certificateholders and the Class R
Certificateholder from and against any and all liability, loss,
costs and expenses of the Trustee, Certificateholders and the
Class R Certificateholder resulting from any affirmative claims
for recovery asserted or collected by Obligors under the Loans.
Notwithstanding any other provision of this Agreement, the
obligation of the Originator under this Section 11.12(vi) shall
not terminate upon a Service Transfer pursuant to Article VII.
Section 11.13. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction having authority over the
Trust, the Loans or the Obligors, the Originator and the Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 11.13, such powers, duties, obligations, rights and
trusts as the Originator and the Trustee may consider necessary or desirable. If
the Originator shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case an Event of Termination
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.07 hereunder and no notice to Certificateholders or a Class R
Certificateholder of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 11.09.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 11.13 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such co-trustee or separate trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee or separate
trustee at the direction of the Trustee.
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Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then co-trustees and separate trustees, as
effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.14. Trustee and U.S. Bancorp. In the event the Trustee ceases to
be a direct, wholly owned subsidiary of U.S. Bancorp, the Trustee shall promptly
notify the Rating Agencies.
Section 11.15. Trustee Advances.
(a) If the Servicer fails to deposit into the Certificate Account
Advances as required by Section 8.02, then the Trustee shall, subject to
the provisions of paragraph (b) below, from its own funds, deposit into the
Certificate Account the amount not so deposited by the Servicer on or
before the Business Day preceding the related Payment Date (a "Trustee
Advance").
(b) The Trustee shall not be required to make any Trustee Advance if
and to the extent that it determines in good faith that the funds, if
advanced, would not be recoverable by it from subsequent amounts available
in the Certificate Account in accordance with Section 8.04(b).
(c) The Trustee shall be entitled to reimbursement of a Trustee
Advance from funds subsequently available therefor in the Certificate
Account in accordance with Section 8.04(b).
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Article XII
MISCELLANEOUS
Section 12.01. Servicer Not to Resign; Delegation of Servicing Duties. 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. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel for the
Servicer to such effect 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 Section
7.03.
Notwithstanding the foregoing, Conseco Finance Corp., if it is the
Servicer, may delegate some or all of its servicing duties to a wholly-owned
subsidiary of the Originator, 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. Conseco Finance Corp. and Seller Not to Engage in Certain
Transactions with Respect to the Trust. Neither Conseco Finance Corp. nor the
Seller shall:
(i) Provide credit to any Certificateholder for the purpose of
enabling such Certificateholder to purchase Certificates;
(ii) Purchase any Certificates in an agency or trustee capacity; or
(iii) Loan any money to the Trust (other than Advances pursuant to
Section 8.02).
Section 12.03. Maintenance of Office or Agency. The Trustee will maintain
in Minneapolis or St. Xxxx, Minnesota, an office or agency where Certificates or
the Class R Certificate may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Trustee in respect of the
Certificates, the Class R Certificate and this Agreement may be served. On the
date hereof the Trustee's office for such purposes is located at 000 Xxxx 0xx
Xxxxxx, Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000. The Trustee will give prompt
written notice to the Originator, the Seller, the Servicer, the
Certificateholders and the Class R Certificateholder of any change in the
location of the Certificate Register or any such office or agency.
Section 12.04. Termination.
(a) The Trust created hereby and the respective obligations and
responsibilities of the Originator, the Seller, the Servicer, the Guarantor
and the Trustee created hereby (other than the responsibility of the
Trustee to make any final distributions to Certificateholders and the Class
R Certificateholder as set forth below) shall terminate on the earlier of
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(i) the Payment Date on which the principal balance of all of the
Loans is reduced to zero; or
(ii) the Payment Date occurring in the month following the sale of the
Loans pursuant to Section 8.06;
provided, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States
to the Court of St. Xxxxx, living on the date hereof, and provided,
further, that the Servicer's and the Originator's representations and
warranties and indemnities by the Originator and the Servicer shall survive
termination. Any termination of the Trust must be conducted so as to
qualify as a "qualified liquidation" of the Subsidiary REMIC, Intermediate
REMIC and Master REMIC, as applicable, within the meaning of the REMIC
Provisions.
(b) Notice of any termination, specifying the Final Payment Date
(which shall be a date that would otherwise be a Payment Date) upon which
all Certificateholders (other than the Class P Certificateholder) or the
Class R Certificateholder may surrender their Certificates or the Class R
Certificate to the Trustee for payment of the final distribution and
cancellation, shall be given promptly by the Trustee (upon direction by the
Servicer ten days prior to the date such notice is to be mailed) by letter
to each of the Rating Agencies, the Certificateholders and the Class R
Certificateholder mailed no later than the fifth Business Day of the month
of the Final Payment Date specifying
(i) the Final Payment Date upon which final payment on the
Certificates and the Class R Certificate will be made upon
presentation and surrender of Certificates (except in the case of
the Class P Certificate) and the Class R Certificate at the
office or agency of the Trustee therein designated;
(ii) the amount of any such final payment; and
(iii) that the Record Date otherwise applicable to such Payment Date
is not applicable, payments being made only upon presentation and
surrender of the Certificates and the Class R Certificate at the
office or agency of the Trustee therein specified.
Any notice of sale of the Loans pursuant to Section 8.06 shall constitute
the adoption by the Trustee on behalf of the Certificateholders and the
Class R Certificateholder of a plan of complete liquidation 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
Trust by the Trustee. The Trustee shall give such notice to the Certificate
Registrar at the time such notice is given to the Certificateholders and
the Class R Certificateholder. In the event such notice is given in
connection with the sale of the Loans pursuant to Section 8.06, the Class R
Certificateholder or the Trustee, as applicable, shall deposit in the
Certificate Account on the Final Payment Date in immediately available
funds an amount equal to the purchase price specified in Section 8.06 and
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upon such deposit the Certificateholders and the Class R Certificateholder
will be entitled to the amount of such purchase price but not amounts in
excess thereof, all as provided herein. Upon such final deposit, the
Trustee shall promptly release to the purchaser of the Loans pursuant to
Section 8.06 the Loan Files for the remaining Loans, and the Trustee shall
execute all assignments, endorsements and other instruments necessary to
effectuate such transfer.
(c) Upon presentation and surrender of the Certificates (except in the
case of the Class P Certificate) and the Class R Certificate, the Trustee
shall cause to be distributed from the Certificate Account, in the
following order of priority, to the Certificateholders and the Class R
Certificateholder on the Final Payment Date in proportion to their
respective Percentage Interests:
(i) to the extent the Amount Available is sufficient therefor, and in
the order of priority provided for in Section 8.04(b), an amount
equal to
(A) as to Class A Certificates, the Class A Principal Balance
and, together with any Unpaid Class A Interest Carry Forward
Amount and one month's interest at the Pass-Through Rate for
each Class of Class A Certificates on the Class Principal
Balance, respectively,
(B) as to the Class M-1 Certificates, the Class M-1 Principal
Balance, together with any Unpaid Class M-1 Interest Carry
Forward, any Unpaid Class M-1 Realized Loss Interest Amount,
any Unpaid Class M-1 Realized Loss Amount and one month's
interest at the Class M-1 Pass-Through Rate on the Class M-1
Principal Balance,
(C) as to Class M-2 Certificates, the Class M-2 Principal
Balance, together with any Unpaid Class M-2 Interest Carry
Forward Amount, any Unpaid Class M-2 Realized Loss Interest
Amount, any Unpaid Class M-2 Realized Loss Amount and one
month's interest at the Class M-2 Pass-Through Rate on the
Class M-2 Principal Balance,
(D) as to Class B-1 Certificates, the Class B-1 Principal
Balance, together with any Unpaid Class B-1 Interest Carry
Forward Amount any Unpaid Class B-1 Realized Loss Interest
Amount, any Unpaid Class B-1 Realized Loss Amount and one
month's interest at the Class B-1 Pass-Through Rate on the
Class B-1 Principal Balance,
(E) as to Class B-2 Certificates, the Class B-2 Principal
Balance, together with any Unpaid Class B-2 Interest Carry
Forward Amount, any Unpaid Class B-2 Realized Loss Interest
Amount, any Unpaid Class B-2 Realized Loss Amount and one
month's
118
interest at the Class B-2 Pass-Through Rate on the Class B-2
Principal Balance,
(F) to the Basis Risk Reserve Fund the sum of all Unpaid Basis
Risk Carryover Shortfalls for the Class A, Class M and Class
B Certificates,
(G) as to the Class B-3I Certificates, the Class B-3I
Distribution Amount, and
(H) as to the Class P Certificate, the Class P Principal
Balance.
(ii) to the Class P Certificateholder, any Prepayment Charges; and;
(iii) as to the Class R Certificate in respect of the Class R-III
Distribution Amount, the amount which remains on deposit in the
Certificate Account (other than amounts retained to meet claims)
after application pursuant to clauses (i) and (ii) above.
The distribution on the Final Payment Date pursuant to this Section 12.04
shall be in lieu of the distribution otherwise required to be made on such
Payment Date in respect of each Class of Certificates and the Class R
Certificate.
(d) In the event that all of the Certificateholders (other than the
Class P Certificateholder) and the Class R Certificateholder do not
surrender their Certificates and the Class R Certificate 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 and the Class R Certificateholder to surrender their
Certificates and the Class R Certificate for cancellation and receive the
final distribution with respect thereto. If within three months after the
second notice all the Certificates and the Class R Certificate 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 and the Class R Certificateholder who have
not surrendered their Certificates or the Class R Certificate, as the case
may be, for cancellation, together with the final record list of
Certificateholders and the Class R Certificateholder, and the Originator
shall take appropriate steps, or may appoint an agent to take appropriate
steps, to contact each of the remaining Certificateholders concerning
surrender of their Certificates and to contact the Class R
Certificateholder concerning its surrender of the Class R Certificate, and
the cost thereof shall be paid out of the funds and other assets which
remain in trust hereunder.
Section 12.05. Acts of Certificateholders and Class R Certificateholder.
(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
119
to by Holders of Certificates representing, in the aggregate, 51% or more
of the Aggregate Certificate Principal Balance.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders or the Class R Certificateholder may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed
by such Certificateholders or the Class R Certificateholder in person or by
an 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 or
Class R Certificateholder of any such instrument or writing may be proved
in any reasonable manner which the Trustee deems sufficient.
(d) The ownership of Certificates and the Class R Certificate shall be
proved by the Certificate Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder or the Class R Certificateholder
shall bind every holder of every Certificate or the Class R Certificate, as
applicable, 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 Certificates or
Class R Certificate.
(f) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
Section 12.06. Assignment or Delegation by Company. 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 representing, in the aggregate, 66-2/3% or
more of the Aggregate Certificate Principal Balance, and any attempt to do so
without such consent shall be void. Notwithstanding the foregoing, the
Originator may not delegate its obligations under Section 8.03 absent
(i) the prior written consent of Holders of Certificates
representing, in the aggregate, 66-2/3% or more of the Aggregate
Certificate Principal Balance, and the prior written confirmation
of the Rating Agencies that the rating of the Certificates will
not be lowered or withdrawn following such delegation, or
120
(ii) the prior written consent of all of the Certificateholders, 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.
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 or the Class R Certificateholder, 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 the Trust 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 Trust, the Certificateholders or the Class R
Certificateholder, including, without limitation, to implement any
provision permitted by law that would enable a REMIC to avoid the
imposition of any tax, 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
Servicer, 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 representing, in the aggregate, 66-2/3% or more of the
Aggregate Certificate Principal Balance, 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
such Certificateholders; provided, however, that no such amendment shall
(i) reduce in any manner the amount of, or delay the timing of,
collections of payments on the Loans or distributions which are
required to be made on any Certificate,
(ii) reduce the aforesaid percentage required to consent to any such
amendment, without the consent of the holders of all Certificates
then outstanding,
(iii) result in the disqualification of the Master REMIC, Intermediate
REMIC or Subsidiary REMIC under the Code,
(iv) adversely affect the status of the Master REMIC, Intermediate
REMIC or Subsidiary REMIC as a REMIC or the status of the
Certificates as "regular interests" in the REMIC, or
(v) cause any tax (other than any tax imposed on "net income from
foreclosure property" under Section 860G(c)(1) of the Code that
would be imposed without regard to such amendment) to be imposed
on the Trust,
121
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 the Class R
Certificateholder, 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 R Certificateholder.
(c) This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class R Certificateholder
if such amendment would result in the disqualification of the Master REMIC,
Intermediate REMIC or Subsidiary REMIC under the Code.
(d) Concurrently with the solicitation of any consent pursuant to this
Section 12.08, the Trustee shall furnish written notification to S&P and
Moody's. Promptly after the execution of any amendment or consent pursuant
to this Section 12.08, the Trustee shall furnish written notification of
the substance of such amendment to S&P and Moody's, each Certificateholder
and Class R Certificateholder.
(e) It shall not be necessary for the consent of Certificateholders
and the Class R Certificateholder under this Section 12.08 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 and the Class R Certificateholder 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 Opinion of Counsel to the Servicer
to the effect that such amendment is authorized or permitted by this
Agreement.
(h) Upon the execution of any amendment or consent pursuant to this
Section 12.08, 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 or the Class R Certificateholder
hereunder shall be bound thereby.
(i) In the absence of the consent described in subsection (d) 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 Master REMIC,
Intermediate REMIC or Subsidiary REMIC as a REMIC or the status of the
Certificates as "regular interests" therein, 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
122
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.
Section 12.08. Notices. All communications and notices pursuant hereto to
the Seller, the Servicer, the Originator, the Trustee, S&P and Moody's shall be
in writing and delivered or mailed to it at the appropriate following address:
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-1639
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Servicer:
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-1639
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Trustee:
U.S. Bank Trust National Association
Corporate Trust Department
000 Xxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx-Xxxx
Telecopier Number: (000) 000-0000
If to S&P:
Standard & Poor's
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage Surveillance
If to Moody's:
123
Xxxxx'x Investors Service, Inc
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 or
the Class R 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.
124
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized this _____ day
of _______________, 2001.
CONSECO FINANCE CORP.
By:
-------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President and Assistant Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President and Assistant Treasurer
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
--------------------------------------
Xxxxxx Xxxxxxx-Xxxx
Vice President
125
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ______ day of
August, 2001, by Xxxxxxx X. Xxxxxxxx, a Vice President and Assistant Treasurer
of Conseco Finance Corp., a Delaware corporation, on behalf of the corporation.
-------------------------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ______ day of
August, 2001, by Xxxxxxx X. Xxxxxxxx, a Vice President and Assistant Treasurer
of Conseco Finance Securitizations Corp., a Minnesota corporation, on behalf of
the corporation.
-------------------------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ______ day of
August, 2001, by Xxxxxx Xxxxxxx-Xxxx, a Vice President of U.S. Bank Trust
National Association, a national banking association, on behalf of the national
banking association.
-------------------------------------
Notary Public
[SEAL]
126
EXHIBIT A-1
FORM OF CLASS A-[1][2][3][4][5] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
Class A-[1][2][3][4][5] NO.
(Senior) Pass-Through Rate: [A Floating Rate
equal to the lesser of One-Month LIBOR
Cut-off Date: as defined in the plus the Class A-1 Margin or the
Pooling and Servicing Agreement Adjusted Net WAC Cap Rate, but in no
dated August 1, 2001 event greater than 15.00% per annum]
[______%, or the Adjusted Net WAC Cap
First Payment Date: Rate, if less] [or the Adjusted Net
September 17, 2001 WAC Cap Rate, if less; provided,
however, that if the purchase option
Servicer: is not exercised pursuant to Section
Conseco Finance Corp. 8.06 of the Pooling and Servicing
Agreement, for any Payment Date
Final Scheduled Payment Date: thereafter, the Pass-Through Rate on
[______________________] (or this Class A-5 Certificate shall
if such day is not a Business increase to 7.29%, or the Adjusted Net
Day, then the next succeeding WAC Cap Rate, if less]
Business Day)
Denomination: U.S. $__________
Aggregate Denomination of all
Class A-[1][2][3][4][5] Certificates:
$___________________________
CUSIP No. _____________________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2001-C, 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 POOLING AND SERVICING AGREEMENT.
BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE
A-1-1
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS
DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT
THE CERTIFICATEHOLDER EITHER HAS DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT
ITS OWN EXPENSE AN OPINION OF COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE
TRUSTEE) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT
RESULT IN A PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL
NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF
NO SUCH OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE
ORIGINATOR, THE SELLER AND THE SERVICER THAT THE ACQUISITION AND HOLDING OF THE
CERTIFICATE SATISFY THE CONDITIONS FOR EXEMPTIVE RELIEF UNDER THE EXEMPTION,
INCLUDING THE REQUIREMENTS THAT THE CERTIFICATE BE RATED IN ONE OF THE FOUR
HIGHEST GENERIC RATING CATEGORIES BY A RATING AGENCY IDENTIFIED IN THE EXEMPTION
AT THE TIME OF ACQUISITION, AND THAT THE INVESTOR BE AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(A) OF THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933.
This certifies that ____________________________is the registered owner
of the undivided Percentage Interest represented by the original principal
amount set forth above in the Certificates for Home Equity Loans, Series 2001-C,
Class A-[1][2][3][4][5] issued by Conseco Finance Home Equity Loan Trust 2001-C
(the "Trust"), which includes among its assets a pool of closed-end home equity
loans (the "Loans") (including, without limitation, all mortgages, deeds of
trust and security deeds relating to such Loans and any and all rights to
receive payments due on the Loans after the applicable Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of August 1, 2001, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller") and U.S. Bank Trust 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
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in
September, 2001, so long as the Agreement has not been terminated, by check (or,
if such Certificateholder holds Class A-[1][2][3][4][5] Certificates with an
aggregate Percentage Interest of at least 5% of the Class A-[1][2][3][4][5]
Certificates and so desires, by wire transfer pursuant to instructions delivered
to the Trustee at least 10 days prior to such Payment Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Payment Date, in an
A-1-2
amount equal to the Certificateholder's Percentage Interest of the Class
A-[1][2][3][4][5] Distribution Amount for such Payment Date. Distributions of
interest and principal on the Class A-[1][2][3][4][5] Certificates will be made
primarily from amounts available in respect of the Loans. The final scheduled
Payment Date of this Certificate is [_______________________] or the next
succeeding Business Day if such [__________________] is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account [the Yield
Maintenance Reserve Fund] and the Basis Risk Reserve Fund 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
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof 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 the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or 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 in as much as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-1-3
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
A-1-4
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2001-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ____________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2001-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
A-1-5
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2001-C, 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-1-6
EXHIBIT A-2
FORM OF CLASS A-IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
Class A-IO NO.
(Senior)
Pass-Through Rate: from and
Cut-off Date: as defined in the including August 22, 2001 through
Pooling and Servicing Agreement dated the 12th payment date, 11.00% per
August 1, 2001 year; from and including the 13th
payment date, and for any payment
First Payment Date: date thereafter, 10.75% per year.
September 15, 2001
Aggregate Original Notional
Servicer: Principal Amount of all Class A-IO
Conseco Finance Corp. Certificates: the lesser of
(a) from and including the Closing
Final Scheduled Payment Date: Date through the July 2002 Payment
[February 15, 2004] (or if such day is Date, $130,000,000, from and
not a Business Day, then the next including the August 2002 Payment
succeeding Business Day) Date through the January 2003
Payment Date, $110,000,000, from and
including the February 2003 Payment
Date through the July 2003 Payment
Date, $75,000,000, from and
including the August 2003 Payment
Date through the January 2004
Payment Date, $64,000,000, and for
any Payment Date thereafter, $0, and
(b) the Pool Scheduled Principal
Balance.
CUSIP No. _____________________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2001-C, CLASS A-IO (SENIOR)
BY ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE OR
ANY INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT
PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH,
A "PLAN") ACKNOWLEDGES THAT EITHER THE CERTIFICATEHOLDER HAS DELIVERED TO THE
ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
A-2-1
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS NEITHER A
PLAN, NOR ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE
CODE, OR (II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN
WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE POOLING AND SERVICING AGREEMENT.
This certifies that ____________________________is the registered owner
of the undivided Percentage Interest represented by the original principal
amount set forth above in the Certificates for Home Equity Loans, Series 2001-C,
Class A-IO issued by Conseco Finance Home Equity Loan Trust 2001-C (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
August 1, 2001, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller")
and U.S. Bank Trust 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
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in
September, 2001, so long as the Agreement has not been terminated, by check (or,
if such Certificateholder holds Class A-IO Certificates with an aggregate
Percentage Interest of at least 5% of the Class A-IO Certificates and so
desires, by wire transfer pursuant to instructions delivered to the Trustee at
least 10 days prior to such Payment Date) to the registered Certificateholder at
the address appearing on the Certificate Register as of the Business Day
immediately preceding such Payment Date, in an amount equal
A-2-2
to the Certificateholder's Percentage Interest of the Class A-IO Distribution
Amount. Distributions of interest on the Class A-IO Certificates will be made
primarily from amounts available in respect of the Loans. The final scheduled
Payment Date of this Certificate is February 15, 2004 or the next succeeding
Business Day if such February 15, 2004 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST-ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE OR AN INTEREST HEREIN SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF
PRINCIPAL WITH RESPECT TO THE LOANS.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account and the Basis
Risk Reserve Fund 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
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof 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 the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or 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 in as much 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
A-2-3
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.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
A-2-4
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2001-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ____________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2001-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
A-2-5
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2001-C, 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-2-6
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, THE CLASS A-IO CERTIFICATES[,] [AND CLASS M-1 CERTIFICATES] AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] NO.
(Subordinate) Pass-Through Rate: A Floating Rate
equal to the lesser of One-Month
Cut-off Date: as defined in the LIBOR plus the Class M-[1][2] Margin
Pooling and Servicing Agreement dated or the Adjusted Net WAC Cap Rate,
August 1, 2001 but in no event greater than 15.00%
per annum
Denomination: U.S. $__________
First Payment Date:
September 15, 2001 Aggregate Denomination of all
Class M-[1][2] Certificates:
$_________________
Servicer:
Conseco Finance Corp. Final Scheduled Payment Date:
August 15, 2033 (or if such day is
not a Business Day, then the next
succeeding Business Day)
CUSIP No. _____________________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2001-C, CLASS M-[1][2] (SUBORDINATE)
BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT EITHER THE CERTIFICATEHOLDER EITHER
HAS DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN
B-1
OPINION OF COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN A
PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL NOT RESULT
IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH
OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE
SELLER AND THE SERVICER THAT THE ACQUISITION AND HOLDING OF THE CERTIFICATE
SATISFY THE CONDITIONS FOR EXEMPTIVE RELIEF UNDER THE EXEMPTION INCLUDING THE
REQUIREMENTS THAT THE CERTIFICATE BE RATED IN ONE OF THE FOUR HIGHEST GENERIC
RATING CATEGORIES BY A RATING AGENCY IDENTIFIED IN THE EXEMPTION AT THE TIME OF
ACQUISITION, AND THAT THE INVESTOR BE AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(A) OF THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
OF 1933 [AND A QUALIFIED PLAN INVESTOR, AS DEFINED IN THE EXEMPTION].
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 POOLING AND SERVICING AGREEMENT.
This certifies that ____________________________ is the registered
owner of the undivided Percentage Interest represented by the original principal
amount set forth above in the Certificates for Home Equity Loans, Series 2001-C,
Class M-[1][2] issued by Conseco Finance Home Equity Loan Trust 2001-C (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
August 1, 2001, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller")
and U.S. Bank Trust 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
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in
September, 2001, so long as the Agreement has not been terminated, by check (or,
if such Certificateholder holds Class M-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class M-[1][2] Certificates and so
desires, by wire transfer pursuant to instructions delivered to the Trustee at
least 10 days prior to such Payment Date) to the registered Certificateholder at
the address appearing on the Certificate
B-2
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the Interest of the Class M-[1][2] Distribution Amount for such
Payment Date. Distributions of interest and principal on the Class M-[1][2]
Certificates will be made primarily from amounts available in respect of the
Loans. The final scheduled Payment Date of this Certificate is August 15, 2033
or the next succeeding Business Day if such August 15 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, the Yield
Maintenance Reserve Fund and the Basis Risk Reserve Fund to the extent available
for distribution to the Certificateholder as provided in the Agreement, for
payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder
B-3
hereof 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 the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or 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 in as much 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.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
B-4
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2001-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _____________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2001-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-----------------------------------
Authorized Officer
B-5
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2001-C, 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-6
EXHIBIT C
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 A-IO CERTIFICATES, THE CLASS M CERTIFICATES [AND THE
CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THE CERTIFICATE (OR ITS PREDECESSOR) EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
REPRESENTS THAT (1) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE 1933 ACT); (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE NOTE EVIDENCED HEREBY EXCEPT TO (A) CONSECO FINANCE CORP. OR ANY
SUBSIDIARY THEREOF, (B) A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE 1933 ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE 1933 ACT (IF APPLICABLE) OR IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, OR (D)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE CERTIFICATE EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFER IS
PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE, IF NOT HELD BY A UNITED
STATES PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED), MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OFFERED OR OTHERWISE
DISPOSED OF EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (II) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
C-1
Class B-[1][2] NO.
(Subordinate) Pass-Through Rate: A Floating Rate
equal to the lesser of One-Month
Cut-off Date: as defined in the LIBOR plus the Class B-[1][2] Margin
Pooling and Servicing Agreement dated or the Adjusted Net WAC Cap Rate,
August 1, 2001 but in no event greater than 15.00%
First Payment Date: Denomination: U.S. $__________
September 17, 2001
Aggregate Denomination of all
Servicer: Class B-[1][2] Certificates:
Conseco Finance Corp. $______________
Final Scheduled Payment Date:
August 15, 2033 (or if such day is
not a Business Day, then the next
succeeding Business Day)
CUSIP No. _____________________
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 2001-C, CLASS B-[1][2] (SUBORDINATE)
BY ACCEPTANCE OF THIS CERTIFICATE, ANY PERSON THAT ACQUIRES THIS
CERTIFICATE OR ANY INTEREST HEREIN, ON BEHALF OF OR WITH PLAN ASSETS OF ANY
EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF
THE CODE (EACH, A "PLAN") ACKNOWLEDGES THAT THE CERTIFICATEHOLDER EITHER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH
OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE
SELLER AND THE SERVICER THAT THE PURCHASER IS AN INSURANCE COMPANY THAT IS
PURCHASING THE CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY
GENERAL ACCOUNT" AS THAT TERM IS DEFINED IN SECTION V(e) OF PROHIBITED CLASS
EXEMPTION ("PTCE") 95-60, AND THE PURCHASE AND HOLDING OF THE CERTIFICATES
SATISFY THE REQUIREMENTS FOR EXEMPTION UNDER SECTION I AND III OF PTCE 95-60,
C-2
INCLUDING THE REQUIREMENT THAT THE PURCHASER BE A QUALIFIED PLAN INVESTOR, AS
DEFINED IN THE EXEMPTION.
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 POOLING AND SERVICING AGREEMENT.
This certifies that ____________________________is the registered owner
of the undivided Percentage Interest represented by the original principal
amount set forth above in the Certificates for Home Equity Loans, Series 2001-C,
Class B-[1][2], issued by Conseco Finance Home Equity Loan Trust 2001-C (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
August 1, 2001, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller")
and U.S. Bank Trust 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
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in
September, 2001, so long as the Agreement has not been terminated, by check (or,
if such Certificateholder holds Class B-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class B-[1][2] Certificates and so
desires, by wire transfer pursuant to instructions delivered to the Trustee at
least 10 days prior to such Payment Date) to the registered Certificateholder at
the address appearing on the Certificate Register as of the Business Day
immediately preceding such Payment Date, in an amount equal to the
Certificateholder's Percentage Interest of the Class B-[1][2] Distribution
Amount for such Payment Date. Distributions of interest and principal on the
Class B-[1][2] Certificates will be made primarily from amounts available in
respect of the Loans. The final scheduled Payment Date of this Certificate is
August 15, 2033 or the next succeeding Business Day if such August 15 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, the Yield
Maintenance Reserve Fund and the Basis Risk Reserve Fund, to the extent
available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
C-3
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator, the Seller or the
Servicer to any obligation or liability in addition to those undertaken in the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or 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 in as much 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
C-4
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.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
C-5
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2001-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ____________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2001-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
C-6
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2001-C, 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-7
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of August 1, 2001, among the undersigned, Conseco Finance
Corp. and U.S. Bank Trust National Association as Trustee (the "Trustee"), the
undersigned does hereby transfer, convey and assign, set over and otherwise
convey, without recourse, to Conseco Finance Home Equity Loan Trust 2001-C,
created by the Agreement, to be held in trust as provided in the Agreement, (i)
all right, title and interest in the home equity loans identified in the List of
Loans attached to the Agreement (including, without limitation, all related
mortgages, deeds of trust and security deeds and any and all rights to receive
payments on or with respect to the Loans due after the applicable Cut-off Date),
(ii) all rights under any hazard, flood or other individual insurance policy on
the real estate securing a Loan for the benefit of the creditor of such Initial
Loan, (iii) all rights Conseco Finance Securitizations Corp. may have against
the originating lender with respect to Initial and Additional Loans originated
by a lender other than Conseco Finance Securitizations Corp., (iv) all rights of
the Seller under the Transfer Agreement, (v) all rights under the Errors and
Omissions Protection Policy and the Fidelity Bond as such policy and bond relate
to the Initial and Additional Loans, (vi) all rights under any title insurance
policies, if applicable, on any of the properties securing Initial and
Additional Loans, (vii) all documents contained in the Loan Files relating to
the Initial and Additional Loans, (viii) all rights under the Yield Maintenance
Agreements, (ix) amounts in the Certificate Account, the Basis Risk Reserve
Fund, the Yield Maintenance Reserve Fund and the Pre-Funding Account (including
all proceeds of investments of the funds in Certificate Account) and (x) all
proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representations and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others. All undefined capitalized terms used in this Assignment
have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this _____ day of ___________________, 2001.
CONSECO FINANCE SECURITIZATIONS CORP.
By:
---------------------------------
[Name]
[Title]
[SEAL]
D-1
EXHIBIT E
FORM OF CERTIFICATE OF OFFICER
[CONSECO FINANCE CORP.]
[CONSECO FINANCE SECURITIZATIONS CORP.]
I, _______________________, hereby certify that I am a [title] of
[Conseco Finance Corp., a Delaware corporation] [Conseco Finance Securitizations
Corp., a Minnesota corporation] (the "Company"), and that as such I am duly
authorized to execute and deliver this certificate on behalf of [Conseco Finance
Corp.] [Conseco Finance Securitizations Corp.] in connection with the Pooling
and Servicing Agreement dated as of August 1, 2001 (the "Agreement") among
Conseco Finance Corp., Conseco Finance Securitizations Corp. and U.S. Bank Trust
National Association as Trustee (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certifies that:
(i) attached hereto as Exhibit I are true and correct copies
of the [Restated] [Articles] [Certificate] of Incorporation of [Conseco
Finance Corp.] [Conseco Finance Securitizations Corp.], [together with
all amendments thereto] as in effect on the date thereof;
(ii) attached hereto as Exhibit II are true and correct copies
of the Bylaws of [Conseco Finance Corp.] [Conseco Finance
Securitizations Corp.], as amended, as in effect on the date hereof;
(iii) the representations and warranties of [Conseco Finance
Securitizations Corp.] contained in Sections 3.01 and 3.03 of the
Agreement are true and correct on and as of the date hereof and, to the
best of my knowledge, the representations and warranties of [Conseco
Finance Corp.] contained in Sections 3.02, 3.04 and 3.05 of the
Agreement are true and correct on and as of the date hereof;
(iv) no event with respect to [Conseco Finance Corp.] [Conseco
Finance Securitizations Corp.] has occurred and 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
Agreement; and
(v) each of the agreements and conditions of [Conseco Finance
Corp.] [Conseco Finance Securitizations Corp.] to be performed on or
before the date hereof pursuant to the Agreement have been performed in
all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _______________________, 2001.
--------------------------------------
[Name]
[Title]
E-1
EXHIBIT F
FORM OF OPINION OF COUNSEL FOR THE ORIGINATOR
The opinion of Xxxxxx & Xxxxxxx LLP shall be to the effect that
(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 Certificates and the Class R Certificate.
2. The Pooling and Servicing Agreement has been duly authorized by all
requisite corporate action, duly executed and delivered by the Originator, and
constitutes the valid and binding obligation of the Originator enforceable in
accordance with its 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 for the consummation of the transactions contemplated by the Pooling
and Servicing Agreement, 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 Loans to the Trustee acting on behalf of
the Trust, nor the assignment of the Originator's lien on the related real
estate which is the subject of a home equity loan, nor the issuance or sale of
the Certificates and the Class R Certificate, nor the execution and delivery of
the Pooling and Servicing Agreement, nor the consummation of any other of the
transactions contemplated in the Pooling and Servicing Agreement, nor the
fulfillment of the terms of the Certificates, the Class R Certificate or the
Pooling and Servicing Agreement 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 Restated 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.
6. 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 before any court, administrative agency or other tribunal (A)
asserting the invalidity of the Pooling and Servicing Agreement, the
Certificates, the Class R Certificate, the hazard or flood insurance policies
F-1
applicable to any Loans or the Errors and Omissions Protection Policy, (B)
seeking to prevent the issuance of the Certificates or the Class R Certificate
or the consummation of any of the transactions contemplated by the Pooling and
Servicing Agreement, (C) which is likely materially and adversely to affect the
performance by the Originator of its obligations under, or the validity or
enforceability of the Pooling and Servicing Agreement, the Certificates or the
Class R Certificate, or (D) seeking adversely to affect the federal income tax
attributes of the Certificates or the Class R Certificate described in the
Prospectus and the Prospectus Supplement under the heading "Certain Federal
Income Tax Consequences."
7. The transfer of the Loans 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.
8. Pursuant to the Pooling and Servicing Agreement the Originator has
transferred to the Trustee acting on behalf of the Trust all of the Originator's
right, title and interest in the Loans, 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 Loans, and has delivered the Loan 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
Loans as collateral and naming the Originator as debtor and the Trust as secured
party, and the filing of continuation statements as required by Section 4.01 of
the Pooling and Servicing Agreement, is necessary to perfect as against third
parties the assignment of the Loans by the Originator to the Trust. 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 characterized as a pledge securing a loan from
the Certificateholders to the Originator, it is our opinion that the Trustee
would be deemed to have a valid and perfected security interest in the Loans 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 Loan 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 Loan, 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 Loan
Files for the purpose of perfecting the assignment to the Trustee of the Loans.
We express no opinion with respect to the enforceability of any individual Loan
or the existence of any claims, rights or other matters in favor of any Obligor
or the owner of any financed home improvement.
9. 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 the REMIC of a proper election to be taxed as
a REMIC, as of the date hereof the REMIC created
F-2
pursuant to the Pooling and Servicing Agreement will qualify as a REMIC.
Further, the Certificates will evidence ownership of the "regular interests" in
the Master REMIC and the Class R-I, Class R-II and Class R-III Certificates will
evidence ownership of the single Class of "residual interest" in the Subsidiary
REMIC, Intermediate REMIC and Master REMIC, respectively. For Minnesota income
tax purposes, and subject to the foregoing assumptions, and the provisions of
Minnesota law as of the date hereof, the Trust (excluding the Yield Maintenance
Reserve Fund the Basis Risk Reserve Fund 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 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.
10. The transfer of the Loans and the proceeds thereof by the
Originator 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. xx.xx. 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.
F-3
EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGMENT
U.S. Bank Trust National Association, a national banking association
organized under the laws of the United States, acting as trustee (the "Trustee")
of Conseco Finance Home Equity Loan Trust 2001-C (the "Trust") created pursuant
to the Pooling and Servicing Agreement dated as of August 1, 2001 among Conseco
Finance Corp., Conseco Finance Securitizations Corp. (the "Seller") and the
Trustee (the "Agreement") (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement) acknowledges,
pursuant to Section 2.04 of the Agreement, that the Trustee has received the
following: (i) all right, title and interest in the home equity loans identified
in the List of Loans attached to the [Agreement] [Subsequent Transfer Instrument
of even date herewith] (the ["Initial and Additional Loans"] ["Subsequent
Loans"]), including, without limitation, all related mortgages and deeds of
trust and any and all rights to receive payments on or with respect to the
[Initial and Additional/Subsequent] Loans (due after the [Cut-off Date]
[Subsequent Cut-off Date]), (ii) all rights under any hazard, flood or other
individual insurance policy on the real estate securing [an Initial and
Additional] [a Subsequent] Loan for the benefit of the creditor of such [Initial
and Additional/Subsequent] Loan, (iii) all rights the Seller may have against
the originating lender with respect to [Initial and Additional /Subsequent]
Loans originated by a lender other than the Seller, (iv) all rights under the
Errors and Omissions Protection Policy and the Fidelity Bond as such policy and
bond relate to the [Initial and Additional /Subsequent] Loans, (v) all rights
under any title insurance policies, if applicable, on any of the properties
securing [Initial and Additional /Subsequent] Loans and all rights under the
Transfer Agreement dated August 1, 2001 between Conseco Finance Corp. and the
Seller, (vi) all documents contained in the Loan Files relating to the Initial
and Additional /Subsequent Loans, (vii) amounts in the Certificate Account,
Basis Reserve Fund, Yield Maintenance Reserve Fund and the Pre-Funding Account
(including all proceeds of investments of funds in the Certificate Account,
(viii) all rights of Seller under the Transfer Agreement, and (ix) all proceeds
and products of the foregoing; and declares that, directly or through a
Custodian, it will hold all Loan Files that have been delivered in trust, upon
the trusts set forth in the Agreement for the use and benefit of all
Certificateholders and the holders of the Residual Certificate.
[From Trustee or Custodian as applicable.] The Trustee acknowledges
that it has conducted a cursory review of the Loan Files and hereby confirms
that except as noted on the document exception listing attached hereto, each
Loan File contained (a) an original promissory note, (b) with respect to each
Loan, an original or a copy of the mortgage or deed of trust or similar evidence
of a lien on the related improved real estate, (c) in the case of Loans
originated by a lender other than the Seller, an original or a copy of an
assignment of the mortgage, deed of trust or security deed by the lender to the
Seller, and (d) any extension, modification or waiver agreement(s). The Trustee
has not otherwise reviewed the Loans and Loan Files for compliance with the
terms of the Pooling and Servicing Agreement.
G-1
IN WITNESS WHEREOF, ____________________________ as Trustee has caused
this acknowledgment to be executed by its duly authorized officer and its
corporate seal affixed hereto as of this _____, day of ________________, 2001.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By
------------------------------------
[Name]
[Title]
[SEAL]
G-2
EXHIBIT H
FORM OF CERTIFICATE OF SERVICING OFFICER
CONSECO FINANCE CORP.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am 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 August 1, 2001 between the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2001-C (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 this _____ day
of _______________________, 2001.
CONSECO FINANCE CORP.
By:
----------------------------------
[Name]
[Title]
H-1
EXHIBIT I
FORM OF CLASS B-3I CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS A-IO 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.
NO PERSON MAY ACQUIRE THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF
OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT
IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") UNLESS IT
DELIVERS TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
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 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.
I-1
Class C
(Subordinate) NO.
Cut-off Date: as defined in the Percentage Interest:. _________%
Pooling and Servicing Agreement dated
August 1, 2001
First Payment Date: CUSIP No. _____________________
September 15, 2001
Final Scheduled Payment Date:
Servicer: Conseco Finance Corp. August 15, 2033
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 2001-C
Original Aggregate Certificate Principal Balance of the Trust:
$________________
This certifies that Green Tree Finance Corp.--Two is the registered
owner of the Undivided Percentage Interest Interest represented by this
Certificate, and entitled to certain distributions out of Conseco Finance Home
Equity Loan Trust 2001-C (the "Trust"), which includes among its assets a pool
of closed-end home equity loans (the "Loans") (including, without limitation,
all mortgages, deeds of trust and security deeds relating to such Loans and any
and all rights to receive payments due on the Loans after the applicable Cut-off
Date). The Trust has been created pursuant to a Pooling and Servicing Agreement
(the "Agreement"), dated as of August 1, 2001, among Conseco Finance Corp., as
Servicer (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller") and U.S. Bank Trust National Association, as Trustee of the Trust
(the "Trustee"). This Class B-3I Certificate is described in the Agreement and
is issued pursuant and subject to the Agreement. By acceptance of this Class
B-3I 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
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in
September, 2001, so long as the Agreement has not been terminated, by check to
the registered Certificateholder at the address appearing on the Certificate
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the Class B-3I Distribution Amount for such Payment Date. The
final scheduled Payment Date of this Class B-3I Certificate is August 15, 2033
or the next succeeding Business Day if such August 15, 2033 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 Class B-3I 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
I-2
Class B-3I Certificateholder as provided in the Agreement for payment hereunder
and that the Trustee in its individual capacity is not personally liable to the
Class B-3I 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 Class B-3I
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class B-3I 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 B-3I Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class B-3I Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class
B-3I Certificate for registration of transfer at the office or agency maintained
by the Trustee in Minneapolis or St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class B-3I Certificate evidencing the
same Class B-3I Certificate 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 Class B-3I 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.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
I-3
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2001-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _________________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2001-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
---------------------------------
Authorized Officer
I-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2001-C, 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
I-5
EXHIBIT J-1
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
CONSECO FINANCE CORP.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06 and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of August 1, 2001 among the Company,
Conseco Finance Securitizations Corp. and U.S. Bank Trust National Association,
as Trustee of Conseco Finance Home Equity Loan Trust 2001-C (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement), and further certifies that:
1. The Loans 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 Loans, such Loans may,
pursuant to Section 8.05 of the Agreement, be assigned by the Trustee to the
Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _____________________, 2001.
CONSECO FINANCE CORP.
By:
---------------------------------
[Name]
[Title]
J-1-1
EXHIBIT J-2
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
Conseco Finance Corp.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06(b) and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of August 1, 2001 among the Company,
Conseco Finance Securitizations Corp. and U.S. Bank Trust National Association,
as Trustee of Conseco Finance Home Equity Loan Trust 2001-C (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 3.06(b) of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 3.05(b)(iii) of the Agreement, have
been filed with the appropriate offices.
4. The Company has delivered to the Trustee an executed assignment to
the Trustee on behalf of the Trust in recordable form for each mortgage securing
such Eligible Substitute Loans.
5. The requirements of Section 3.06(b) of the Agreement have been met
with respect to each such Eligible Substitute Loan.
[6. 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 Loan exceeds the Scheduled Principal Balance
of each Loan being substituted therefor.]
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of ___________________, 2001.
CONSECO FINANCE CORP.
By:
---------------------------------
[Name]
[Title]
J-2-1
EXHIBIT J-3
FORM OF CERTIFICATE REGARDING SUBSTITUTION FOR PREPAID LOANS
Conseco Finance Corp.
I, ____________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Section 2.06 of the Pooling and Servicing Agreement (the
"Agreement") dated as of August 1, 2001 among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2001-C (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 2.06 of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 2.06(iii) of the Agreement, have
been filed with the appropriate offices.
4. The Company has delivered to the Trustee an executed assignment to
the Trustee on behalf of the Trust in recordable form for each mortgage securing
such Eligible Substitute Loans.
5. The requirements of Section 2.06 of the Agreement have been met with
respect to each such Eligible Substitute Loan.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _______________________, 2001.
CONSECO FINANCE CORP.
By:
---------------------------------
[Name]
[Title]
J-3-1
EXHIBIT K
FORM OF REPRESENTATION LETTER
U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Conseco Finance Securitizations Corp.
0000 Xxxxxxxx Xxxxxx
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: Certificates for Home Equity Loans, Series 2001-C, Class [B-2/C/R]
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
____________________________ 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.
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
K-1
Purchaser has reviewed the Prospectus Supplement dated August 2, 2001, to the
Prospectus dated August 2, 2001 (the "Prospectus") with respect to the
Certificates, and has been given such information concerning the Certificates,
the underlying home equity loans 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 either (check one box):
[_] is not, and is not acting on behalf of or with assets
of, an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as
amended or that is described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or
[_] has provided the Trustee and Servicer with the
opinion of counsel described in Section 9.02(b)(2) of
the Pooling and Servicing Agreement, or
[_] acknowledges that it is deemed to make the
representation set forth in Section 9.02(b)(2) of the
Pooling and Servicing Agreement.
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 R 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
R 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.
K-2
Executed at ____________________________, ___________________________,
this ______ day of _________________, 2001.
Purchaser's Name (Print)
By:
---------------------------------
Signature
Its:
-----------------------------
Address of Purchaser
---------------------------------
---------------------------------
---------------------------------
Purchaser's Taxpayer
Identification Number
---------------------------------
K-3
EXHIBIT L
LIST OF INITIAL AND ADDITIONAL LOANS
[To Be Supplied]
L-1
EXHIBIT M
FORM OF MONTHLY REPORT
CERTIFICATES FOR HOME EQUITY LOANS, SERIES 2001-C
Payment Date: ________________
1. Amount Available _________
2. Servicing Fee _________
3. Trustee Fee _________
4. Unreimbursed Advances _________
5. Yield Maintenance _________
Interest
--------
Class A Certificates
--------------------
6. Current interest
(a) Class A-1 Pass-Through Rate _________
(a floating rate per annum equal to the lesser of one-month LIBOR plus 0.14% per
annum or the Adjusted Net WAC Cap Rate, but in no case more than 15.00% per
annum)
(b) Class A-1 Interest _________
(c) Class A-2 Pass-Through Rate (5.03%, or the Adjusted Net WAC Cap Rate, if less) _________
(d) Class A-2 Interest _________
(e) Class A-3 Pass-Through Rate (5.39%, or the Adjusted Net WAC Cap Rate, if less) _________
(f) Class A-3 Interest _________
(g) Class A-4 Pass-Through Rate (6.19%, or the Adjusted Net WAC Cap Rate, if less) _________
(h) Class A-4 Interest _________
(i) Class A-5 Pass-Through Rate (6.79%*,or the Adjusted Net WAC Cap Rate, if less) _________
(j) Class A-5 Interest _________
(k) Class A-IO Pass-Through Rate _________
(a rate per annum equal to 11.00% for the Payment Dates in
September 2001 to and including August 2002, 10.75% for
Payment Dates in September 2002 to and including February 2004
and 0% for Payment Dates thereafter.)
(l) Class A-IO Interest _________
7. Amount applied to Unpaid Class A Interest Carry Forward Amount _________
8. Remaining Unpaid Class A Interest Carry Forward Amount _________
9. Amount applied to Unpaid Class A-IO Interest Carry Forward Amount _________
------------------------------
* If the purchase option is not exercised pursuant to Section 8.06 of the
Pooling and Servicing Agreement, the Class A-5 Pass-Through Rate shall
increase to 7.29%, or the Adjusted Net WAC Cap Rate, if less.
M-1
10. Remaining Unpaid Class A-IO Interest Carry Forward Amount _________
Class M-1 Certificates
----------------------
11. Amount Available less all preceding distributions _________
12. Class M-1 Principal Balance _________
13. Class M-1 Current Interest _________
(a) Class M-1 Pass-Through Rate (the lesser of one-month LIBOR
plus 0.70% per annum _________ or the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum)
(b) Class M-1 Interest _________
14. Amount applied to Unpaid Class M-1 Interest Carry Forward Amount _________
15. Remaining Unpaid Class M-1 Interest Carry Forward Amount _________
Class M-2 Certificates
----------------------
16. Amount Available less all preceding distributions _________
17. Class M-2 Principal Balance _________
18. Class M-2 Current Interest _________
(a) Class M-2 Pass-Through Rate (the lesser of one-month LIBOR
plus 1.15% per annum _________ or the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum)
(b) Class M-2 Interest _________
19. Amount applied to Unpaid Class M-2 Interest Shortfall _________
20. Remaining Unpaid Class M-2 Interest Carry Forward Amount _________
Class B-1 Certificates
----------------------
21. Amount Available less all preceding distributions _________
22. Class B-1 Principal Balance Current Interest
(a) Class B-1 Pass-Through Rate (the lesser of one-month LIBOR
plus 1.85% per annum _________ or the Adjusted Net WAC Cap
Rate, but in no case more than 15.00% per annum)
(b) Class B-1 Interest _________
23. Amount applied to Unpaid Class B-1 Interest Shortfall _________
24. Remaining Unpaid Class B-1 Interest Shortfall _________
Class B-2 Certificates
----------------------
25. Amount Available less all preceding distributions _________
M-2
26. Class B-2 Principal Balance _________
27. Current Interest
(a) Class B-2 Pass-Through Rate (the lesser of one-month LIBOR plus
4.00% per annum or _________ the Adjusted Net WAC Cap Rate, but
in no case more than 15.00% per annum)
(b) Class B-2 Interest _________
28. Amount applied to Unpaid Class B-2 Interest Shortfall _________
29. Remaining Unpaid Class B-2 Interest Shortfall _________
Principal
---------
30. Trigger Event:
(a) Average Sixty-Day Delinquency Ratio Test
(i) Sixty-Day Delinquency Ratio for current Payment Date _________
(ii) Average Sixty-Day Delinquency Ratio Test (arithmetic _________
average of ratios for this month and two preceding months
may not exceed 38% of the Senior Enhancement Percentage)
(b) Cumulative Realized Losses Test
(i) Cumulative Realized Losses for current Payment Date _________
(ii) Cumulative Realized Losses Ratio _________
(Losses as a percentage of Cut-off Date Principal:
4.75% from September 1, 2004 to August 31, 2005, 5.75%
from September 1, 2005 to August 31, 2006, 6.25% from
September 1, 2006 to August 31, 2007, and 6.50%
thereafter)
31. Senior Enhancement Percentage _________
A. Prior to the Stepdown Date and where no Trigger Event is in Effect:
------------------------------------------------------------------
Class A Certificates
32. Amount Available less all preceding distributions _________
33. Class A principal distribution:
(a) Class A-1 _________
(b) Class A-2 _________
(c) Class A-3 _________
(d) Class A-4 _________
(e) Class A-5 _________
34. (a) Class A-1 Principal Balance _________
(b) Class A-2 Principal Balance _________
(c) Class A-3 Principal Balance _________
M-3
(d) Class A-4 Principal Balance _________
(e) Class A-5 Principal Balance _________
Class M-1 Certificates
----------------------
35. Amount Available less all preceding distributions _________
36. Class M-1 principal distribution _________
37. Class M-1 Principal Balance _________
Class M-2 Certificates
----------------------
38. Amount Available less all preceding distributions _________
39. Class M-2 principal distribution _________
40. Class M-2 Principal Balance _________
Class B-1 Certificates
----------------------
41. Amount Available less all preceding distributions _________
42. Class B-1 principal distribution _________
43. Class B-1 Principal Balance _________
Class B-2 Certificates
----------------------
44. Amount Available less all preceding distributions _________
45. Class B-2 principal distribution _________
46. Class B-2 Principal Balance _________
B. Principal Distributions after the Stepdown Date and so long as a Trigger Event
------------------------------------------------------------------------------
is not then in effect:
---------------------
Class A Certificates
--------------------
47. Amount Available less all preceding distributions _________
48. Class A Formula Principal Distribution Amount:
Class A-1 _________
Class A-2 _________
Class A-3 _________
Class A-4 _________
Class A-5 _________
49. (a) Class A-1 Principal Balance _________
(b) Class A-2 Principal Balance _________
(c) Class A-3 Principal Balance _________
M-4
(d) Class A-4 Principal Balance _________
(e) Class A-5 Principal Balance _________
Class M-1 Certificates
----------------------
50. Amount Available less all preceding distributions _________
51. Class M-1 Formula Principal Distribution Amount _________
52. Class M-1 Principal Balance _________
Class M-2 Certificates
----------------------
53. Amount Available less all preceding distributions _________
54. Class M-2 Formula Principal Distribution Amount _________
55. Class M-2 Principal Balance _________
Class B-1 Certificates
----------------------
56. Amount Available less all preceding distributions _________
57. Class B-1 Formula Principal Distribution Amount _________
58. Class B-1 Principal Balance _________
Excess Cashflows
----------------
59. Overcollateralization Increase Amount _________
60. Unpaid Class A Interest Carry Forward Amount _________
61. Unpaid Class M-1 Interest Carry Forward Amount _________
62. Unpaid Class M-1 Realized Loss Interest Amount and Unpaid _________
Class M-1 Realized Loss Amount
63. Unpaid Class M-2 Interest Carry Forward Amount _________
64. Unpaid Class M-2 Realized Loss Interest Amount and Unpaid _________
Class M-2 Realized Loss Amount
65. Unpaid Class B-1 Interest Carry Forward Amount _________
66. Unpaid Class B-1 Realized Loss Interest Amount and Unpaid _________
Class B-1 Realized Loss Amount
67. Unpaid Class B-2 Interest Carry Forward Amount _________
68. Unpaid Class B-2 Realized Loss Interest Amount and Unpaid _________
Class B-2 Realized Loss Amount
69. Amounts Deposited in Basis Risk Reserve Fund _________
(a) Unpaid Class A Basis Risk Carry-over Shortfall
(b) Unpaid Class M-1 Basis Risk Carry-over Shortfall
(c) Unpaid Class M-2 Basis Risk Carry-over Shortfall
M-5
(d) Unpaid Class B-1 Basis Risk Carry-over Shortfall
(e) Unpaid Class B-2 Basis Risk Carry-over Shortfall
Class A, Class A-IO, Class M and Class B Certificates
-----------------------------------------------------
70. Pool Scheduled Principal Balance _________
71. Pool Factor _________
72. Loans Delinquent: _________
30 - 59 days
60 - 89 days
90 or more days
73. Principal Balance of Defaulted Loans _________
74. Principal Balance of Loans with Extensions _________
75. Number of Liquidated Loans and Net Liquidation Loss _________
76. Number of Loans Remaining _________
77. Pre-Funded Amount _________
78. Reimbursement of Class C Certificateholder expenses _________
Class B-3I Certificate
----------------------
79. Class B-3I Distribution Amount _________
Please contact the Bondholder Relations Department of U.S. Bank Trust
National Association at (000) 000-0000 with any questions regarding this
Statement or your Distribution.
M-6
EXHIBIT N
FORM OF ADDITION NOTICE
_____________, 2001
U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
August 1, 2001, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the
"Seller") and U.S. Bank Trust National Association as Trustee
(the "Trustee") relating to Certificates for Home Equity
Loans, Series 2001-C
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 Loans on the date and in the amounts
set forth below:
Subsequent Transfer Date: _______________
Cut-off Date Principal Balance of Subsequent Loans 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 CORP.
By:
----------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Title:
N-1
EXHIBIT O
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of August 1, 2001, among the undersigned, Conseco Finance
Securitizations Corp. (the "Seller") and U.S. Bank Trust National Association as
Trustee (the "Trustee"), the undersigned does hereby transfer, assign, set over
and otherwise convey, without recourse, to Conseco Finance Home Equity Loan
Trust 2001-C, created by the Agreement, to be held in trust as provided in the
Agreement, (i) all right, title and interest in the home equity loans identified
in the List of Loans attached hereto (each a "Subsequent Loan"), including,
without limitation, all related mortgages, deeds of trust, security deeds and
any and all rights to receive payments on or with respect to the Subsequent
Loans (excluding principal due before the Subsequent Cut-off Date), (ii) all
rights under any hazard, flood or other individual insurance policy on the real
estate securing a Subsequent Loan for the benefit of the creditor of such Loan,
(iii) all rights the Originator may have against the originating lender with
respect to the Subsequent Loans originated by a lender other than the
Originator, (iv) all rights under the Errors and Omissions Protection Policy and
the Fidelity Bond as such policy and bond relate to the Subsequent Loans, (v)
all rights under any title insurance policies, if applicable, on any of the
properties securing Subsequent Loans, (vi) all documents contained in the
related Loan Files, and (vii) all proceeds and products of the foregoing and all
rights of the Seller under the Subsequent Transfer Agreement between the Seller
and the undersigned and all rights of the Seller under the Subsequent Transfer
Agreement with Conseco Finance Corp.
Each of the Subsequent Loans constitutes a Subsequent Loan under the
Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of __________________, 2001.
CONSECO FINANCE CORP.
By:
---------------------------------
Name:
Title:
[SEAL]
O-1
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
I, __________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Originator in connection with the Pooling and Servicing Agreement dated as of
August 1, 2001 (the "Agreement") among the Originator, Conseco Finance
Securitizations Corp. and U.S. Bank Trust 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 Loans (the
"Subsequent Loans") identified in the List of Loans 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, 3.02, 3.03, 3.04 and 3.05 of the Agreement are true
and correct; all representations and warranties in Sections 3.02 and 3.03 of the
Agreement with respect to the Subsequent Loans are true to the best of his
knowledge; and all representations in Section 3.04 of the Agreement with respect
to the Subsequent Loans are true and correct.
3. All conditions precedent to the sale of the Subsequent Loans to the
Trust under Section 2.03 of the Agreement have been satisfied.
4. Each of the Subsequent Loans constitutes a Subsequent Loan under the
Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of _______________________, 2001.
By:
---------------------------------
Name:
Title:
P-1
EXHIBIT Q
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS A-IO 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.
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.
NO PERSON MAY ACQUIRE THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF
OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THAT
IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH, A "PLAN") UNLESS IT
DELIVERS TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
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.
Q-1
Class R NO.
(Subordinate) Percentage Interest:. _________%
Cut-off Date: as defined in the
Pooling and Servicing Agreement
dated August 1, 2001
First Payment Date:
September 17, 2001 CUSIP No. _____________________
Servicer: Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 2001-C
Original Aggregate Certificate Principal Balance of the Trust:
$________________
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 Conseco Finance Home Equity Loan Trust 2001-C (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
August 1, 2001, among Conseco Finance Corp., as Servicer (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller") and U.S. Bank
Trust National Association, as Trustee of the Trust (the "Trustee"). This Class
R Certificate is described in the Agreement and is issued pursuant and subject
to the Agreement. The Class R Certificate will represent collectively the Class
R-III Certificates, the Class R-II Certificates and the R-I Certificates, which
represent "residual interests" in the Master REMIC, the Intermediate REMIC and
the Subsidiary REMIC, respectively. By acceptance of this Class R 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
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in
September 15, 2001, so long as the Agreement has not been terminated, by check
to the registered Class R Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such Payment
Date, in an amount equal to Prepayment Charges. The final scheduled Payment Date
of this Class R Certificate is August 15, 2001 or the next succeeding Business
Day if such August 15, 2001 is not a Business Day.
The Class R 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 R Certificateholder as provided
in the Agreement for payment hereunder and that the
Q-2
Trustee in its individual capacity is not personally liable to the Class R
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 Class R
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class R 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 R Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class R Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class R
Certificate for registration of transfer at the office or agency maintained by
the Trustee in Minneapolis or St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class R Certificate evidencing the
same Class R Certificate 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 Class R 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.
The holder of this Class R 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 Trust (exclusive of the Pre-Funding Account, the Yield Maintenance Reserve
Fund and the Basis Risk Reserve Fund) elects to be treated as one or more "real
estate mortgage investment conduits" (eacj, a "REMIC") under the Code for such
taxable year and all subsequent taxable years. The Certificates shall be
"regular interests" in the REMIC and the Class R Certificate shall represent the
"residual interest" in the REMIC. In addition, the holder of this Class R
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 Trust, and
(ii) agrees to cooperate with the Originator in connection with examinations of
the Trust'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.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
Q-3
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2001-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: _________________________
CONSECO FINANCE HOME EQUITY
LOAN TRUST 2001-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
---------------------------------
Authorized Officer
Q-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 2001-C, 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
Q-5
